Privatize Amtrak

[stntylr]

This is how Amtrak could turn a profit.

Lets take one route for example, EB route.

I would run 2 trains per day in each direction 12 hours apart. By doing Amtrak could gain short

family day trips. For Example a family in Whitefish to Spokane and back the same day. I could

see a lot of this happening between many combination of cities along that route. I would increase

coach seating by at least 3. I would have 10 sleepers per train and make them slightly more affordable.

Longer train, more snack lounges.

These changes might get Amtrak close to breaking even.

Next Amtrak would need to look outside of trains for revenue. The train station. Of course the traditional waiting

room structure drains money. So make it profitable. A combination small hotel and restaurant train station owned and

operated by Amtrak. Inside the hotel station maybe a local pub, a club with live music, a casino. No, I don't mean MGM casino.

Something small, two dozen machines at most if the state allows it. The point is, even if someone is not riding the train,

that person could still visit the station and spend money. Some small cities could use a visitors information and gift shop offices.

Locate it inside the hotel station. Meeting rooms and convention rooms.

Imagine the EB route with these types of hotel stations along with the family day trips or weekend trips. The EB route would turn a profit. This would work on all LD routes.

But like I said, it would cost 10 billion to set it up.

Casino gambling and slot machines aren't legal in Texas so the SL and TE, two trains that need help would be out of luck.

I'm trying to imagine your hotel and pub working in Sanderson, Texas.

UP has already shot down the idea of a daily SL so a suggestion of a twice daily SL would probably get twice the laughs from them.

 

[transit54]

Let's run through this quickly....

This is how Amtrak could turn a profit.

Lets take one route for example, EB route.

I would run 2 trains per day in each direction 12 hours apart. By doing Amtrak could gain short

family day trips. For Example a family in Whitefish to Spokane and back the same day. I could

see a lot of this happening between many combination of cities along that route. I would increase

coach seating by at least 3. I would have 10 sleepers per train and make them slightly more affordable.

Longer train, more snack lounges.

These changes might get Amtrak close to breaking even.

According to the March 2011 Amtrak performance report, the Empire Builder brought in $26.1m of revenue FYTD on $57m with $2.8m in OPEBs (other post-employment benefits) and other costs. That nets out to a $33.6m loss. Assuming that you ran a second EB each day, your costs are going to double. With the additional sleepers and coaches, the costs will be even more, but for the purposes of this example we'll ignore this. I'd argue that even without these extra cars, the cost would more than double, since the freight railroad involve would probably negotiate the second train at a higher rate than the existing grandfathered service. This assumes that they're interested in running it at all.

What you're arguing is that running this additional train would bring in a total of $67.2m in revenue? The FYTD ridership was 241,546. This works out to $108.05 per passenger. Assuming this stayed the same (which is unlikely if you're trying to encourage short trips by families which will bring in much lower revenue), you're suggesting your service would bring in 621,934 passengers, a 257% increase? From any numbers I've seen from expanded Amtrak frequencies, that is nowhere of even being in the ballpark of realism. I think the best I've ever seen was a 105% increase, or perhaps a bit more than that. Remember, if most of these are short trips, you're going to need substantially more riders, as they won't be paying $108.05 a ticket. If you halve the average price per ticket, you'll need over 1.2m passengers. The Silver Star, Silver Meteor, Carolinian, Palmetto and Crescent combined don't have that kind of ridership and they operate in a market where there is more than one LD train per day.

Unfortunately, these numbers just don't add up.

Next Amtrak would need to look outside of trains for revenue. The train station. Of course the traditional waiting

room structure drains money. So make it profitable. A combination small hotel and restaurant train station owned and

operated by Amtrak. Inside the hotel station maybe a local pub, a club with live music, a casino. No, I don't mean MGM casino.

Something small, two dozen machines at most if the state allows it. The point is, even if someone is not riding the train,

that person could still visit the station and spend money. Some small cities could use a visitors information and gift shop offices.

Locate it inside the hotel station. Meeting rooms and convention rooms.

Imagine the EB route with these types of hotel stations along with the family day trips or weekend trips. The EB route would turn a profit. This would work on all LD routes.

But like I said, it would cost 10 billion to set it up.

There's a number of assumption in this too. First, for realisms sake, I'd take the casino idea off the table. Do you know how hard that would be to get licensed? Look at what horse racing tracks in NY state and many other states went through to try and get slots. Many did not succeed and those that did only got them after years of prolonged legislative fighting. Can you imagine small communities along the tracks allowing slots? Besides, if this was such a sure fire thing, why aren't there slots in every airport I go to?

