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SVR General Discussion

Discussion in 'Heritage Railways & Centres in the UK' started by threelinkdave, Aug 20, 2014.

  1. Andy2857

    Andy2857 Member

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    Planned motive power/stock is 7714 and carmine and cream MK1's.
     
  2. 61624

    61624 Part of the furniture

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    It is important when offering discounts that the railway is running harder to stand still if the reduction in income from the discount is not offset by higher visitor numbers. Similarly, the "travel once, get a return trip for free in return for signing a gift aid form" (as offered by some railways, with others hoping to)must bring with it a risk of overcrowding if there is a high rate of take up for the return visit, for limited benefit. I think that T & Cs would also have to be carefully written in this scenario to avoid people buying a cheap (part-line) ticket then claiming a more expensive one on their free visit. There's a potential minefield out there!
     
  3. Richard D

    Richard D New Member

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    Excellent. Many thanks. Was hoping for the pannier. So a spin to Highley it is and lunch at the Ship.
     
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  4. Pete Thornhill

    Pete Thornhill Resident of Nat Pres Staff Member Administrator Moderator Friend

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    It's 7714 (not sure where I saw that) if that helps but do agree that you would think there is something on at least SVR live for those who know but ideally the main site considering it starts tomorrow.
     
  5. Sidmouth

    Sidmouth Resident of Nat Pres Staff Member Moderator

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    an unfair criticism of the SVR who actually make a lot of information available

    https://www.svrlive.com/operations .
     
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  6. 80104

    80104 Member

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    Exactly. Secondary spend may have been factored into the decision making process but discounting can be a slippery slope to get on. Many leisure attractions find it very challenging to revert to "normal pricing" if they have offered lower / introductory / special offers. It resets in the minds of the buying public what they think the price of fare they should be paying is.
     
  7. Richard D

    Richard D New Member

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    I disagree. The information I wanted was not to be found hence needing to ask on here.
    I notice the info is now on SV live.
     
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  8. gwralatea

    gwralatea Member

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    Exactly, it's value destruction - 10 years of advising people professionally on this taught me to hammer it into clients that discounting needs to be extremely time limited, and forcefully communicated as such to the public. You can even get into trouble trying to run the same sort of offer two years running because people learn to wait for it.

    Basically permanent discounting means only a mug will pay full price. Because if full price was where your overheads and acceptable profit margin left you*, then you'd be mad to discount (in the mind of the customer).

    So if you *are* permanently discounting, you're telling your customer base that you're a profiteer who has been taking them for fools for years and you don't actually need anyone to pay full price.

    *and in my experience most of the public are fair minded and realise you've got to cover your costs and make a profit, otherwise you wouldn't trade for very long. I know you could trade revenue neutral, but a) it's very difficult to aim for so a profit is better, and b) the public don't get why anyone would.
     
  9. 35B

    35B Nat Pres stalwart

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    This consumer draws a distinction between discounting (e.g. price reductions, voucher offers) and added value promotions (e.g. BOGOF, combined entry schemes). The key point is that straight up discounting just makes things cheaper, whereas the added value promotions get me more for the same price I'd originally have paid. It's a subtle difference, and may add up to the same number, but makes a big difference to how I perceive the offer.
     
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  10. Cuckoo Line

    Cuckoo Line Member

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    Too much general discounting suggests your normal prices are too high. However discounting for online tickets for a specific day in the future guarantees I come and takes away the risk of deciding on the dates, perhaps we won't go anyway. If you can do dynamic discounting like the airlines and big railways with advanced fares then you can reduce the discount as spaces fill up.
     
  11. 80104

    80104 Member

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    Trading at revenue neutral / break even is virtually impossible and aiming at such a target is inherently dangerous because costs have an alarming habit of being more than planned / forecast. There is also the problem that many just take into account direct costs without considering any contribution towards indirect or overhead costs.

    As regards dynamic pricing the airlines and rail companies rely on "big data" and some very specialised software to manage this pricing policy. I fear that a heritage railway could quite easily get it wrong and cause more harm than good. Getting even a simple variable pricing model and message across will take some doing.
     
  12. gwralatea

    gwralatea Member

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    yes, 'difficult to aim for' was doing a lot of work!
     
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  13. Jamessquared

    Jamessquared Nat Pres stalwart

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    There's swirling questions around variable discounts ("airline pricing"), fixed itineraries etc.

    The point I'd make about variable pricing is that airlines are essentially selling one journey: get from A to B (and presumably back again). So you know how many seats you have, and can optimise your pricing model so as to extract the most available income to just fill those seats and no more.

