Building for Customers
Florida High Speed Rail
MARKETING PLAN
Phase 1
Tampa-Orlando
October 2003
Contents
Introduction
1
1
A High Speed Rail Vision for Florida
2
2
The Market
3
3
Opportunities & Challenges (SWOT Analysis)
9
4
Service
10
5
Segments and target market
11
6
Pricing
12
7
Marketing Objectives
13
8
Key Strategies
14
9
Tactics & Execution
18
Budget Envelope & Master Schedule
21
10
i
Introduction
An innovative approach
to building a value-added
customer experience for
Floridians and their
guests
Success of the Tampa-Orlando High Speed Rail link will be the result of more
than the equipment, stations and route alignments. Realizing the full benefit of
this popular travel mode also requires a strategic offering that will optimize the
satisfaction of the customers who use it. This plan maps an innovative approach
to building a value-added customer experience for Floridians and their guests.
An important characteristic of rail transportation is the experiential nature of the
service. This drives the need for strategy and policy at the management level
to support specific practices and activities at the detailed service delivery level
that directly impacts the customer experience. Travel can be viewed as an
extension of the customer’s experience at the intended destination. Both the
travel experience and the destination experience have a significant reciprocal
influence on the customer experience and satisfaction.
Research has shown that customers' evaluation of transportation services and
their decision to patronize them depend equally on what services are provided
and on how the operators deliver on various aspects of the trip experience being
purchased. That is, the organization and operation of the staff, the information
systems, the facility configuration, the station and train environments, and other
resources are part of the product the customer is purchasing and are important
to satisfaction and repeat patronage.
Customers with bad service experiences will tell 11 people and those with
favorable ones tell just 6 people. In other words, a company’s reputation suffers
twice the impact of its failures as opposed to its successes. Positive customer
experiences will be critical particularly at start-up for the Florida High Speed
Rail project, as there will be a high degree of public and media focus on this
high profile initiative and first impressions are difficult to change. The need
to deliver service excellence is further driven by the high standards and customer expectations set by Disney and the Orlando International Airport.
Standards by which Florida High Speed Rail will be judged by customers will
be likely set by their experience with these two organizations.
The following are core principles upon which the marketing strategy for Florida
High Speed Rail has been developed:
• The travel experience begins while the customer is still at home and is impacted
by each contact point, including his/her trip on Florida High Speed Rail Service
• Employees are extremely important - key to successful implementation of the
desired practices and key to improving levels of customer satisfaction
• Practices must be supported by policy and infrastructure
• Senior level commitment to the practices is a major component in assuring
sucessful implementation
• Systematic approach to monitoring results is fundamental
• Execution and attention to detail are keys to success
1
The Fluor-Bombardier Marketing Plan outlines a clear road map to meet these
principles and delivers the final critical component in the start-up of a successful Phase 1 High Speed Rail link.
The state population is
expected to double over
the next 25 years
Florida High Speed Rail Program, Phase 1, Part 1
1 A High Speed Rail Vision for Florida
Demands on the existing transportation infrastructure and network for the
movement of both people and goods in the state of Florida have increased
dramatically in the past decade. Current levels of congestion on the highway
system is calculated to cost each state resident $620 annually in wasted time and
fuel and a total of 4.5 billion hours in lost time that could otherwise be applied
to more productive use. And the problem can only get worse with the state
population expected to double over the next 25 years.
In the year 2000, voters in the state of Florida expressed their vision of future
transportation by approving a constitutional amendment mandating the development of a statewide high-speed passenger rail network that would link the
state's major population centers.
In October 2002, the state invited interested parties to submit proposals for the
design, construction and operation of the first proposed phase of the High Speed Rail
network, linking the cities of Orlando and Tampa Bay. Fluor and Bombardier, two
substantive private corporations with significant combined experience and capabilities
in the areas of finance, design, construction, supply, installation, operations and
maintenance of high-speed rail networks, joined forces to present a solution that
provides the best value and overall solution for the state of Florida and its residents.
The Fluor-Bombardier partnership, operating as Florida High Speed Project
Holdings Company, is committed to making Floridians' vision of their transportation future a reality by delivering an economic, self-sustaining solution
comprised of the following elements:
FLUOR is a registred service mark of Fluor Corporation
2
• Bombardier* JetTrain* high-speed rail technology - a made in America
state of the art, high-speed train set
• A project management approach that coordinates and integrates the
design, construction, operations and maintenance of the systems civil
and systems assets
A business,
entertainment
and tourism hub
• A management plan that facilitates a smooth transition from asset
development to asset management – from build to operate
• An operations and maintenance plan tailored to the highest system
safety and reliability
• A marketing strategy and plan that ensures that the needs of project
stakeholders and future customers are appropriately addressed, thus
maximizing ridership potential and return on investment,
while fulfilling the desired reductions in traffic and congestion.
2 The Market
2.1 Size, Growth Rates and Projected Ridership
Spread over an area of 66 square miles, Orlando is the biggest city in central
Florida. A business, entertainment and tourism hub, Orlando is just 4 miles from
Universal Studios and 20 miles from Walt Disney World. Disney’s presence, of
course, is the primary reason behind the fact that Orlando is the fifth-ranking
US destination for overseas travelers.
Tampa Bay, located on the east cost of Florida, enjoys an unusually strong and
robust economy in comparison to the general US economic doldrums. Recently
described as "Wall Street South", the "quality of life" is often cited as one of the
factors that have attracted a growing number of businesses to locate in the
region.