The next problem is that Amtrak does not own a vast majority of the stations in the system. These would have to be purchased from freight railroads or their existing owners and that's only if they want to sell. The vast majority of structures simply could not accommodate a hotel, a club with live music, and the like. These are very small buildings. A good number can not be substantially modified or torn down because they are historic structures. If we're going to start building new buildings, why not just have Amtrak get into the hotel business - regardless of whether there's any train integration? Then you're subsidizing your rail business with hotels, which makes no sense at all - just get into the hotel business, if that's what you want to do. Amtrak in its current form could never do any of this, of course - they'd have to be owned by a private operator. (Can you imagine the backlash if Amtrak wanted to set up what would be panned as a "government subsidized hotel" in many communities?)

Perhaps there's enough space to rent out to a restaurant or pub in some stations. I say rent because I can't imagine it being efficient for a large, national railway operator to manage hundreds of locally operated restaurant. But even if they could that's certainly not going to close the gap.

Look, I appreciate your enthusiasm in making Amtrak viable, and don't think I get any pleasure in tearing your plans apart. But this truth is, spreading this kind of uninformed opinion undermines Amtrak as we know it. Passenger rail, run the way it is in this country, is not and cannot be profitable. The only way to make an operating profit is heavy government investment in infrastructure, which is politically unrealistic at the present time. The more people who walk around saying some variant of "Amtrak could be profitable" feed into the collective misinformation of voters and politicians and ultimately paint Amtrak as an inefficient entity because it isn't making the profit you said it should be able to.

And if you think I'm wrong, I'd love to hear it. But you need numbers, not just pie in the sky ideas. Pour through the Amtrak annual reports, the monthly reports, their business plans. Run some back of the envelope numbers. Understand the economics of transportation for Amtrak, private railways and transit operators. Analyze the political interests, likely reactions and feasibility. Read books about international examples to see what has been tried and what has failed elsewhere (New Departures by Anthony Pearl is a great one to get started with). And then, see if your plan works.

I work in public transit. Not in rail, but its similar enough that I've learned volumes about how this stuff works, what the economics are, and why public subsidies are required for these sorts of things. I also do a lot of side reading on Amtrak, international passenger railways and other topics. It's something I have both personal and professional interests in. Please don't take this offensively, but when I see this sort of stuff it frustrates me because it takes so much effort to burst the popular perceptions that are already out there about Amtrak. There's enough people who attack Amtrak - there's no need to help them by spreading un-vetted opinions even though your intentions are in the right place.

 

[had8ley]

They could easily go elsewhere - Virginia Railway Express switched to a private operator not too long ago (but at the same time, Metrolink switched from a private operator to Amtrak).

I think this was a no brainer...the former contractor was the responsible party for the engineer texting and killing those people in Chattsworth, CA I think the people of CA would have boycotted the trains if Metrolink stayed with the offending company.

Oh, no doubt they had to ditch Connex. But they could have brought in Veolia or a different private operator or taken over the operation themselves if Amtrak wasn't an appealing choice.

I was referring to Metrolink and Veolia; believe it or not they started out as a French water company. Don't know how they got into RR'ing but don't think they'll be around the US much longer...

 

[Eric S]

They could easily go elsewhere - Virginia Railway Express switched to a private operator not too long ago (but at the same time, Metrolink switched from a private operator to Amtrak).

I think this was a no brainer...the former contractor was the responsible party for the engineer texting and killing those people in Chattsworth, CA I think the people of CA would have boycotted the trains if Metrolink stayed with the offending company.

Oh, no doubt they had to ditch Connex. But they could have brought in Veolia or a different private operator or taken over the operation themselves if Amtrak wasn't an appealing choice.

I was referring to Metrolink and Veolia; believe it or not they started out as a French water company. Don't know how they got into RR'ing but don't think they'll be around the US much longer...

I imagine transit54 meant Keolis (new operator of VRE), rather than Veolia/Connex (former operator of Metrolink).

 

[transit54]

I imagine transit54 meant Keolis (new operator of VRE), rather than Veolia/Connex (former operator of Metrolink).

Thanks Eric. That's exactly what I meant. I got my companies confused.

 

[Eric S]

I imagine transit54 meant Keolis (new operator of VRE), rather than Veolia/Connex (former operator of Metrolink).

Thanks Eric. That's exactly what I meant. I got my companies confused.

I have a hard time keeping them straight myself.

 

[GP35]

Let's run through this quickly....

