Make or break time for rail
Pierre-Yves Guillaume of Amadeus goes into detail on the changing nature of rail companies and passengers in the modern Asia Pacific
In 1987 Amadeus was started when four airlines agreed to team up to make a new global distribution system. As the years went by the world opened up and the company evolved into an IT supplier, signing partnerships with multiple global transport providers.
In 2007 Amadeus added a rail division and earlier this year Amadeus launched a white paper detailing five make or break factors for the rail industry in Asia Pacific.
Tell us a little bit about the white paper and what Amadeus has been doing in Asia since the launch of its rail division.
‘We’ve been monitoring the development in Asia over the last few years and the purpose of the white paper that we’re announcing here at Asia Pacific Rail 2017 in Hong Kong is to provide an insight as to what the challenges are that we expect the rail industry to face in Asia and what kind of solutions we can provide.
We have identified five ‘make or break’ factors based on feedback from Europe and we believe these to be key to helping rail move to the next level in Asia.
The first factor is retaining the customers that each rail network currently has. A growing trend amongst passengers is that they want to have a personalised travel experience, so the railways need to prove their value to their customers.
In China they used to plan their journey in groups, now the trend has changed so that 50 per cent of people in China want to go on independent trips. Like in Europe before, they are entering the world of self managed booking.
We are talking about an increasing population of 200-300 million middle class who have been travelling internally, even though only five per cent of people in China own a passport they all want to travel overseas.
There is this convergence where we see new ways for potential travellers to request different types of experience and increasing numbers of people that will be able to travel in the next decade. This means that rail has the momentum.
There are 1.3 billion airline passengers in Asia and if you want to fly around Northeast Asia you have to go from airport to airport, in huge cities this can get complicated.
China will invest have invested $500 billion in rail by 2020 to reach the objective of having 80 per cent of the country connected by high-speed. This is model of providing city to city travel in a simpler and more efficient way is rail’s proposition.’
Where does Amadeus fit into all this?
‘Our objective is to understand both the new and evolving travellers and help our customers to meet their needs. We feel that rail is not as visible at the search and booking stage as it should be and it does not reflect the importance of its role over the coming years.
This is the second make or break factor: data. Mobile adoption is huge in Asia and people planning trips are changing from point-to-point passengers into end-to-end travellers.
So when they look at a journey and cannot see a rail timetable clearly or the location and accessibility of the station is not obvious, they worry that they might put their entire trip at risk if they incorporate rail into it.
Open data is enriching the lives of these travellers and helping them to acquire the broadest experience possible and book a trip from their home to their hotel at their final destination. In Paris and Mumbai they have the high-speed train connected to the airport with a seamless connection. The point is to make sure that this is clear and available in the online shopping experience.
Timetables for booking stages and features are accessible on all channels, this is where Amadeus can facilitate communication between the providers of the service and the sellers of the service.’
Is China where you’re focused?
‘Last year in 2016 we had close to four billion people flying across the globe, in China alone you had three billion that took a train, we are talking about shared numbers here comparing one country to the entire planet.
Everyone is interested in working with China and we are currently working with almost all the online travel agents there, we are powering websites for airlines and we have offices here in Hong Kong and in Shanghai and Beijing.
There is different stage of development in China but there are other highly developed nations in Northeast Asia and the developing countries of Southeast Asia also offer similar potential but neither has yet to meet the volume that China is capable of.’
How distinct is your strategy for Northeast Asia compared to Southeast Asia?
‘Every market is unique, every strategy is unique in itself, finding the right equation requires flexibility so you have to adapt and talk to all IT partners and travel sellers alongside the railway operators and we talk to everyone to help the market to converge which is where we see things eventually going.
We think that in the years to come we will see a blend of interaction between the networks. If you take KoRail or Japan they are measuring their travel times in seconds, not minutes. Then you have the quality and the power of China to make high-speed viable and to deliver it overseas.
In Southeast Asia they have ageing infrastructure but they have proved their commitment over a longstanding period to modernize and extend the network and even offer high-speed services and at one stage the whole Asian continent will be connected along the Pacific coast. Now, take India, on the low-end it is incredibly busy but the infrastructure has suffered from a lack of investment and they are struggling to keep their high-end customers as a result of this. They need to upgrade the customer experience. So we are seeing that even where the networks are struggling, there are still interesting developments.
So in Northeast Asia and the Pacific markets we have a mix of state owned and privately owned networks, but everybody talks to everybody. They need a complete change of DNA to upgrade their skills and their IT. This is what Amadeus hopes to achieve with the white paper.’
Which is the most important thing that railway companies should take away from the white paper?
‘The whole industry needs to go to the next level and change its mindset to put the traveller at the core of everything it does.
This means a mobile first approach at every stage, in Japan they have a new mobile app that is offered in multiple languages which is very useful because finding your way around train stations in Japan is really difficult.
There are some areas where high-speed rail makes a lot of sense, linking two cities which used to rely on airplanes. Now there are new free trade zones bringing value to peninsula Malaysia as all along the rail corridor there will be real estate opportunities.
In India there is a huge demand for high-speed rail to connect new cities that are competing for secondary city status.’
Is there anything else you’d like to add?
‘We really feel that everything is aligned for rail to be the next success story in Asia. The chain of partners along the railway selling network can now converge on one goal to provide and sell the rail experience that travellers want.
Rail must understand that it is in competition with all forms of transport now. One way to capture a bigger share of the market is by selling rail tickets alongside an LRT to a main station in the city centre.
It helps to understand the economics behind other transport providers, like auction selling upgrades as they do with airlines for example.’