    That model could work for some longer lines that are probably trading at least partially on scenery; and where the most common journey is a simple full line return. So it might work for the Ffestiniog; even more so for the Welsh Highland; NYMR, WSR etc. Would also work for mainline rail tours, where only one trip is on offer.

    But for a line with multiple stations, and where part of the attraction is stopping at stations to see what is there, you have to accept you will have some empty seats some of the time. Say someone gets the first train out of Kidderminster to Bridgnorth; then returns and aims to break their journey at Arley. If your first train out of Kidderminster was full, by time it gets back it will have some empty seats (those that got out at Arley etc). And to get those people back, you must have had a train depart Kidderminster part empty so there are some seats available to pick them up.

    The more your model assumes your intermediate stations are part of the attraction, the less you can operate prices to extract the maximum revenue per train with clever pricing models.

    I'm increasingly thinking that particularly for lines with several intermediate stations where they form part of the attraction, then a per-train operating cost vs revenue model is perhaps less useful than a per day model. In other words, less "the 10:40am will cost £2,500 for a round trip and we need to sell at least 100 full price tickets for that service" and more "a day with 5 departures from each end will cost £12,000 and we need to get 500 people through the door", even accepting that will involve hauling a reasonable number of empty seats. Not least because "if we have 500 passengers we can get away with only two departures" - well, up to a point but not if the severely reduced service means there isn't enough of a "show" or amenity value of travel options to make it attractive to a substantial cohort of passengers who want to do more than just go once up and down.

    Tom
     
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  14. 80104

    80104 Member

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    Airline pricing models are incredibly sophisticated behind the scenes. They offer different fares with different levels of flexibility. They also reflect competing airline prices bearing in mind that whilst many consumers have a preferred airport and / or carrier they will purchase based on their view of different fares from different airports from different airlines. I do not think such a model is either appropriate or would work on heritage railways.

    What would be worth investigating is whether different fare levels could apply on different days and whether this would increase the overall fare take (as that is the goal of pricing models). Effectively as Tom has noted if you operate for example 2 round trips per day your variable costs are x but if you operate 5 round trips per day then your variable costs are some multiple of x. IMHO heritage railways need a per day cost for each of their timetable variants and should consider whether they need to have fares that match that ie orange tt = orange prices, yellow tt = yellow prices.

    Factor in elasticity of demand based on fares then counter intuitively cheaper fares on high service level days may be more appropriate (and give greater max revenue) whilst keeping higher fare levels on low service level days as demand is less elastic. Offering kids go free during the summer holidays only could be an example of this (and is less obvious to consumers than the more open £20 adult return low season, £25 adult return high season).
     
  15. Cuckoo Line

    Cuckoo Line Member

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    And that then leaves the quandary on SVR if we want now to do a Steam return, which is what we wanted to do, from Bridgnorth (where we will be on the day), there is no opportunity to stop off on the way as there is only one return during the day.
     
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  16. green five

    green five Resident of Nat Pres

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    Taw Valley has emerged in her new livery:


    Sent from my XQ-BT52 using Tapatalk
     
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  17. 80104

    80104 Member

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    Which illustrates that longer lines have the disadvantage that offering a choice of departures (to allow customers to spend time at the destination or en route) invariably means operating significantly more mileage (and incurring more cost) than say a shorter line in achieving the same objective. The relative fares offered by long and short lines do not seem to me to reflect the difference in direct operating costs.
     
  18. Spamcan81

    Spamcan81 Nat Pres stalwart

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    A good day out at the SVR is a trip from Kidderminster to Bridgnorth, a couple of ales, train to Highley, a visit to the Engine House and the last train back to Kidderminster. In the past this has been either all steam or just one leg by diesel. The new timetable does not appeal at all as there is not enough steam for my liking.
     
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  19. mdewell

    mdewell Well-Known Member Friend

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    When we did a survey of the HRA Privilege (InterRail as it was known then) in 2018, we found that 54% of people using the discount card would not have visited without it. We also found that secondary spend averaged £13 per visitor using the Privilege Cards.
     
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  20. Dead Sheep

    Dead Sheep Member

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    Quite. Applying yield management to heritage railways would be inappropriate and something akin to living in a fantasy land.

    Imagine a family of four attempting to purchase walk on fares during a very busy weekend, only to be greeted with, "that will be £220 please ". The current fixed rate fares are already expensive and the railway can't assume inelasticity in demand. Peak yield fares would simply provide reputational damage.
     
    Last edited: Mar 5, 2023
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