This is how Amtrak could turn a profit.

Lets take one route for example, EB route.

I would run 2 trains per day in each direction 12 hours apart. By doing Amtrak could gain short

family day trips. For Example a family in Whitefish to Spokane and back the same day. I could

see a lot of this happening between many combination of cities along that route. I would increase

coach seating by at least 3. I would have 10 sleepers per train and make them slightly more affordable.

Longer train, more snack lounges.

These changes might get Amtrak close to breaking even.

According to the March 2011 Amtrak performance report, the Empire Builder brought in $26.1m of revenue FYTD on $57m with $2.8m in OPEBs (other post-employment benefits) and other costs. That nets out to a $33.6m loss. Assuming that you ran a second EB each day, your costs are going to double. With the additional sleepers and coaches, the costs will be even more, but for the purposes of this example we'll ignore this. I'd argue that even without these extra cars, the cost would more than double, since the freight railroad involve would probably negotiate the second train at a higher rate than the existing grandfathered service. This assumes that they're interested in running it at all.

What you're arguing is that running this additional train would bring in a total of $67.2m in revenue? The FYTD ridership was 241,546. This works out to $108.05 per passenger. Assuming this stayed the same (which is unlikely if you're trying to encourage short trips by families which will bring in much lower revenue), you're suggesting your service would bring in 621,934 passengers, a 257% increase? From any numbers I've seen from expanded Amtrak frequencies, that is nowhere of even being in the ballpark of realism. I think the best I've ever seen was a 105% increase, or perhaps a bit more than that. Remember, if most of these are short trips, you're going to need substantially more riders, as they won't be paying $108.05 a ticket. If you halve the average price per ticket, you'll need over 1.2m passengers. The Silver Star, Silver Meteor, Carolinian, Palmetto and Crescent combined don't have that kind of ridership and they operate in a market where there is more than one LD train per day.

Unfortunately, these numbers just don't add up.

Next Amtrak would need to look outside of trains for revenue. The train station. Of course the traditional waiting

room structure drains money. So make it profitable. A combination small hotel and restaurant train station owned and

operated by Amtrak. Inside the hotel station maybe a local pub, a club with live music, a casino. No, I don't mean MGM casino.

Something small, two dozen machines at most if the state allows it. The point is, even if someone is not riding the train,

that person could still visit the station and spend money. Some small cities could use a visitors information and gift shop offices.

Locate it inside the hotel station. Meeting rooms and convention rooms.

Imagine the EB route with these types of hotel stations along with the family day trips or weekend trips. The EB route would turn a profit. This would work on all LD routes.

But like I said, it would cost 10 billion to set it up.

There's a number of assumption in this too. First, for realisms sake, I'd take the casino idea off the table. Do you know how hard that would be to get licensed? Look at what horse racing tracks in NY state and many other states went through to try and get slots. Many did not succeed and those that did only got them after years of prolonged legislative fighting. Can you imagine small communities along the tracks allowing slots? Besides, if this was such a sure fire thing, why aren't there slots in every airport I go to?

The next problem is that Amtrak does not own a vast majority of the stations in the system. These would have to be purchased from freight railroads or their existing owners and that's only if they want to sell. The vast majority of structures simply could not accommodate a hotel, a club with live music, and the like. These are very small buildings. A good number can not be substantially modified or torn down because they are historic structures. If we're going to start building new buildings, why not just have Amtrak get into the hotel business - regardless of whether there's any train integration? Then you're subsidizing your rail business with hotels, which makes no sense at all - just get into the hotel business, if that's what you want to do. Amtrak in its current form could never do any of this, of course - they'd have to be owned by a private operator. (Can you imagine the backlash if Amtrak wanted to set up what would be panned as a "government subsidized hotel" in many communities?)

Perhaps there's enough space to rent out to a restaurant or pub in some stations. I say rent because I can't imagine it being efficient for a large, national railway operator to manage hundreds of locally operated restaurant. But even if they could that's certainly not going to close the gap.

Look, I appreciate your enthusiasm in making Amtrak viable, and don't think I get any pleasure in tearing your plans apart. But this truth is, spreading this kind of uninformed opinion undermines Amtrak as we know it. Passenger rail, run the way it is in this country, is not and cannot be profitable. The only way to make an operating profit is heavy government investment in infrastructure, which is politically unrealistic at the present time. The more people who walk around saying some variant of "Amtrak could be profitable" feed into the collective misinformation of voters and politicians and ultimately paint Amtrak as an inefficient entity because it isn't making the profit you said it should be able to.

