Raising Revenue

[Anderson]

My understanding is that 66/67 still has a rolling all night cafe...which, technically speaking, might make it the only all-night bar on the Eastern Seaboard.

 

[trainviews]

Checked bagage

I can't tink of any of the European railroads where checking bagage is for free. All of them charge and for a few of them this has led to such a small demand that the checked bagage system has been abandoned all together. Little old ladies and others who have trouble handling their suitcases just alert the car attendant, and no one seems to really miss it.

Given the very long runs on the Amtrak LD's there is probably a need and a market for checked bagage, but it is expensive to maintain for free. As an example the station i Portland, Oregon has 9 trains a day, and that requires two guys at the bagage counter at all times, 7 days a week. This takes a lot of money to run.

 

[Amtrak George]

CHECKED BAGGAGE: Due to the nature of the trips I take, I rarely use it, but I want to have it there when I need it, and other people need it often. Plus, if you don't have it, you will really crowd the train with bunches of excess baggage (no pun intended).

The other thing is, free checked baggage is one of the little amenities that sets Amtrak apart from the money grabbing airlines and I think the PR damage of taking it away would outdo any financial benefit.

One other little thing: I am a gun owner, but I really prefer that not just everyone packs heat in their carry ons. And can you imagine the headaches with homeland security if no one checks baggage and piles it on the train? Or maybe if they won't let you check without a fee, and won't let you carry more than two items on, people just won't ride the train.

My opinion is that Amtrak should limit revenue raising ideas to things that don't cheapen the product (i.e. don't put a bunch of ads on locos) and don't reduce the quality of service (checked baggage etc.).

 

[Anderson]

I agree that losing free checked baggage would be a PR disaster from the standpoint of it being something that Amtrak, and only Amtrak, allows. Actually, Amtrak really should start playing up the angle of "We haven't changed our free baggage policies in X number of years" in some ads.

 

[amtrakwolverine]

Here's another way to generate revenue. create some kind of incentive to make conductors want to sell onboard upgrades. right now it's more miss then hit with finding a conductor willing to do the paper work and that's costing amtrak revenue.

 

[Anderson]

Here's another way to generate revenue. create some kind of incentive to make conductors want to sell onboard upgrades. right now it's more miss then hit with finding a conductor willing to do the paper work and that's costing amtrak revenue.

I think you need to be able to run a real-time reservation interface from the train for that to work, or otherwise block off online reservations at some point. The problem with selling slots onboard in any volume is that you do run the risk of a conductor selling open space only for someone to book that space and board later in the route. This is particularly possible on the western LD routes with 40-50 hour travel times...someone could easily book a sleeper DEN-EMY or SLC-EMY after the Zephyr leaves CHI.

That said, I agree...though this might backfire in the "off season": If I see that I can buy 4 roomettes on a train on departure in October or November (i.e. low traffic times) and the slot isn't either low bucket or cheap enough to offset the cost (this can happen), do you think I'm going to fork over for that roomette until I get on the train when I know it's going to be low bucket on board?

 

[afigg]

I agree that losing free checked baggage would be a PR disaster from the standpoint of it being something that Amtrak, and only Amtrak, allows. Actually, Amtrak really should start playing up the angle of "We haven't changed our free baggage policies in X number of years" in some ads.

I agree to some extent that Amtrak might take a PR hit if they were to start charging for all checked bags, but how big a deal is Amtrak's baggage policy? How many passengers check bags and how many bags are checked on any given day? I would guess that even on the LD and medium distance trains, most passengers carry their luggage onto the train rather than check it. If there are not that many bags checked, the amount of revenue that would be gained from cutting the number of free checked bags per passenger and an increase in the additional bag fee would raise only a modest amount of revenue.

Are there any figures on how much is costs to operate the baggage cars and baggage handling? If it turns out to be a significant cost item, the current policy of 3 free checked bags per passenger - up to 3' x 3' x 3' in size! - is extremely generous. A couple traveling together could check six 50 lb bags up to 1 cubic yard in size each and not pay anything extra. Could add up.

