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Offsetting rail fare increases: balancing traveller behaviour and policy 

offsetting-rail-fare-increases-by-Agiito-Travel-Management-agency

Agiito, alongside their new owners Clarity Business Travel, surveyed their customers about what challenges they expected travel category managers to face in 2024. They found the top answer, by some distance, was ‘balancing traveller behaviour and policy’, followed by ‘economic conditions’.  So, with the upcoming rail fare increase on 3 March 2024, which will see regulated fares increase by up to 4.9%. This means that now is arguably the best time to review your business travel policy and what it says around booking rail. More importantly, it’s a great time to consider what behaviours are driving your travellers’ decisions. Adding these two tasks to the top of your to do list is a great place for offsetting rail fare increases and drive rail savings. 

Discourage booking of Anytime Return tickets

Our expert, Lone Konradsen (Head of Customer Insight), always recommends that your policy should, at a minimum, encourage people not to book Anytime Return tickets and to fix their outbound ticket. I mean, we all know when we need to be somewhere, right?  

The reality is that travellers are still choosing the fully flexible option of the Anytime Return ticket. In fact, over the last year, 18% of sectors travelling on non-commuter journeys (longer journeys) did so on an Anytime Return ticket.  

You may be wondering, ‘what’s the big deal?’ So, this is where Lone looks at the key areas in detail. 

Behaviour and policy

Thanks to a real-life example of what happens when travellers can’t buy Anytime Return tickets, restricting ticket types isn’t pie in the sky thinking. 

In January 2020 London North Eastern Railway (LNER) started their Simpler Fares trial, where they phased out Anytime Return tickets on three of their key routes. This meant that travellers would have to buy single tickets and could therefore make more flexible ticket choices. The trial was extended throughout 2022, and following a successful result, has now been rolled out to all LNER routes from 11 June – but what was the result? 

As much as we would love to see people making better choices and booking more Advance or Off-Peak tickets when they have to buy single tickets, what we’ve actually seen across Clarity Business Travel and Agiito customers is very different. 

What’s needed for offsetting rail fare increases

When Anytime Return tickets were removed, sectors dropped by 9%. But rather than seeing a shift towards the cheaper Advance or Off-Peak tickets, traveller chose the flexible and more expensive Anytime Single, which increased by 9%.  

From a policy perspective, this tells us that simply removing an unfavourable ticket type isn’t going to offer all the answers. Like any good policy, it needs to be accompanied by traveller support and education to steer booker behaviour toward making the right decisions.  

Economic conditions

Now let’s take a look at the financial impact of this increase. A 4.9% increase on 18% of your rail trips may not sound too bad, however, due to the already high cost of an Anytime ticket, the impact could be as much as an overall 2% increase in rail spend. If you put this into the context of ticket choice and what the average sector price is, it’s a no-brainer. Off-Peak tickets can be as much as 44% cheaper than Anytime tickets, and Advance tickets average 38% cheaper.  

In fact, on average, you would potentially only have to shift 9% of your Anytime sectors to either Off-Peak or Advance to offset the increase.  

Tips for offsetting rail fares: changes you can make right away

While a full health check and strategic campaigns can have a big impact, you can start with powerful incremental change to start making a different right away. We’ve outlined some things to consider below: 

Check your travel policy 

Does your policy encourage the right behaviour? If not, now is the time to get it updated. If you need some support and ideas, why not book a Travel Policy Review with our Customer Insight team? 

Talk to your travellers 

What is it that makes your travellers book Anytime tickets right now? Do they understand the differences between ticket types and that they can still achieve flexibility without buying a flexible ticket?

Support traveller wellbeing 

It might seem counterproductive, but point out that by booking an Off-Peak ticket, travellers know they will need to leave the office or the meeting on time. This is a positive as they are more likely to get home in time to be with family and friends.

Point out the obvious 

If travellers know what time they need to be somewhere they can buy an Advance ticket on their outbound journey and take advantage of much cheaper fares.

Get your senior stakeholders on board 

We often find that people buy flexible tickets because senior management make changes at the last minute. What is the culture in your organisation? Could yo.u get senior managers on board to commit to minimal changes?

Timings matter 

Does your meeting in London really need to start at 9am? By starting the meeting at 10.30am most travellers can travel on an Off-Peak tickets. 

That’s just the beginning

We’re always helping organisations to implement progressive and positive changes when it comes to traveller behaviour and policy, particularly when it comes to buying and booking rail.  

A great example of how we work with customers is how we executed a campaign to educate Legal & General bookers to increase booking lead-times. The campaign shifted 7.8% of bookings to +8 days in advance of travel and saved over £7.5k for the customer. Take a look at how we saved rail cost here.  

There’s more where that came from. Why not get in touch with our Customer Insights Team. We’d love to talk over how we can support your objectives. 

 

A recent acquisition of Agiito by Clarity Business Travel put a new management team in place.