And if you think I'm wrong, I'd love to hear it. But you need numbers, not just pie in the sky ideas. Pour through the Amtrak annual reports, the monthly reports, their business plans. Run some back of the envelope numbers. Understand the economics of transportation for Amtrak, private railways and transit operators. Analyze the political interests, likely reactions and feasibility. Read books about international examples to see what has been tried and what has failed elsewhere (New Departures by Anthony Pearl is a great one to get started with). And then, see if your plan works.

I work in public transit. Not in rail, but its similar enough that I've learned volumes about how this stuff works, what the economics are, and why public subsidies are required for these sorts of things. I also do a lot of side reading on Amtrak, international passenger railways and other topics. It's something I have both personal and professional interests in. Please don't take this offensively, but when I see this sort of stuff it frustrates me because it takes so much effort to burst the popular perceptions that are already out there about Amtrak. There's enough people who attack Amtrak - there's no need to help them by spreading un-vetted opinions even though your intentions are in the right place.

I am not going to try to convince someone hard wired in thinking Government runs businesses better. Thinking outside the box is heresy. You took everything I posted, twisted, then attacked the twisted Idea. The only part you seem to understand is the part about Amtrak using hotels to help pay for the cost to operate the trains.Yes, exactly right. I don't mean building a 5,000 bed hotel in Sanderson TX. This something you twisted to pollute my idea. I didn't say casinos in Texas. I didn't say build a club inside existing stations. I said profitable stations. Amtrak must use other means to help pay for the cost of operating the trains.

 

[jis]

The first thought that comes to mind is, "Fools rush in where angels fear to tread."

Great post, George! My feelings exactly. We both remember what the last few years of privately operated passenger trains was like. While a few railroads, continued to do a good job, many did everything they could to chase passengers away.

+1. I agree. Last few? More like last 20 or so.

RRdude wanted an idea, looking at the schedules, The Adirondack and Mapleleaf leave NYC an

hour apart, one heading to Montreal and the other to Toronto. I realize Boston is a little further, but why not run one from Boston, meeting in Albany. You open up many new city pairs

from Boston and western Mass. to Montreal, western NY and Toronto and back to Boston.

That won't happen until CSX agrees to allow running another train on the Pittsfield Line. Dreaming is always fun. But once one wakes up the unfortunate facts of reality strike to dash all dreams.

 

[Trogdor]

I am not going to try to convince someone hard wired in thinking Government runs businesses better. Thinking outside the box is heresy. You took everything I posted, twisted, then attacked the twisted Idea. The only part you seem to understand is the part about Amtrak using hotels to help pay for the cost to operate the trains.Yes, exactly right. I don't mean building a 5,000 bed hotel in Sanderson TX. This something you twisted to pollute my idea. I didn't say casinos in Texas. I didn't say build a club inside existing stations. I said profitable stations. Amtrak must use other means to help pay for the cost of operating the trains.

Nowhere did he say that government runs business better. He merely addressed the reality of the situation, which is that, without major capital investment, you're not going to make money running passenger trains (and he pointed out that the service increases you propose would increase costs greater than revenues, which is very likely true, and that puts you further away from your goal). One thing he didn't even mention is that running a second Empire Builder (for example), on a 12-hour different schedule, puts it out of Chicago at 2:15 am, Milwaukee at 4 am, and the eastbound would leave Seattle/Portland before 5 am. Good luck getting any ridership out of your major markets with times like that.

As for the other half of your proposal, it has already been pointed out that Amtrak owns very little real estate. What you're basically proposing is that Amtrak become a real estate company. The problems with that are: 1) Amtrak has no money to buy new real estate. If they did have a bunch of cash available (which, realistically, would only come from a government source, since there are no private investors with money actually lined up to put money into a national passenger railroad), then that money would likely be earmarked for specific rail-related purchases, and not "go buy yourself some land and a business and see if you can make money on it." No private investor interested in a financial return would give Amtrak money to go buy into other, profitable businesses. They'd much rather put that money directly into a profitable business and bypass the money-losing railroad part. 2) The real-estate business hasn't exactly done anybody a lot of good lately. If there's a market for building new hotels, odds are the hotel chains have already identified such and are developing it themselves.