Another revenue stream Amtrak is pursuing, BTW, with the roll-out of Wi-Fi is paid media delivery on trains. It is discussed in their FY12 business plan about adding the addition of media on trains will also provide revenue from the sales of on-board movies. With the storage capacity of today's devices, people can easily bring along preloaded movies so it likely won't be very lucrative, but Amtrak may be able to offset the cost of the Wi-Fi by selling download movies to those who want something else to watch.

 

[AlanB]

Here's another way to generate revenue. create some kind of incentive to make conductors want to sell onboard upgrades. right now it's more miss then hit with finding a conductor willing to do the paper work and that's costing amtrak revenue.

I think you need to be able to run a real-time reservation interface from the train for that to work, or otherwise block off online reservations at some point. The problem with selling slots onboard in any volume is that you do run the risk of a conductor selling open space only for someone to book that space and board later in the route. This is particularly possible on the western LD routes with 40-50 hour travel times...someone could easily book a sleeper DEN-EMY or SLC-EMY after the Zephyr leaves CHI.

That said, I agree...though this might backfire in the "off season": If I see that I can buy 4 roomettes on a train on departure in October or November (i.e. low traffic times) and the slot isn't either low bucket or cheap enough to offset the cost (this can happen), do you think I'm going to fork over for that roomette until I get on the train when I know it's going to be low bucket on board?

Actually selling those rooms last minute is a mixed bag for Amtrak. Yes, it is extra revenue. But it also incurs extra costs too as you've now got to launder the linens and you've got that extra food going out the door.

 

[AlanB]

I agree that losing free checked baggage would be a PR disaster from the standpoint of it being something that Amtrak, and only Amtrak, allows. Actually, Amtrak really should start playing up the angle of "We haven't changed our free baggage policies in X number of years" in some ads.

I agree to some extent that Amtrak might take a PR hit if they were to start charging for all checked bags, but how big a deal is Amtrak's baggage policy? How many passengers check bags and how many bags are checked on any given day? I would guess that even on the LD and medium distance trains, most passengers carry their luggage onto the train rather than check it. If there are not that many bags checked, the amount of revenue that would be gained from cutting the number of free checked bags per passenger and an increase in the additional bag fee would raise only a modest amount of revenue.

Are there any figures on how much is costs to operate the baggage cars and baggage handling? If it turns out to be a significant cost item, the current policy of 3 free checked bags per passenger - up to 3' x 3' x 3' in size! - is extremely generous. A couple traveling together could check six 50 lb bags up to 1 cubic yard in size each and not pay anything extra. Could add up.

Another revenue stream Amtrak is pursuing, BTW, with the roll-out of Wi-Fi is paid media delivery on trains. It is discussed in their FY12 business plan about adding the addition of media on trains will also provide revenue from the sales of on-board movies. With the storage capacity of today's devices, people can easily bring along preloaded movies so it likely won't be very lucrative, but Amtrak may be able to offset the cost of the Wi-Fi by selling download movies to those who want something else to watch.

I can't answer some of the other baggage questions, but I can tell you that Amtrak does move quite a few bags on many trains. Even at a smaller station like Albany, the luggage cart is usually quite full as it loads/unloads from the baggage car.

 

[pennyk]

I agree that losing free checked baggage would be a PR disaster from the standpoint of it being something that Amtrak, and only Amtrak, allows. Actually, Amtrak really should start playing up the angle of "We haven't changed our free baggage policies in X number of years" in some ads.

I agree to some extent that Amtrak might take a PR hit if they were to start charging for all checked bags, but how big a deal is Amtrak's baggage policy? How many passengers check bags and how many bags are checked on any given day? I would guess that even on the LD and medium distance trains, most passengers carry their luggage onto the train rather than check it. If there are not that many bags checked, the amount of revenue that would be gained from cutting the number of free checked bags per passenger and an increase in the additional bag fee would raise only a modest amount of revenue.

Are there any figures on how much is costs to operate the baggage cars and baggage handling? If it turns out to be a significant cost item, the current policy of 3 free checked bags per passenger - up to 3' x 3' x 3' in size! - is extremely generous. A couple traveling together could check six 50 lb bags up to 1 cubic yard in size each and not pay anything extra. Could add up.

