Why are advance fares so bad in cross-country?

[quantinghome]

Apologies if this has been asked before.
The question explains itself, but I'd like to know if it's a deliberate policy by XC or the inevitable result of having so many origin-destination pairs.
Travelling today on XC it doesn't seem they have the demand management at all right. They've got paired up trains, plenty of seats with it being school holidays... and advance fares only slightly less than anytime.

 

[maxbarnish]

Split ticketing can be very useful on this route - done it before through Trainsplit and saved a fair amount

 

[NSEFAN]

Advance fares are about maximising revenue. A full train does not always mean more money, if it means selling cheaper tickets to achieve it. An Anytime fare from (for example) Southampton to Manchester would have revenue shared between multiple operators, whereas a slightly cheaper advance fare tied to a CrossCountry train would see all that money go to XC. If the demand is high enough, the advance fares need only be slightly lower than the walk-up fares to generate more money for the train company. There will be some kind of optimum balance between putting bums on seats and charging higher fares which gives the highest return for XC, which in this case appears to result in advance fares which are almost the same price as the walk up tickets.

 

[yorkie]

Apologies if this has been asked before.
The question explains itself, but I'd like to know if it's a deliberate policy by XC or the inevitable result of having so many origin-destination pairs.
Travelling today on XC it doesn't seem they have the demand management at all right. They've got paired up trains, plenty of seats with it being school holidays... and advance fares only slightly less than anytime.

What journey are you making?

In general, XC don't make long distance Advance fares widely available, but there are loads of short distance Advances; any gaps can be filled with walk-up tickets.

A forum member who did some work for XC a few years ago (probably at least 5 years ago now) before working on some franchise bids told me that it was a deliberate policy by XC because they know many people make long distance journeys and want a direct train at any cost, while shorter distance passengers are more savvy and have alternative options. They know that savvy long distance passengers won't pay their through fares but allowing them to split avoids too many of them being lost to other modes, such as air or coach travel.

I also think they do not sell so many Advance fares for HSTs and doubled up Voyagers as they could because they are worried about the risk of a substitution, but that's just a best guess.

Don't forget Coach B is always fully unreserved (if there is a Coach B!)

 

[quantinghome]

What journey are you making?

In general, XC don't make long distance Advance fares widely available, but there are loads of short distance Advances; any gaps can be filled with walk-up tickets.

A forum member who did some work for XC a few years ago (probably at least 5 years ago now) before working on some franchise bids told me that it was a deliberate policy by XC because they know many people make long distance journeys and want a direct train at any cost, while shorter distance passengers are more savvy and have alternative options. They know that savvy long distance passengers won't pay their through fares but allowing them to split avoids too many of them being lost to other modes, such as air or coach travel.

I also think they do not sell so many Advance fares for HSTs and doubled up Voyagers as they could because they are worried about the risk of a substitution, but that's just a best guess.

Don't forget Coach B is always fully unreserved (if there is a Coach B!)

I use XC for short and long distance trips and have split fares on many occasions to make it cheaper, and I've often used Coach B. In this case it was a business trip and I wasn't going to waste company time working out booking for 5 separate return tickets to get from Leeds to Bristol.

My concern is that the walk-up anytime fare for this route is over £250. Having a quick look at advances even in two months' time, there are a limited number of more heavily discounted fares, but only on a small number of trains, none of which arrive before midday. By contrast I can book an reasonably cheap advance from Leeds to London on the same day to arrive at KX by 9.30.

Yes, I know it's different markets and routes but such a restrictive policy is bound to put people off using the XC service, particularly when the driving alternative is viable, unlike travelling to London.

 

[yorkie]

I use XC for short and long distance trips and have split fares on many occasions to make it cheaper, and I've often used Coach B. In this case it was a business trip and I wasn't going to waste company time working out booking for 5 separate return tickets to get from Leeds to Bristol.

It takes exactly the same time to book this journey, regardless of the number of tickets, if you use a website like Trainsplit or Loco2 etc.

However many businesses won't do that, so the company generates lucrative additional revenue from people who are prepared to pay it.

My concern is that the walk-up anytime fare for this route is over £250. Having a quick look at advances even in two months' time, there are a limited number of more heavily discounted fares, but only on a small number of trains, none of which arrive before midday. By contrast I can book an reasonably cheap advance from Leeds to London on the same day to arrive at KX by 9.30.
Yes, I know it's different markets and routes but such a restrictive policy is bound to put people off using the XC service, particularly when the driving alternative is viable, unlike travelling to London.

Most people are not put off; most trains are pretty full. They are maximising revenue, not maximising seat utilisation.

And it works: you are prepared to pay £250. I will pay maybe £80 for the same journey. The company gets both fares. A small number of people will drive instead, which means they can just about get away without lengthening their trains (which is expensive).

You want them to reduce the price for businesses; that isn't going to happen unless Government increases subsidy, which isn't going to happen!

Your post demonstrates how XC are doing the optimal pricing to increase revenues while avoiding too much overcrowding.

 

[Bob M]

At a consultation meetnig about the Cross Country franchise a while ago, I made the point to the DfT people that the current short train / high fare strategy of XC just encourages many journeys to be made via London, where they are having to spend billions to increase capacity.