Maybe Amtrak should get into the grocery business, and start a bunch of 7-11 shops and use the profits from that to subsidize the railroad. Or maybe Amtrak should set up a hair salon, and use the profits from that to subsidize the rail service. Or maybe they should pay to develop the next PC Operating System and use that money, etc. The problem with all these ideas is that the people at Amtrak are railroaders, not hotel operators, grocers, or hair stylists, etc. In order to get the experience to run a hotel (or any other profitable business), they'd have to start spending a ton of money hiring people that are experts in those fields. That would go over like a lead balloon in Congress, not to mention the business community Amtrak would be competing against (hell, just look what happened when Amtrak tried carrying freight on passenger trains...that wasn't even leaving the field of railroading, and that turned out to be a disaster).

Amtrak isn't going to get into the hotel industry for the same reason you don't see American Airlines getting into the hotel industry (or tax preparation, or auto repair, or the pharmaceutical industry, etc.): It's not the field they're in, it's not their area of expertise, and that market is already very well covered by companies that have expertise in that area. Amtrak is actually further hamstrung by the fact that it's a government-owned corporation, and thus has to justify every roll of toilet paper it buys, let alone hiring a team of executives and a bunch of lower-level employees whose job it is to outdo Apple on the next technological gizmo, the profits from which will subsidize the (still money-losing) passenger trains.

Ultimately, even if we were to pretend that all of that could work (i.e. Amtrak getting into business in another industry that has profits that subsidize the train losses), the inevitable result would be the government asking "Why do we own this corporation if it makes money?" Then investors will be lined up to buy the profitable company from the government, and Amtrak will be sold off. The first thing those investors are going to say: "This company would be even more profitable if we didn't run these damn passenger trains." Then you're back to square one.

So, in the end, you're down to one of two choices: 1) a very benevolent railfan billionaire who doesn't mind seeing his entire fortune disappear in order to provide passenger service, and doesn't care about a return on investment, or 2) government subsidies (either direct operating support, or massive infrastructure upgrades). If you know of #1, please tell us, otherwise, I haven't yet seen any evidence that we can avoid #2.

 

[TransitGeek]

I am not going to try to convince someone hard wired in thinking Government runs businesses better. Thinking outside the box is heresy. You took everything I posted, twisted, then attacked the twisted Idea. The only part you seem to understand is the part about Amtrak using hotels to help pay for the cost to operate the trains.Yes, exactly right. I don't mean building a 5,000 bed hotel in Sanderson TX. This something you twisted to pollute my idea. I didn't say casinos in Texas. I didn't say build a club inside existing stations. I said profitable stations. Amtrak must use other means to help pay for the cost of operating the trains.

The only box that transit54 was "hardwired" into was the one called evidence. He was simply asking you to back up your assertions, not expressing an ideology. Such a request is the backbone of rational discourse, and should not be cause for offense. Either you have evidence, in which case you should first tell us and then tell the Amtrak board, or you don't, in which case you may want to re-think your proposal.

 

[transit54]

I am not going to try to convince someone hard wired in thinking Government runs businesses better. Thinking outside the box is heresy. You took everything I posted, twisted, then attacked the twisted Idea. The only part you seem to understand is the part about Amtrak using hotels to help pay for the cost to operate the trains.Yes, exactly right. I don't mean building a 5,000 bed hotel in Sanderson TX. This something you twisted to pollute my idea. I didn't say casinos in Texas. I didn't say build a club inside existing stations. I said profitable stations. Amtrak must use other means to help pay for the cost of operating the trains.

The only box that transit54 was "hardwired" into was the one called evidence. He was simply asking you to back up your assertions, not expressing an ideology. Such a request is the backbone of rational discourse, and should not be cause for offense. Either you have evidence, in which case you should first tell us and then tell the Amtrak board, or you don't, in which case you may want to re-think your proposal.

Thanks for the clarification. I guess I can summarize my post in two ways: 1) The numbers don't seem to add up on the LD proposal you raised. 2) For any of the additional ideas you suggested, I'd argue that Amtrak would have to become a private entity. GP35 didn't argue that the private sector can run Amtrak better - but can anyone imagine a "government entity" being allowed to operate hotels, bars, etc? The right would pan it as a "socialist takeover" and, to be honest, that argument actually has some traction.

I'm sorry if you feel I misinterpreted your post - but I just don't see how you could argue that #2 would be allowed to happen unless Amtrak was private (which is why I assumed you were suggesting it would be). As for #1, I'll reiterate what I said in my above post and what TransitGeek mentioned - I'd love to see some back of the envelope numbers on how this would work. From my experience and from what I'm looking at, the numbers just don't seem to come anywhere close to what you suggest. And I'm accounting for the fact that you'd need substantial capital - that's why I didn't include the costs to purchase the new equipment you discussed, etc.