Another revenue stream Amtrak is pursuing, BTW, with the roll-out of Wi-Fi is paid media delivery on trains. It is discussed in their FY12 business plan about adding the addition of media on trains will also provide revenue from the sales of on-board movies. With the storage capacity of today's devices, people can easily bring along preloaded movies so it likely won't be very lucrative, but Amtrak may be able to offset the cost of the Wi-Fi by selling download movies to those who want something else to watch.

I can't answer some of the other baggage questions, but I can tell you that Amtrak does move quite a few bags on many trains. Even at a smaller station like Albany, the luggage cart is usually quite full as it loads/unloads from the baggage car.

luggage cart is VERY full in Orlando

 

[jdcnosse]

From the looks of it when I got off the SWC in Flagstaff last time, there was a lot of check baggage coming of the train then too! Yes it's the closest big city to the Grand Canyon, and the only way (currently) to book straight through to Phoenix, but still.

 

[dlagrua]

Way to up revenue is to sell more sleepers. For instance on the Cardinal, Lake Shore Ltd, and Silvers they are 100% full much of the time. Just got to wait for new Equipment to come onboard.

 

[Anderson]

I agree that losing free checked baggage would be a PR disaster from the standpoint of it being something that Amtrak, and only Amtrak, allows. Actually, Amtrak really should start playing up the angle of "We haven't changed our free baggage policies in X number of years" in some ads.

I agree to some extent that Amtrak might take a PR hit if they were to start charging for all checked bags, but how big a deal is Amtrak's baggage policy? How many passengers check bags and how many bags are checked on any given day? I would guess that even on the LD and medium distance trains, most passengers carry their luggage onto the train rather than check it. If there are not that many bags checked, the amount of revenue that would be gained from cutting the number of free checked bags per passenger and an increase in the additional bag fee would raise only a modest amount of revenue.

Are there any figures on how much is costs to operate the baggage cars and baggage handling? If it turns out to be a significant cost item, the current policy of 3 free checked bags per passenger - up to 3' x 3' x 3' in size! - is extremely generous. A couple traveling together could check six 50 lb bags up to 1 cubic yard in size each and not pay anything extra. Could add up.

Another revenue stream Amtrak is pursuing, BTW, with the roll-out of Wi-Fi is paid media delivery on trains. It is discussed in their FY12 business plan about adding the addition of media on trains will also provide revenue from the sales of on-board movies. With the storage capacity of today's devices, people can easily bring along preloaded movies so it likely won't be very lucrative, but Amtrak may be able to offset the cost of the Wi-Fi by selling download movies to those who want something else to watch.

I can't answer some of the other baggage questions, but I can tell you that Amtrak does move quite a few bags on many trains. Even at a smaller station like Albany, the luggage cart is usually quite full as it loads/unloads from the baggage car.

Honestly, and I am hesitant to suggest this, but they might want to consider selling a "faster" Wi-Fi of some sort (i.e. something that allows media streaming, etc., even at limited speeds) at a premium. I'm hesitant for obvious reasons, but it could work.

 

[afigg]

Way to up revenue is to sell more sleepers. For instance on the Cardinal, Lake Shore Ltd, and Silvers they are 100% full much of the time. Just got to wait for new Equipment to come onboard.

The additional sleeper capacity for the eastern LD trains will provide some revenue. The poor Cardinal only took in $1.326 million in sleeper ticket revenue in FY2010 (according to the September, 2010 monthly report). Even adding a baggage-dorm may double those sales if the cardinal only stays at 3 times a week.

However, we should maintain some perspective on sleeper sale revenue. The total sleeper ticket revenue from the LD trains for FY10 was $164.7 million. The total ticket revenue for the LD trains was $453.8 million, but I do not know if that include sleeper revenue. The total ticket revenue for the Acela was $440 million and the Acela made a book profit above the rails. Adding 2 business class cars with 65 seats each to the Acela consists for a ~42% increase in capacity is quicker and easier way to increase revenue. Hence the push to acquire the 40 Acela cars as the next major equipment order.

