‘It’s possible to have a 25% growth out of India from now on’: Rail Europe Executive Chairman & CEO Björn Bender

Q: This is not your first visit to India. What are some of the changes that you see?

A: For one, I am not carrying a wallet, nor is there any cash in my pocket. I like travelling short distances by autorickshaw and about five years ago, all payment was made offline. Now, I see the [autorickshaw] drivers with smartphones, checking Instagram. Since I make all my bookings on Uber, I don’t pay 10 times the price, and the experience is very comfortable.

Q: Are most of your ticket bookings on Rail Europe done online today?

A: Yes, digital is a significant change for us. Before the pandemic, it was normal to see passengers with printouts. There is no concept of a [physical] ticket anymore. The more important piece is that our agents selling tickets don’t do it on a desktop but have moved to a cloud-based system.

Q: There’s no fear of losing your ticket?

A: You need to fear only if the phone’s battery runs out! Today, you can book your ticket at the train station, but 95% of people in Europe are buying it off our website or on their mobiles. In countries like Spain and France, reserving a seat is mandatory, and it was a challenge in the past. Doing that online today is a game changer. With one pass, you can move through 35 countries across Europe, giving you complete freedom.

This flexibility is what makes the whole process different. You can get a pass for three days or three months with unlimited travel. Now, the only additional thing is reserving the seat. The pass gives you access to all high-speed trains, ferries and some bus connections too. The objective is to make it simple for the traveller. The rail system in Europe is very complex since there are state-owned companies with their own tariffs. Plus, they don’t sell tickets of other carriers. For example, on the Madrid-Barcelona route, there are five high-speed carriers, and we are the aggregators. As more capacity is added, prices will decrease.

Q: So, it comes down to simplifying the travel experience?

A: We give you the pass. We are the broker, and the tech platform is our asset. On the supply side, there are 200 railway providers. Coming to the demand side, we serve the travel agencies (offline and online), and a vast consumer network. All this has to be done in the easiest possible manner.

The online travel agencies get our inventory and grow the market for us. In markets like Europe, bookings are done through an agent since people travel more frequently. Indians travel less but the duration is longer. Around 90% of them use online travel agencies and the other 10% use our website. We want to grow the business with the B2B guys. They give us access to the market and with one interface, they get the inventory as opposed to dealing with many carriers. This is a real-time process, and they look at the inventory the way we do. The way to do it is to grow together and it does not matter how the traveller makes a booking.

Each market is interesting. In the US, it is dominated by travel agencies and people physically meeting them. We have over 10,000 B2B partners there and in India and China, it is dominated by digital platforms. In Australia, two-thirds of travellers make their booking through travel agencies.

Q: What trends are you seeing specifically with reference to Indians travelling to Europe in, say, choice of destinations?

A: The market is continuously changing. In the past, Indians going to Europe would mean going to Switzerland. Maybe a lot of that has to do with films shot there influencing the decision. Beyond that, the preferred destinations would be London and Paris. The big change is a lot of Indians now are looking at the next set of destinations—it could be Vienna, Budapest, the Nordics, or Amsterdam—with the desire to discover new things. For instance, Indians going to Portugal is a reality and we must recognise that. There is a diverse set of travellers from India moving across Europe and that is fascinating. The learning that we pick up from India is invaluable to us.

The Swiss travel pass is still the No. 1 [product] on our list. There is also the London-Paris Eurostar journey that is very popular. Other aspects that Indians like are the ICE and high-speed trains plus the night trains as well. The Top 3 destinations have remained the same, but a beautiful city like Budapest could work very well as a destination for, say, those visiting Europe for the second time.. [they] are a lot more adventurous then.

There are a few other things. Group travel was always big and that is only getting bigger. That is a positive from our point of view since they are constantly looking for new things. Like I said earlier, travelling once gives them more confidence on how to deal with the system and suddenly the desire for newer destinations takes off. It is our job to keep pace with the new trends.

Q: How do you profile the traveller to make sure you make the right product offering?

A: There is a lot of data available, but we must be very careful with that part... Data privacy is a big issue across the world, and we constantly look to pick up interesting trends. That comes from different sources apart from our own market surveys. Many international consultants come out with comprehensive reports, and we also share a lot of information and data with tourism boards. That helps us to verify a lot of data and eventually make a better and more relevant offering to the traveller.

In general, today people are travelling a lot more but on shorter holidays, especially those [travellers] based in Europe. A lot of that has to do with Covid-19 or the ability to work remotely. That means we have people taking time out in the middle of the week. You can take a day off and carry your skiing equipment. In the middle of that, you can also work remotely. That was never the case in the past. That is a very useful insight for us and with what our own team can do on data analytics, it is possible to build on any of the nuggets.

Q: How critical is India as a market today for Rail Europe?

A: India was always in the Top 5 or Top 6. That has changed sharply and today it is the second largest after the US. That means, after the US, on a sales number basis for Rail Europe, we have the second largest number of people visiting Europe from India.

Our belief is that it is possible to have a growth of 25% out of India from now on. India has become the second-largest market [for us] at a time when many countries are struggling. This is a perfect starting point for India to grow even more. While the US is the largest, it is now followed by India and from thereon, it is South Korea, China and Australia. We were founded in the US 90 years ago and that makes the brand very strong there. From India’s point of view, the potential is huge, and we need to build on that.

We sold 5 million tickets last year—of that India was 0.5 million and the US was 1.5 million. Most of the rest came from Europe, the Asia-Pacific region, Australia and the Middle East. I just want to point out here that the Middle East has a small population but becomes very convenient because of very good air connectivity into Europe. It also translates to a huge advantage for India. Europe is a highly preferred destination after the US, Asia and the Middle East. We hope it remains that way for a long time. We are seeing a lot of interest from global travellers on wanting to visit Germany and the Benelux countries.

We customise our package depending on where the traveller comes from. Take the US, where they travel more often on shorter trips. Besides, if you live on the East Coast, getting to Europe does not involve too much flight time. For Indians, travelling to Europe is more family time and could be a holiday or a honeymoon. They tend to stay longer and discover more destinations.

Q: Europe’s rail network is vast and well-connected. But there are also many changes that are taking place to widen the user base…

A: Yes, there is a lot of work that is underway. In the past, not enough was invested and today sustainability has become a big issue. Now, train travel is becoming cool and ‘flight shaming’ is taking place. It is now accepted that trains are a good mode of transport but also calls for big investments from the European Union. Till 2030, just the EU will need to invest $100 billion on train infrastructure. It is a long-term project but will result in more capacity and create a better network.

The demand for train travel is always going to be there. It is supply that needs to be created and good infrastructure will be of great help. The Eurostar (a high-speed rail service in Western Europe) was introduced in the mid-1990s with the London-Paris route. The number of flights then on that stretch was more than 300. Today, we have more people travelling but the number of flights is down to 150. It only shows what takes place when you invest in infrastructure. The preferred mode of travel for the next many decades will be train. In France, there are no domestic flights today from Paris to Lyon, where train travel takes two and a half hours.

We do 5 million tickets today, but that number can really take off. We are at 75% of pre-Covid levels. The potential is huge, and it is all about growth. Tickets are only a part of it and once you add other elements of convenience, the addressable market starts to look much larger. 

@krishnagopalan