Pricing strategy by TOC

[ForTheLoveOf]

I've been looking to see if there is a post about this already, but I don't think I can find anything.

It's clear that each TOC has a different pricing strategy when it comes to fare setting. So, can anyone make suggestions for a list, by TOC and by ticket type?

I would suggest a format like this:

TOC brand name
Anytime pricing strategy:
Off-Peak pricing strategy:
Super Off-Peak pricing strategy (where available):
Advance pricing strategy (where available):
Season ticket pricing strategy:

Thanks!

 

[rebmcr]

That's all very commercially-sensitive. I doubt there will be many (if any) answers of quality here.

 

[55018ballymoss]

Exactly.
You seriously expect to get any answers to commercially sensitive information fundamental to a franchise operation?

 

[OLJR]

I am an airline pricing strategy specialist (check out my site!) and travel by rail in the UK quite a bit, so I might be qualified to comment based on what I have observed out there in the market. I will comment specifically on Advances, mainly for VTEC since they are my regular operator.

VTEC
(i) Fare range: Offer a wide range of fares, ranging from cheap to extremely expensive, across both compartments - Advance fares available in almost all markets
(ii) Non-dynamic discounting: In light of (i) there is no need to have frequent sales and promotions, save one or two regulars through the year
(iii) Dynamic discounting and incrementing: Not practiced
(iv) Inflation: Fares increase a small amount every year, sometimes approximately every six months
(v) Fare mix: Set inventory levels when trains become available and (by appearances) do not actively manage the availability so when fares sell out they sell out, even if forecasts change significantly - all fares appear to be used extensively
(vi) Construction logic: O&D based
(vii) Optimisation logic: leg & segment based
(viii) Overbooking: STD to 1ST upsell on trains that are forecast to be busy in STD but not in 1ST is unlikely to be high, managing overbooking through encouraging passengers who might otherwise sell STD to voluntarily upgrade (Seat Frog role unknown); actively set high prices on services forecast to be busy and set low prices on services forecast not to be busy, even when close in the schedule
(ix) Ancillaries: Fully bundled service in 1ST, limited bundling available in STD - catering is high quality and appears to offer passengers things that they actually want, for a price - I do not know whether or not the catering prices are set by the pricing department or someone else
(x) Corporate deals: I don't know anything about this
(xi) Schedule element: Trains with fewer stops are almost always more expensive, even at times of day when both few-stop and many-stop services are forecast with low demand

GWR & CrossCountry
1ST fares seem extremely expensive and frequently the lower range of the fares that are filed appear to have extremely limited availability, even early in the booking window when (i) high willingness to pay travellers are not booking and (ii) when STD is forecast to be busy yet 1ST departs nearly empty

Hope that helps!

 

[AlterEgo]

I've been looking to see if there is a post about this already, but I don't think I can find anything.

It's clear that each TOC has a different pricing strategy when it comes to fare setting. So, can anyone make suggestions for a list, by TOC and by ticket type?

I would suggest a format like this:

TOC brand name
Anytime pricing strategy:
Off-Peak pricing strategy:
Super Off-Peak pricing strategy (where available):
Advance pricing strategy (where available):
Season ticket pricing strategy:

Thanks!

CrossCountry
Anytime pricing strategy: Expensive
Off-Peak pricing strategy: Expensive
Super Off-Peak pricing strategy: What's a Super Off Peak?
Advance pricing strategy: Expensive
Season ticket pricing strategy: Expensive

 

[Starmill]

I don't really know what you mean by 'pricing strategy'. The actual strategy isn't something they will tell you.