I looked at the FY10 financial report again after re-reading this thread to see what the revenue breakdown was. The section on the defeased sale-leaseback transactions of 23-29 year terms that were entered into in 2000 makes my head spin. Amtrak racked up a lot of debt back then on the "glidepath to", well, cratering, which they are working to get rid of, but still have to make payments on. Fortunately the 2008 PRIIA act includes fund transfers from the Treasury which will close out some of that debt via exercising early buyout options. If Amtrak had not taken out all those equipment leases on already then aging equipment back then to raise cash, they would likely would be in a far better position to be able to fund ordering new equipment via RRIF or commercial loans at pretty low interest rates. Which would lead to increased capacity, ridership, and revenue.

 

[daveyb99]

How about selling a prepaid Cafe-Card, with a 20% bonus (buy $1.00 get $1.20, etc).

How about doing away withe the whole Sleeper bucket business. Create one fare. That might draw some hoping for that onboard upgrade into buying before the trip.

 

[Anderson]

How about selling a prepaid Cafe-Card, with a 20% bonus (buy $1.00 get $1.20, etc).

How about doing away withe the whole Sleeper bucket business. Create one fare. That might draw some hoping for that onboard upgrade into buying before the trip.

I think the best you could hope for on this front would be to lock fares to specific dates unless Amtrak could really vary the base fare (see CN's Red/White/Blue fare system from the 60s for how locking fares to dates could work) and not cut the base charge down to low bucket when you get a sleeper, but even then you run into problems of "burps" in travel demand. Now, something in the vein of Via Express beyond just the Amtrak Deals site might be worth pursuing (as those are, IIRC, coach-only as a rule) alongside bumping some sleeper fares/consolidating out the lowest bucket for the most part. The problem with just one bucket is that you've got to find some way to "encourage" people to travel on off days (say, leaving Thursday night instead of Friday or returning on the Monday train instead of Tuesday) or what you get are slam-full trains on the weekends with people willing to fork out more not able to get a seat, and half-empty one on some weekdays when you still have to move some cars around on the trains anyway.

I do like the idea of prepaid food service cards, even without a bonus. I know that VIA does something sort of like this with the meal tickets. One interesting "switch" Amtrak could do is offer the cards' use as being "sales tax free"...which would technically be true, but I think most folks wouldn't realize that on-board purchases already are.

Still, adding capacity on crowded routes is probably the main way you have to go. I'm wondering quite honestly if it wouldn't do for Amtrak to, at some point, seriously look at getting permission/waivers to import some middle-aged equipment from Europe (even strictly for use on either lower-speed corridors or, in time, grade-separated corridors). I know there are issues with the safety standards (which is why grade separation comes up), but being able to get second-hand equipment with 20 years left in its design life might ultimately be a money-saving proposition on the capital budget side and improve the operating numbers substantially.

Edit: I know that I read a report that sleeper passengers pay a larger share of the cost of their transportation net of perks than coach passengers (even accounting for the lower sleeping car capacity), but those numbers were also about 8-10 years old IIRC. I wonder what those numbers look like these days.

 

[cirdan]

If we look at the cursed airlines for ideas, they could start charging for stuff they don't already charge for, such as extra bags. They could charge sleeping car passengers for food. I don't believe it was always included in the fare. And they could raise fares on routes when demand is outstripping supply, sound business sense. They could put GOOD wireless on all trains, and then charge for access. Make some really deluxe sleeping car accommodations, call it "First Class" and charge out the wazoo. Maybe brand it with a luxury hotel chain like Fairmont.

Rather than imitating airlines, Amtrak could try pushing on the strengths of not being an airline.

How about

- a selection of regional microbrews on tap in the bar car

- a small shop selling tax-free designer items as in airports (legal permission would have to be obtained for this of course, but why tax to subsidize when you can cut out the middle man?)

 

[VentureForth]

--Allow Taco Bell to take over the lounge car food concession on all trains--Pay toilets and showers

--Extra charge for seating on the side of the train with the "good" scenery

--Extra charge for seating

--Pay one price "All you can drink" wristband

Taco bell for the Cafe' Car, Waffle House for the Diner!

 

[Devil's Advocate]

- a selection of regional microbrews on tap in the bar car- a small shop selling tax-free designer items as in airports (legal permission would have to be obtained for this of course, but why tax to subsidize when you can cut out the middle man?)

