Guest Post: What's coming down the tracks for rail in 2023?

Champa Magesh, president of Trainline Partner Solutions, sets out what the challenges and opportunities are during a critical year for rail as it moves up the agenda for business travel

 

As is often the case with challenging times, the gradual recovery of business travel throughout 2022, following the coronavirus pandemic, has also presented opportunities for the rail sector. 

The pandemic has shifted and accelerated the priorities of business travellers on a range of topics, from the personal level such as their expectations when both booking and travelling, to macro issues such as sustainability. 

Combined, this means there are key themes on the horizon for operators, TMCs, OBTs and travel technology platforms to consider as we enter 2023. 

Third parties hold the key to unlocking ticket sales 

In an era where efficiency and cost control are universally paramount, partnerships between operators and third-party ticket retailers benefit everyone – including travellers. 

If B2B distribution was liberalised by all operators and across all markets, collectively we could enjoy the full potential from such partnerships. 

The issue is certainly gaining importance for the industry, so might 2023 be the year when we see major progress on this front and overcome some of the key obstacles? 

Historically we have seen mixed approaches from different carriers – while some have embraced the notion that specialist retailers can reach important (and high-yield) customers more effectively and more efficiently, others have been more reluctant to open up. 

But as attracting new customers – or the return of old customers – is a post-COVID priority we can sense a thawing of the mood in some areas. 

It's also an issue that is attracting the attention of governments and regulators in some markets. 

For example, out-dated licensing conditions that have required TMCs to acquire licences individually from carriers in some markets have been an obstacle to making rail attractive – for retailers and for business travellers. 

Liberalising this distribution model, so that accredited specialists like Trainline can streamline retailing, would represent a major breakthrough in simplifying rail business travel. This is an issue that will gain increasing traction in 2023.

Booking platforms will be consumerising to keep pace with the expectations of business travellers

The pandemic has brought about an age of hyper-personalisation for consumers, which has naturally permeated to their working lives. 

This has raised the expectations of business travellers: they know what good looks like, and they expect to see it in their corporate systems too.

As we head into 2023, more TMCs will be looking to improve their offering ensuring their tech provides seamless access to the widest possible range of routes and fare options.

Taking a more consumer approach will make it easier and more attractive for business travellers to choose rail. 

Seamless booking, multi-modal options and the introduction of features like fare splitting could be transformative for TMCs and OBTs. 

Industry collaborations and open APIs make these features possible, enabling access for customers to the best routes, fares and journey times from carriers across multiple markets.

Liberalisation and competition will be the hot topics everyone is talking about

2023 will be the year when we see growing momentum behind the liberalisation of rail services across Europe. 

Across the continent we have seen competition between incumbents and new entrants boosting business and leading to improved services and prices for travellers. 

Italy is a prime example. It was one of the first countries to liberalise its rail market, more than a decade later operator Italo has grown from serving just nine destinations on the Milan-Naples corridor to serving 60 stations across more than 50 city locations across Italy. 

Italo’s expansion encouraged incumbent Trenitalia to improve its services, and now the Italian rail sector is one of the most competitive in Europe.   

This healthy competition has created greater capacity with increased frequencies, as well as lower fares and the delivery of better services to travellers. 

Earlier this year, at Trainline Partner Solutions we were proud to partner with Italo to expand their ticketing offer and enable them to offer multi-modal options direct to their passengers and growing their customer base and improving access to travellers.

Italy’s success is being replicated in France on the Paris-Lyon route, in Spain on the thriving Madrid-Barcelona corridor, and even in the UK we’re seeing new open access operators emerge with the latest approval of Grand Union services from Wales to London. It’s a theme with real momentum.     

The introduction of mandatory climate disclosures for companies in the UK will move sustainability higher up the agenda of travel-decision makers

If you haven’t yet heard of the Task Force on Climate-Related Financial Disclosure (TCFD), then you should find out more. 

It’s set to have the same impact on everyday business from a sustainability perspective as that of GDPR on data practices. 

As of April 2022, over 1,300 of the UK’s largest companies began measuring and reporting on their emissions, with the indirect “Scope 3” segment, including business travel, recommended as best practice. In 2025, the legislation’s remit will be expanded further to cover more companies.

As we look ahead to 2023, as per government mandate, it will also be expected that large companies and certain financial sector firms publish their transition plans, which strongly recommend the inclusion of scope 3 emissions.

For many big businesses in the UK, supporting the most sustainable mode of travel available will therefore become an urgent policy priority as we enter the new year (if it hasn’t already).

Even for those companies not yet directly impacted, the introduction of these measures by the UK Government should be a huge prompt for businesses operating in the UK to get ahead and start reviewing their policies on business travel, to ensure they are aligned with their sustainability ambitions. 

A recent TPS survey shows they will be supported in making sustainability more front and centre in their business travel plans. 

Of the travel policy decision-makers surveyed who supported providing more rail options, 51% cited sustainability reporting as a key reason. 

There is similar enthusiasm among their colleagues, with 79% of business travellers surveyed expressing support for businesses doing more to promote alternatives to private vehicles and short-haul air travel.

These changes to legislation ultimately present a huge opportunity for TMCs, OBTs and operators, as rail will become a more attractive proposition for travel decision-makers within companies looking to navigate the continued need for accessible, affordable modes of travel with an added sustainability impetus.

Our sector must be on standby to provide businesses with the support they need to make the modal shift to rail.

The modal shift to rail is a one-way ticket

As we move one year closer to 2030, which for many organisations marks the target date for their carbon emission reduction plans, the rail sector must double down on positioning rail as the most viable and sustainable option for business travel. 

From consumerising the travel experience to opening up the gates to greater competition between operators, as we enter 2023 we can make this happen if we all collaborate.