 

[GP35]

I was giving him a taste of twisting up words.

No, Amtrak is not going in the hotel, restaurant, casino, and club business BUT it should. Cruise ships make extra money with

a casino on board as well as shops and clubs. Here is another example for those stuck in the box. I'll try to be more detailed.

Lake Charles LA station is a tiny waiting room in a dark high drug area. I know, my cousin lives nearby.

The only good part is that the train doesn't arrive after dark.

Under my plan, the station would move 1 mile west down the tracks and be located on the I-10 feeder road.

Part of the station would be a small 50 bed hotel maybe called Amtrak Inn. Inside the station/hotel would be a restaurant and club/pub.

Maybe a gift shop, Greyhound bus stop, and casino. No I do not mean a grand casino with BJ tables and cocktail waitress.

Many small restaurants/clubs in and around Lake Charles have these mini casinos inside.

This station would make money for Amtrak even if no one buys a ticket. This station would invite riders.

Anyone says the current Lake Charles station is a better option is insane.

No, this station would never happen. Pity..,.

 

[Devil's Advocate]

Just out of curiosity do any of the current casino's offer pickup/dropoff service from/to the Lake Charles train station?

 

[GP35]

Just out of curiosity do any of the current casino's offer pickup/dropoff service from/to the Lake Charles train station?

I don't know, but I doubt it. But if they did or if Amtrak did, maybe Amtrak could compete with the million of casino buses on I-10.

 

[stntylr]

You really don't understand that if an Amtrak hotel chain made money then the investors would want to sell off the money losing train part. As you said the casino would make money even if no one bought a ticket so why not dump the money drain that the Sunset Limited is?

Again as I mentioned casino gambling is illegal in Texas so how would you make money from the Beaumont, TX station?

Just one thought in the Amtrak Casino you could place bets on what time the train would arrive. What would the over/under on the SL be?

P.S. I'm not polluting your ides if I point out problems with them.

 

[Trogdor]

I was giving him a taste of twisting up words.

Not sure what that was supposed to accomplish.

No, Amtrak is not going in the hotel, restaurant, casino, and club business BUT it should. Cruise ships make extra money with a casino on board as well as shops and clubs. Here is another example for those stuck in the box. I'll try to be more detailed.

Lake Charles LA station is a tiny waiting room in a dark high drug area. I know, my cousin lives nearby.

The only good part is that the train doesn't arrive after dark.

Under my plan, the station would move 1 mile west down the tracks and be located on the I-10 feeder road.

Part of the station would be a small 50 bed hotel maybe called Amtrak Inn. Inside the station/hotel would be a restaurant and club/pub.

Maybe a gift shop, Greyhound bus stop, and casino. No I do not mean a grand casino with BJ tables and cocktail waitress.

Many small restaurants/clubs in and around Lake Charles have these mini casinos inside.

This station would make money for Amtrak even if no one buys a ticket. This station would invite riders.

Anyone says the current Lake Charles station is a better option is insane.

No, this station would never happen. Pity..,.

Okay, so, presuming that this land is available where you say it is:

1) How much is it going to cost Amtrak to purchase the land?

2) How much is it going to cost Amtrak to construct this hotel?

3) Since Amtrak (presumably) doesn't have any staff who are experts in the hotel/casino business, how much would it cost to hire the number of people required to plan and design this new facility?

4) How much would Union Pacific (or is it BNSF at that point? I forget, but nonetheless) charge to essentially take up part of their right of way with this new development?

5) Does Greyhound actually have a need for a stop right there, or are you presuming to speak for them in this matter?

Once you have identified all of the costs above (which are guaranteed to be in the eight figure range, minimum), where do you propose Amtrak find the money to pay for this?

Amtrak serves about 500 stops across the country. Assuming an extremely lowball price tag of about $10 million (I'm sure it's much more) to buy the land and build one of these, if Amtrak were to do something like this at every stop in the country, it would cost $5 billion (and remember, that's a lowball figure; in larger cities, things tend to cost a lot more). Even assuming they don't do even half of the stations, you're still talking a price tag that will likely exceed a billion dollars in land acquisition and construction costs (to say nothing of all the staff or consultants you'd need to hire to get into this entirely new line of business that probably nobody at Amtrak has experience in right now).

As I said above, there's a reason Denny's doesn't run hotels. There's a reason American Airlines doesn't own gas stations. There's a reason H&R Block didn't get into the web hosting business. Yes, there are profits to be had in each of those fields. But you need expertise in those fields to succeed. Amtrak doesn't have expertise in these new and completely different industries you're talking about. Getting that expertise would cost tons of money. Buying the land needed to develop these ideas would cost tons more. Who is going to pay?

