For years, the annual fare rise cycle was a triple own goal for the rail industry. The dreaded January price hikes arrived at the worst possible time – after Christmas, in the cold and dark, when commuters were already reluctant to return to work. It made for great headlines, but bad optics.
But things have changed. Fare increases are now tucked away in March, shielded from post-pandemic scrutiny. The traditional ‘captive commuter’ market has become more price sensitive as hybrid working becomes the norm. While those who work in factories, shops, building sites and hospitals may still have to turn up every day, many of us now have more choice on when, how and even if to travel. Across the board, passengers are cannier about cost and they’re trading down: peak to off-peak, flexible to advance, first to standard.
Meanwhile, rising cost pressures on the railway and the government’s focus on cutting expenses while increasing revenue make the need for a new approach. And the answer isn’t higher fares – it’s smarter retailing and a fair competitive market for independent rail retailers.
Right now, rail has a huge untapped market. A recent YouGov survey found that 20% of Britons never take the train, and another 25% travel just twice a year. That’s millions of potential passengers who could be using rail – but aren’t. The tourism sector has a term for this: cold beds. Every empty hotel room is a missed opportunity – lost revenue, lost tax, lost employment. It’s the same for rail. Every cold seat is a lost journey, a missed fare, and wasted capacity.
The rising cost of rail tickets means that we must make train travel more attractive to passengers. With the cost-of-living crisis putting pressure on household budgets, fare increases are the last thing consumers need – especially as more people return to the office. Now more than ever, the rail industry must focus on offering better value and incentives to encourage people to choose rail.
So, how do you drive rail growth and create a better rail system that’s better for passengers and the rail industry?
The answer lies with independent rail retailers. The government has already announced the vital need of independent rail retailers and unlike traditional rail operators, third-party retailers are driven by growth. Third party retailers’ commission-based model means they are fully incentivised to sell more tickets, attract new passengers, and fill empty seats. They have made great strides in this area, as they’re perfectly incentivised to grow the market through their commission-based model and huge marketing databases.
From tempting customers to make extra journeys to bidding for first class upgrades to splitting tickets for a cheaper fare – independent retailers are constantly on the hunt for growth. And as commercial businesses, they have a keen eye on keeping passengers happy and costs under control. But there’s even more opportunity out there: just think what they could do if they knew which trains had empty seats, both historically and in real time.
So why not leverage private investment to do the heavy lifting? The rail industry thrives on innovation, and third-party retailers play a crucial role in driving competition, improving customer experience, and offering more flexible ticketing options. While third-party retailers may charge a small booking fee, they often help passengers save money through tools such as split ticketing as well as personalised journey planning. These services not only improve transparency but also empower customers with greater control over their travel choices.
Ultimately, it’s about understanding what customers want – convenience, affordability, and flexibility. By embracing competition and innovation, we ensure that rail travel remains accessible and customer centric. Choice is key, and our members are committed to providing it. By getting it right, we can create a system that works for everyone.
It’s time to make rail retailing work for all.
Anthony Smith, Chair at Independent Rail Retailers