This didn't seem to have occurred to them before.

 

[quantinghome]

Most people are not put off; most trains are pretty full. They are maximising revenue, not maximising seat utilisation.

And it works: you are prepared to pay £250. I will pay maybe £80 for the same journey. The company gets both fares. A small number of people will drive instead, which means they can just about get away without lengthening their trains (which is expensive).

You want them to reduce the price for businesses; that isn't going to happen unless Government increases subsidy, which isn't going to happen!

Your post demonstrates how XC are doing the optimal pricing to increase revenues while avoiding too much overcrowding.

I accept that XC are looking to maximise revenue based on their existing capacity and I don't mind them charging full wack to businesses. However:
1. The route competes with car travel more significantly than long distance services to/from London, so you would expect more elasticity in the fares compared to London as passengers have other options.
2. This isn't actually the case. Two months out, the advance fares for most trains are not significantly lower than the walk-up fare, whereas London fares show much more elasticity.
3. The route is usually heavily overcrowded.

From this I'd conclude that there is significant suppressed demand on the XC route. Given the quantity of rolling stock coming off lease in the near future there must be a real opportunity to improve capacity at relatively low cost.

Anyway, my original question appears to have been answered - the fares policy is deliberate. Looking at the advance fares around the end of the summer, there is a clear weekend / weekday split, but there doesn't seem to be much adjustment for weekdays during holiday periods. One would imagine a more detailed yield management algorithm would identify this and look to maximise revenue accordingly.

 

[yorkie]

Without knowing the exact route it's difficult to discuss the detail, and I an only really talk in general terms.

My XC train today was very busy, but not overcrowded, with most seats taken, which is fairly typical for the middle of the day (not at peak times). I am sure the train would have been overcrowding if the fares were reasonable, though.

 

[ricoblade]

Another timely thread! I've picked up some work in Bristol (fairly near Parkway) and have been looking at getting the train from Doncaster or more likely Sheffield. I agree with the above that the pricing is eye watering and I've resorted to the car so far. I'll have a look at split ticketing though, good reminder thanks.

 

[yorkie]

Another timely thread! I've picked up some work in Bristol (fairly near Parkway) and have been looking at getting the train from Doncaster or more likely Sheffield. I agree with the above that the pricing is eye watering and I've resorted to the car so far. I'll have a look at split ticketing though, good reminder thanks.

When are you looking to travel?

For example looking at this Monday, XC want over £100 for Sheffield to Bristol Parkway on the 0924. They know some people will pay that, which then goes to subsidising local fares such as Sheffield to Derby, etc to keep them low. They know some people will be put off, which they want, because the trains are 4 car and could not accommodate everyone who wishes to travel. They know savvy people will use a site such as Loco2 or Trainsplit, both of which offer sub £50 fares.

This is a prime example of yield management and market based pricing in action . Without yield management, if all fares were high they would deter too many people. If all fares were low, they would lose money and suffer delays due to overcrowding. The fares right now get the maximum revenue possible.

For all people to be paying £50 they would need to double the length of trains and this would cost money while bringing in no more income. I'd love for this to happen but Government have ruled out providing the level of subsidy this would require.

 

[ricoblade]

When are you looking to travel?

It's fairly random but I usually have a few days', maybe a week's notice. I've not got a next date yet but probably some time week commencing 12th August.

 

[Ianno87]

At a consultation meetnig about the Cross Country franchise a while ago, I made the point to the DfT people that the current short train / high fare strategy of XC just encourages many journeys to be made via London, where they are having to spend billions to increase capacity.

This didn't seem to have occurred to them before.

Though numbers of such passengers will be small potato in the grand scheme of London commuter demand.

Plus ironically, routes via London can have more spare capacity off-peak, thus some decent Advance fare offerings!

 

[The Ham]

Though numbers of such passengers will be small potato in the grand scheme of London commuter demand.

Plus ironically, routes via London can have more spare capacity off-peak, thus some decent Advance fare offerings!

Not necessarily only small numbers, I learnt a long time ago that if I split at London it was often cheaper than paying the anytime through fair, and with advances on the likes of LM (before the current franchise started) it was a LOT cheaper, even with a flexible return part. IIRC sub £60 Vs circa £140 for the journey I was making.

Having said that there's some XC advanced tickets which are the same as the walk up fare but are first class (although they were offering slightly cheaper non first class tickets, over the hour long journey there was only a few pounds in it and I more often than not get free drinks and biscuits which is worth the extra to me), I've found them on the outer edges of the network but they maybe elsewhere.

 

[yorksrob]

I generally always go via London for anything further than the West Midlands now. XC is a company that just isn't serving the market it purports to.

 

[Journeyman]

Split ticketing can be very useful on this route - done it before through Trainsplit and saved a fair amount

Agreed. I used to travel from Edinburgh to Cheltenham fairly regularly, and splitting at Birmingham New Street can cut the price in half.

I generally always go via London for anything further than the West Midlands now. XC is a company that just isn't serving the market it purports to.

Indeed. XC isn't really what you'd call InterCity any more, it seems to consist of extremely long-distance local services that many people use for short distances, which makes the trains very crowded and quite noisy, with a lot of to-ing and fro-ing at every stop, which makes using them a far from relaxing experience.