However, from the fares data you can determine what they are doing and make informed guesses at why. For example, it's clear that CrossCountry have an agenda of adding restrictions wherever possible to long-distance Off-Peak tickets, increasing the price hugely on long-distance Anytime tickets and deleting wherever possible Off-Peak Day tickets. If they can't delete them, they'll add their crazy BX restriction. This is all in aid of pushing everyone towards buying XC's Advance tickets. They price these in a very granular way, inflating their costs at the times when they think more people will be willing to travel. They were the first to make them available on the day of travel too in order to try to push people onto XC only tickets who might otherwise have bought interavailable fares, while still giving them ultimate control over numbers which they do not have with dedicated walk-up tickets. They are also trying to build a market long-term in Scotland with their cheaper dedicated Glagow - Edinburgh tickets. They recently participated in a price war with VTEC and TransPennine but deleted their fares in the North East, presumably because it was causing overcrowding. They charge as much as they possibly can for First Class, except in the case of some Advance tickets late at night. They often charge very little for Advance tickets for short journeys like Birmingham to Stafford to try to compete with the other operators, even in First Class, while continuing to charge a lot for longer journeys. They will, where possible, take over flows from other operators like Birmingham to Leamington Spa and Banbury which they took from Chiltern and various flows between Yorkshire and Derby which they took from EMT.

 

[coppercapped]

If you want an unbiased description of the whole process of fare setting, the House of Commons Library has a range of informative documents.

 

[yorkie]

I agree with other posters; you won't get an actual answer as to what the strategy is.

But you can ask for observations. These will be subjective. Some people may be better "qualified" or "informed" than others but unless you've met the person you can't be sure how accurate their observations may be.

AlterEgo's post makes an amusing point about CrossCountry, but a more detailed analysis would find that they do actually price some short distance Advance fares very reasonably, such as Stafford to Birmingham, where they are competing with West Midlands Trains. You can get some long distance journeys down in price by either getting your calculator out, or using an accredited "ticket splitting" website!

 

[ForTheLoveOf]

Thanks for the responses. What I was looking for was observations based on the prices - obviously few (likely none) of us are privy to the TOCs' actual pricing strategies, but with open pricing/fares data it isn't hard to deduce it.

Clearly, XC has a high-price strategy - except where they have competition. Would it be fair to lump VTWC into this category?

Basically, what I'm looking for is a kind of indication as to which fare-setters I should be trying to use, and which I should try to avoid - making best use of my fare maps (where I can see who sets the fare from each station).

 

[bb21]

You'll be better off doing it on a case-by-case basis depending on your journey requirements.

TOCs will likely have different pricing strategies for long-/medium-/short-distance journeys, and depending on the region or even station, for example. It is impossible to generalise as a whole.

 

[AlterEgo]

You'll be better off doing it on a case-by-case basis depending on your journey requirements.

TOCs will likely have different pricing strategies for long-/medium-/short-distance journeys, and depending on the region or even station, for example. It is impossible to generalise as a whole.

Agreed.

As @yorkie observes above, in some cases XC do price short distance Advances competitively at certain times of the day. This leads to splitting opportunities. There are however some routes which are uncompetitive even where competition exists. A TOC’s pricing strategy will naturally vary between core areas of their operation and flows where they are not the primary operator.

 

[Starmill]

Basically, what I'm looking for is a kind of indication as to which fare-setters I should be trying to use, and which I should try to avoid - making best use of my fare maps (where I can see who sets the fare from each station).

In very very very broad terms, good value will often be achieved if there is an Off-Peak Day Return (especially if restricted with a code that starts in B, J or W) priced by:
Northern
West Midlands Trains
Great Western Railway

Super Off-Peak tickets priced by SWR and Greater Anglia are not bad, an extra discount usually applies at the weekend. TLGN weekend Super Off-Peak fares are very cheap.

Super Off-Peak tickets priced by Chiltern are generally a good deal. Super Off-Peak Single tickets priced by GWR are usually a good deal.

Some Scotrail Off-Peak and Off-Peak Day fares are good value for medium distances. Some ATW Anytime Day fares in Mid and South Wales are fantastic value.

Where Virgin Trains have priced a dedicated fare, it's usually sensibly priced but of limited use. TransPennine have a few dedicated fares that are not bad value, but otherwise you can forget it.

A ticket with a 2U or 8A restriction (or A1, in the unlikely event that you find one) is probably quite good value. A ticket with 2V restrictions is probably not.

 

[Wallsendmag]

I am an airline pricing strategy specialist (check out my site!) and travel by rail in the UK quite a bit, so I might be qualified to comment based on what I have observed out there in the market. I will comment specifically on Advances, mainly for VTEC since they are my regular operator.