 

[Ispolkom]

I was referring to Metrolink and Veolia; believe it or not they started out as a French water company. Don't know how they got into RR'ing but don't think they'll be around the US much longer...

Strangely enough, Veolia picks up my garbage here in Minnesota. They seem to do an okay job at that, but I was very surprised that they also ran Metrolink.

 

[stntylr]

You could look at it this way. According to the 2010 annual report Amtrak lost 1.3 billion dollars.

Let's be very, very optimistic and say your casino operation was able to generate 1.3 billion dollars a year profit.

Well then you've done good 1.3 billion dollar loss from rail operations with 1.3 billion dollar gain from casino operation for a net profit of zero.

But wait, this is a private company and the shareholders demand a large return on investment. Zero isn't going to make them happy.

What can you do?

Close down rail operations and keep the Amtrak casino.

No trains but Amtrak makes lots of money.

 

[had8ley]

I was referring to Metrolink and Veolia; believe it or not they started out as a French water company. Don't know how they got into RR'ing but don't think they'll be around the US much longer...

Strangely enough, Veolia picks up my garbage here in Minnesota. They seem to do an okay job at that, but I was very surprised that they also ran Metrolink.

I think one of their last major contracts is running the street cars in New Orleans !!! :help:

 

[Eric S]

I was referring to Metrolink and Veolia; believe it or not they started out as a French water company. Don't know how they got into RR'ing but don't think they'll be around the US much longer...

Strangely enough, Veolia picks up my garbage here in Minnesota. They seem to do an okay job at that, but I was very surprised that they also ran Metrolink.

I think one of their last major contracts is running the street cars in New Orleans !!! :help:

I believe Veolia also operates (or did until recently) rail transit a number of locations: Austin (Capital MetroRail), Boston (MBTA commuter rail in a consortium with Bombardier and others), Miami-Fort Lauderdale-West Palm Beach (Tri-Rail), and San Diego (SPRINTER).

 

[Anderson]

The hotel business suggestion reminds me of British Rail in its early days: Because the government nationalized the railroad network wholesale, they also got the miscellaneous assets of the "Big Four", including a small film company (used for promotional films for the RRs) and a modest network of resorts. Basically...imagine if, when Amtrak had been formed, Chessie had managed to dump the Greenbrier in with its passenger operations. That's sort of what BR got to start with, and they spent the next thirty years trying (on and off) to manage those assets. By the way, those assets didn't save British Rail from turning into a big money loser by the 60s, either, and that was with freight operations to prop up the passenger side of things.

To be fair, there are probably a few places that an integrated hotel operation would make some sense: LAX, CHI, NYP, and WAS all leap to mind as candidates if you could find the space, and PHL, PDX, and SEA might work as well (and I could make a case for ORL, ATL, and NOL). But those would be incidental operations compared to a much, much larger whole, and they'd probably end up being a subcontracted brand (i.e. Amtrak contracts with Sheraton, Hilton, or Hyatt to run the hotels under a joint branding deal). Considering the sheer amount of railroad traffic in a lot of those cities, I think such a hotel would be a success, and (for example) "doing a deal" as part of the Farley project might make sense if you could integrate it properly.

Edit: Thinking about it, CHI and LAX are probably the best-suited. There are a lot of close-by hotels to NYP (including a Holiday Inn right across the street), and there are a couple in WAS (which has the additional problem of being too close to the Capitol and in insane real estate territory...if Amtrak was looking to do something "over" the railyard, this could work, but I do not even want to contemplate the engineering nightmare that would be). 30th Street Station (PHL) could plausibly be partly redeveloped as well (it's slightly isolated from downtown and on a fairly large piece of land; you could do something above parts of the parking lot on the sides of the building). There it could easily become a mess, but it is at least plausible.

 

[had8ley]

I was referring to Metrolink and Veolia; believe it or not they started out as a French water company. Don't know how they got into RR'ing but don't think they'll be around the US much longer...

Strangely enough, Veolia picks up my garbage here in Minnesota. They seem to do an okay job at that, but I was very surprised that they also ran Metrolink.

I think one of their last major contracts is running the street cars in New Orleans !!! :help:

I believe Veolia also operates (or did until recently) rail transit a number of locations: Austin (Capital MetroRail), Boston (MBTA commuter rail in a consortium with Bombardier and others), Miami-Fort Lauderdale-West Palm Beach (Tri-Rail), and San Diego (SPRINTER).

