A blog by Suzanne Donnelly, Director of Passenger Revenue
1 September 2022
1.8 billion trips were made by more than 8 million people on our railways in the last full reporting year before the pandemic. That accounted for 9% of total distance travelled, with most other journeys made by car. From a ‘glass half full’ perspective, these figures go to show that there are many people and many journeys that rail could attract.
The ‘glass half empty’ point of view is that changes to the way people commute to work are now likely permanent: rail’s revenue recovery had steadily increased since the start of 2022 but has begun to flatline over the summer at around 81%.
Of these two views, I’m firmly in the glass-half-full camp, but I’m also a realist. Further recovery of rail passengers will need a simpler, better approach towards how we drive growth as an industry. In short, we must find ways to make rail more affordable and accessible to more people, so that they want to take the train more often.
I’ve worked in the rail industry for 17 years, most recently as commercial director for LNER. I led the Rail Revenue Recovery Group, set up in early 2021 to advise the Department for Transport on revenue recovery, and am now Director of Passenger Revenue at GBRTT – taking on the challenge of driving the railway forward commercially at a national level.
It’s my job to bring together commercial leaders and specialists – from operators, Network Rail, the Rail Delivery Group (RDG), the private sector and government – to share, learn and deliver solutions for growth, while ensuring revenue remains a hot topic for key decision makers and lever holders.
I oversee the cross-industry teams within GBRTT responsible for revenue forecasting and analysis, behavioural insights, marketing, brand and commercial strategy. And I’m also the lead sponsor for the £360m fares, ticketing and retail programme that will transform passengers’ experience of train travel, revolutionising fares, tickets and the way these are sold.
I’m confident that if, as an industry working together, we make the right interventions and have the right cross-industry commercial strategies, there is a bright future ahead for rail: a simpler, better railway that works for everyone in Britain.
At GBRTT, from a revenue growth perspective, our challenge is twofold: bringing the railway together to deliver commercial benefits now, while laying the foundations for Great British Railways to maximise revenue opportunities in the years ahead.
With that in mind, I’ve four key areas of focus right now:
Simpler, faster and more joined-up decision making
It’s no secret that rail needs to better understand its passengers. Taking joined-up decisions based upon robust customer insights will help us, as an industry, to make rail simpler, improve passenger trust and make travelling by train a more appealing choice for more people.
We’ve already begun taking commercial decisions linked to the more joined-up, industry-wide reporting and analysis we have at our fingertips. Looking ahead, that simpler, faster, and more joined-up approach will drive future brand development and national marketing initiatives. A clear and consistent national brand will add value, while supporting the whole industry towards greater growth, building trust and advocacy from the gateline to the freight depot.
As the industry lead for revenue growth, I’m making sure that we listen to different voices across the industry and beyond, in as many forums as possible and have established industry-wide working groups. The forthcoming National Marketing Strategy is an early example of the benefits of cross-industry working in this area.
Making revenue growth a railway priority
Everyone wants the railway to be around for future generations. For it to be a growing system that’s adaptable to modern hybrid working. That offers customers and taxpayers value for money, with a fair and easily understood approach towards ticketing. To create that simpler, better railway that passengers and freight users deserve we must make smart choices now, so that we can be more financially sustainable.
We’re working closely with senior officers within the Department for Transport and HM Treasury to get commercial decision making on the agenda at every level. And when I talk about commercial, I mean growth – not cost cutting on areas where we need to protect the customer base.
Getting initiatives to market
GBRTT, RDG and operators have a pipeline of customer growth ideas raring to go, nationally and locally. In the short term, our job is to accelerate the speed they can be brought to market through evaluating the opportunity versus risk and presenting this back to senior officers within government.
Looking further ahead, railway reform will bring revenue and cost much more closely together under Great British Railways – making us better placed to take strategic decisions on revenue informed by the desire for long-term growth.
The interim is not without its challenges. But we’ve had some early success together. This spring, the Great British Rail Sale brought 70,000 people back to rail that hadn’t travelled since before the pandemic. It led to 2m extra journeys and was net revenue generative – more income was gained overall than lost through the discounts offered. Two waves of the national Let’s Get Back on Track marketing campaign led to an upsurge in leisure travel – a market which has recovered to 119% of pre-pandemic levels. And the Book with Confidence scheme has given customers the ability to change their mind without paying a financial penalty.
Significantly, 85% of people aware of Book with Confidence said it was important in their decision to travel by train. The results emphasise the customer appetite for a simplified rail experience: more flexibility and different pricing options. While working together as an industry enables us to deliver better marketing: national, insight-led campaigns that complement local initiatives from operators.
We’re currently working in partnership with operators to ensure further upcoming national campaigns to drive awareness and interest are aligned with local operator-led marketing. And we’ll also be tapping more into rail environmental credentials, with sustainability increasingly important in travel decisions for businesses and customers.
Modernising how rail is bought and experienced
One of the biggest changes customers will see is a modernisation of fares, ticketing and retailing. In many ways, the confusing status quo is the opposite of what a simpler, better railway ought to look like.
In late 2021 GBRTT unlocked £360m of funding to deliver transformational changes to the way rail is paid for and experienced. Digital ticketing, London-style tap-in tap-out payments in urban centres around the country, a new single industry online retail channel and app, and a modernised in-station retailing experience are an opportunity to reset how rail delivers.
We talk about creating a simpler, better railway for everyone in Britain, and all our work is geared towards that goal. But the modernisation of fares and how tickets are sold is likely to be among the first and most impactful ways that customers experience what a simpler and better railway means for them.
Commercial interventions like those I’ve outlined are vital for the future of the rail network. Put simply, the industry needs more bums on seats, more often. There’s not a magic wand that can be waved to achieve that. It will be a marathon, rather than a sprint.
It’s essential though that we continue to take joined up decisions with our industry partners, based upon a thorough understanding of existing and potential customers. That’s the only way we can drive growth and deliver a simpler, better railway for everyone in Britain.