VTEC
(i) Fare range: Offer a wide range of fares, ranging from cheap to extremely expensive, across both compartments - Advance fares available in almost all markets
(ii) Non-dynamic discounting: In light of (i) there is no need to have frequent sales and promotions, save one or two regulars through the year
(iii) Dynamic discounting and incrementing: Not practiced
(iv) Inflation: Fares increase a small amount every year, sometimes approximately every six months
(v) Fare mix: Set inventory levels when trains become available and (by appearances) do not actively manage the availability so when fares sell out they sell out, even if forecasts change significantly - all fares appear to be used extensively
(vi) Construction logic: O&D based
(vii) Optimisation logic: leg & segment based
(viii) Overbooking: STD to 1ST upsell on trains that are forecast to be busy in STD but not in 1ST is unlikely to be high, managing overbooking through encouraging passengers who might otherwise sell STD to voluntarily upgrade (Seat Frog role unknown); actively set high prices on services forecast to be busy and set low prices on services forecast not to be busy, even when close in the schedule
(ix) Ancillaries: Fully bundled service in 1ST, limited bundling available in STD - catering is high quality and appears to offer passengers things that they actually want, for a price - I do not know whether or not the catering prices are set by the pricing department or someone else
(x) Corporate deals: I don't know anything about this
(xi) Schedule element: Trains with fewer stops are almost always more expensive, even at times of day when both few-stop and many-stop services are forecast with low demand

GWR & CrossCountry
1ST fares seem extremely expensive and frequently the lower range of the fares that are filed appear to have extremely limited availability, even early in the booking window when (i) high willingness to pay travellers are not booking and (ii) when STD is forecast to be busy yet 1ST departs nearly empty

Hope that helps!

Generally wrong for VTEC but that’s all I’m saying sorry

 

[Gareth Marston]

It should be noted that Cross Country's pricing strategy is generally they easiest to "beat".

 

[Iskra]

[Deleted]

 

[lyndhurst25]

Merseyrail:

Off-Peak pricing strategy: no off-peak fares, but we'll sell you a DaySaver, cynically priced at 10p less than the superior Merseyside PTE Saveaway equivalent (which also allows bus and ferry travel). Oh, and no railcard discounts allowed either.

Advance pricing strategy: what are they? You mean those tickets to places like London that people usually book online? We don't sell our own so we won't let you collect any that you've bought online from any of our stations. Tough luck.

 

[AY1975]

GWR & CrossCountry
1ST fares seem extremely expensive and frequently the lower range of the fares that are filed appear to have extremely limited availability, even early in the booking window when (i) high willingness to pay travellers are not booking and (ii) when STD is forecast to be busy yet 1ST departs nearly empty

It is noticeable that the cheapest First Advance fares on Virgin (both East and West Coast), CrossCountry and Great Western are usually at least twice, or even three times, as expensive as the cheapest Standard Class Advance fares for the same journey. By contrast, on East Midlands Trains (particularly on the St Pancras-Nottingham route) and on Greater Anglia's Liverpool Street-Norwich route, you can often get First Advance fares for only a few pounds more (sometimes as little as £2 more) than the cheapest Standard Advance fare for the same journey.

This would suggest that EMT and GA have more difficulty filling their empty First Class seats on off-peak trains than VTEC, VTWC, GWR and XC, so EMT and GA are keen to offer reasonably priced First Advance tickets (maybe because the shorter distances mean that fewer passengers think it worthwhile trading up to First Class), whereas VTEC, VTWC, GWR and XC have plenty of passengers willing to pay a premium to travel in greater comfort on long-distance journeys such as London to Cornwall or Scotland so they want to maximise the amount of revenue that they can raise from such passengers.

That said, even in Standard Class, on EMT's London-Sheffield route the cheapest Advance fares tend to be harder to get hold of than on VTEC (maybe because of the more limited seating capacity on the Class 222s than on the HSTs?). Because of that, when travelling between Sheffield and London I tend to prefer to go with VTEC (or occasionally Hull Trains or Grand Central) from Doncaster.