My son is Director of Commuter Operations in Austin for HERZOG Services...Veolia got a one way ticket out of Austin in December, 2009. IIRC, they don't have much left and Chattsworth ain't going to get them any new contracts for a loooong time. BTW, just where is all the mis-information that seems to be spreading like a computer virus coming from ????

 

[GP35]

You really don't understand that if an Amtrak hotel chain made money then the investors would want to sell off the money losing train part. As you said the casino would make money even if no one bought a ticket so why not dump the money drain that the Sunset Limited is?

Again as I mentioned casino gambling is illegal in Texas so how would you make money from the Beaumont, TX station?

Just one thought in the Amtrak Casino you could place bets on what time the train would arrive. What would the over/under on the SL be?

P.S. I'm not polluting your ides if I point out problems with them.

I am not saying no one can disagree with me, just disagree with what I posted.

Right, no gambling in Texas. Each station will be suited with what works in that city. The same model without the casino could work in Beaumont.

The purpose is to make money for the train.

 

[GP35]

I was giving him a taste of twisting up words.

Not sure what that was supposed to accomplish.

No, Amtrak is not going in the hotel, restaurant, casino, and club business BUT it should. Cruise ships make extra money with a casino on board as well as shops and clubs. Here is another example for those stuck in the box. I'll try to be more detailed.

Lake Charles LA station is a tiny waiting room in a dark high drug area. I know, my cousin lives nearby.

The only good part is that the train doesn't arrive after dark.

Under my plan, the station would move 1 mile west down the tracks and be located on the I-10 feeder road.

Part of the station would be a small 50 bed hotel maybe called Amtrak Inn. Inside the station/hotel would be a restaurant and club/pub.

Maybe a gift shop, Greyhound bus stop, and casino. No I do not mean a grand casino with BJ tables and cocktail waitress.

Many small restaurants/clubs in and around Lake Charles have these mini casinos inside.

This station would make money for Amtrak even if no one buys a ticket. This station would invite riders.

Anyone says the current Lake Charles station is a better option is insane.

No, this station would never happen. Pity..,.

Okay, so, presuming that this land is available where you say it is:

1) How much is it going to cost Amtrak to purchase the land?

I don't know. Hopefully a fair price.

2) How much is it going to cost Amtrak to construct this hotel?

Maybe 7 million

3) Since Amtrak (presumably) doesn't have any staff who are experts in the hotel/casino business, how much would it cost to hire the number of people required to plan and design this new facility?

My sarcastic answer would be hire someone. However like I said 40 billion times, I don't mean build Amtrak build the great grand casino. I am talking about a casino about the size of 2 two car garage. Any Bubby can manage that.

4) How much would Union Pacific (or is it BNSF at that point? I forget, but nonetheless) charge to essentially take up part of their right of way with this new development?

5) Does Greyhound actually have a need for a stop right there, or are you presuming to speak for them in this matter?

Greyhound would move to a facility on I-10 with nice accommodations.

Once you have identified all of the costs above (which are guaranteed to be in the eight figure range, minimum), where do you propose Amtrak find the money to pay for this?

Amtrak serves about 500 stops across the country. Assuming an extremely lowball price tag of about $10 million (I'm sure it's much more) to buy the land and build one of these, if Amtrak were to do something like this at every stop in the country, it would cost $5 billion (and remember, that's a lowball figure; in larger cities, things tend to cost a lot more). Even assuming they don't do even half of the stations, you're still talking a price tag that will likely exceed a billion dollars in land acquisition and construction costs (to say nothing of all the staff or consultants you'd need to hire to get into this entirely new line of business that probably nobody at Amtrak has experience in right now).

I said 10 billion. Do you read before attacking?

As I said above, there's a reason Denny's doesn't run hotels. There's a reason American Airlines doesn't own gas stations. There's a reason H&R Block didn't get into the web hosting business.

It's called short-sighted, thinking within the box.

Yes, there are profits to be had in each of those fields. But you need expertise in those fields to succeed. Amtrak doesn't have expertise in these new and completely different industries you're talking about. Getting that expertise would cost tons of money. Buying the land needed to develop these ideas would cost tons more. Who is going to pay?

Nobody, because those in power thinks like you.

 

[Ryan]

You're missing the obvious point, even though it's been pointed out to you over and over again.

Why take whatever profitable scheme you're going to come up with and saddle it with $1.3 billion in train related losses?

If there was profit to be made in running passenger trains, a business would have certainly stepped up to make that profit.