Under the current pricing structure wouldn't micro brews on tap be $10 or more, tax or no tax? Who exactly is going to pay $10 for a beer in a McDonald's plastic bench setting? I would strongly support this idea on cars like the PPC. Also, you'll probably never see "duty free" stores on a strictly domestic train trip. Do any of the international trains have duty free products? If not then maybe it would be wise to start including them.

--Allow Taco Bell to take over the lounge car food concession on all trains--Pay toilets and showers

--Extra charge for seating on the side of the train with the "good" scenery

--Extra charge for seating

--Pay one price "All you can drink" wristband

Taco bell for the Cafe' Car, Waffle House for the Diner!

I think Taco Bell tastes like plastic & vinegar. Which sort of makes sense, since the vast majority of what Taco Bell serves is shipped, stored, and heated inside plastic bags. I must say that Taco Bell did a glorious job of proving that the meat-like product included in their entrees was not fake meat filler as so many had been led to believe, but was simply really low quality beef.

I'd be OK with Waffle House for breakfast but I'm not sure they'd be the best pick for Lunch or dinner. I do wish Amtrak could find someone other than Aramark to handle the diner. There should be trials for other providers that may or may not pan out but would at least show Amtrak is trying to do something about the current quality. I know there are many who consider what we have now to be the best it's been in a long time, but I believe they have a lot more work to do to bring it up to a reasonable level.

At the current level I'd be happy if they unbundled the meals entirely. Then we'd finally be able to see how much support the diners truly have when everyone has to make a choice about handing over their money.

 

[Bob Dylan]

How about taking some of the spare CCCs, which many say are available, reconfigure them to look sort of like the PPCs on the Starlight, and make them First Class only Lounges on the Land Cruise Trains (ie EB/SWC/CZ/TE).

Just having a bar that could provide GOOD Coffee, various Adult Beverages and maybe even decent snacks, should raise at least enough to pay for the LSA. Even if a surcharge was placed on the Rooms to help finance this, think it would be a source of revenue to help pay the freight so to speak!

 

[Anderson]

How about taking some of the spare CCCs, which many say are available, reconfigure them to look sort of like the PPCs on the Starlight, and make them First Class only Lounges on the Land Cruise Trains (ie EB/SWC/CZ/TE).

Just having a bar that could provide GOOD Coffee, various Adult Beverages and maybe even decent snacks, should raise at least enough to pay for the LSA. Even if a surcharge was placed on the Rooms to help finance this, think it would be a source of revenue to help pay the freight so to speak!

If demand was such that another sleeper was needed on the Builder, I think this might come to pass if equipment allowed it. The problem is that you would need additional diners to fill the gap on the CONO and TE. Even a simple rearrangement to have them serve as a first class bar/lounge while having one half of it still stand in for extra diner capacity might well be in order on some of the more crowded trains (I have thought about the idea of having a diner and a CCC on some of the more crowded trains, both to ease stress on the diner and to add lounge space). Amtrak does seem to be thinking in this vein with the Zephyr and Builder, at least, IIRC, and (as usual if they could tighten the CHI-LAX times ever so slightly) it might be worth looking into for the SWC. I don't see it happening on the TE/SL, though, because demand isn't there right now.

Honestly, if Amtrak can get a bit more demand on the Silvers (and get extra sleepers on them), some improved single-level lounges for the Florida services might be in order...and ditto the LSL (and the Crescent NYP-ATL if they can double up the sleepers). I think the break point for something like this is 4-5 dedicated sleepers, honestly (and most trains are at 2.5-3 right now)...but it's a good idea.

 

[AmtrakBlue]

Sell Coke products instead of Pepsi products.

 

[Devil's Advocate]

I know the Superliners are not modular by design, but was it completely impossible to convert some of them into sleepers or even half-sleepers?

 

[afigg]

Taco bell for the Cafe' Car, Waffle House for the Diner!

The discussion on this thread is about how to raise or increase revenue, not reduce it. :lol:

 

[jdcnosse]

Sell Coke products instead of Pepsi products.

They'd totally get $2.00 out of me for a Coke.

I'm not going to pay $2.00 for a Pepsi though.