The population of Metro Orlando, encompassing Orange, Seminole, Lakeland
and Osceola Counties was estimated at 1.4 million in 2000, projected to grow
to 1.6 million by 2005 and to 2.2 million by 2025. The Tampa Bay region was
home to an estimated 3.4 million residents in 2000, with approximately 2.2 million located in Hillsborough, Pasco and Pinellas counties. Polk County's population was estimated at 433,000 in 2000.
Tampa Bay, Polk County and Orlando are the three metropolitan areas that will
host the first proposed phase of the Florida High Speed Rail program. The ridership study commissioned by the Florida High Speed Rail Authority indicated
that total corridor population is forecast to increase 33 percent from 2002 to
2025. The Orlando region (Orange, Seminole and Osceola Counties) population
is expected to increase by 46 percent over this same period.
The Tampa Bay Region (Hillsborough, Pasco and Pinellas Counties) population
is forecasted to increase by 23 percent and Polk County by 38 percent.
* Trademark(s) of Bombardier Inc. or its subsidiaries
3
Employment in the corridor is expected to increase by 46 percent by year 2025.
The Orlando and Lakeland regions will increase by about 57 percent, the Tampa
Bay Region by about 37 percent.
Employment in the
corridor is expected to
increase by 46 percent
Overall, the number of hotel rooms is estimated to increase by about 83 percent
between 2002 and 2025. The highest rate of increase is expected in the Orlando
Region (about 100 percent). Tampa Bay Region hotel rooms are expected to
increase about 46 percent and Polk County rooms by about 22 percent.
The Authority's ridership study estimated annual ridership within the corridor
between Tampa, Lakeland and Orlando by both local residents and visitors
(Greeneway alignment) in 2010 to range from 1,657,000 - 1,904,000 generating
revenues of $27.9 to $29.7 million. This is anticipated to grow to ridership of
2,450,000 - 2,844,000 and revenues of $41.6 - $44.5 million by 2025.
The Orlando market includes a large segment of ‘captive’ customers. These are
customers who purchase ‘bundled’ transportation and/or accommodation packages. In this case the choice of mode is not made by the traveler but is instead
made by the transportation providers and attractions that contract for the services.
Major purchasers of service in the region include: Disney, Major Hotel properties
and the Convention Center.
Ridership and Revenue Forecasts
MARKET SIZE
(Thousands)
AECOM
WSA
Intercity Market
Tampa – Orlando
BEELINE ALIGNMENT
Ridership
(Thousands)
AECOM WSA
Revenue
(Millions)
AECOM WSA
GREENEWAY ALIGNMENT
Ridership
(Thousands)
AECOM WSA
Revenue
(Millions)
AECOM WSA
1
4,400
4,504
582
453
$14.7
$11.4
484
377
$12.1
$9.3
Tampa – Lakeland
3,430
3,427
339
326
$3.9
$3.7
341
326
$3.9
$3.7
Lakeland – Orlando
Subtotal 2
2,780
10,610
3,022
10,953
275
1,196
285
1,064
$4.7
$23.3
$4.8
$19.8
226
1,051
231
934
$3.8
$19.9
$3.9
$16.9
1,604
3,207
464
5,275
210
462
66
738
266
851
93
1,210
$2.5
$5.6
$1.6
$9.6
$3.2
$10.2
$2.2
$15.6
N/A
537
69
606
N/A
873
97
970
N/A
$6.5
$1.6
$8.1
N/A
$10.5
$2.3
$12.8
16,228
1,934
2,274
$32.9
$35.4
1,657
1,904
$27.9
$29.7
530
530
$6.4
$6.4
2190
2190
$26.3
$26.3
3,847
4,094
$54.2
$56.0
Airport Access (Choice Market)
OIA – Intl. Drive
1,610
OIA – Disney
2,950
OIA – T. Bay & Lakeland 450
Subtotal
5,010
TOTAL
15,620
Airport Access (Captive Market) 3
Ridership Revenue
(Thousands) (Millions)
OIA – Intl. Drive
530
$6.4
OIA - Disney
2,190
$26.3
TOTAL
2,720
$32.6 4
Grand Total
2,464 2,804
$39.3
$41.8
Source Ridership Study EXHIBIT 7-1: 2010 Annual Ridership and Ticket Revenue Forecasts by Market
1
2
3
4
4
Candidate market does not include areas outside of the service area or sub markets not likely to divert traffic to HSR.
Intercity market regular commuters using prepaid discount fares includes
Captive market from the International Drive area and Disney are estimated based on survey data
Revenues are expressed in 2002 dollars
2.2 Current Travel Options
2.2.1 Air
Orlando International
Airport is a major
port of entry for
international visitors in
the continental
United States
Orlando International Airport served approximately 25 million domestic and
1.7 million international passengers in 2002. It is ranked 15th largest airport in
the US; 24th in the world. Its focus on customer service has earned it a first
place ranking in Customer Satisfaction amongst US airports and it is also
ranked the world’s 4th most convenient airport. There are more than 450 flight
arrivals and 450 departures daily, with scheduled non-stop service available to
68 domestic and 25 international destinations. It is a major port of entry for
international visitors in the continental United States.
At the time of the Florida High Speed Rail Authority’s ridership study, air travel
between the Tampa and Orlando markets was limited to one flight per day, with
mid-morning departure from Tampa and an early evening return from Orlando.
FAA records indicate that there were an estimated 20,000 person trips (oneway) in the year prior to September 11, 2001. Of these trips, 16,000 were for
connections to other flights, while 4,000 represented true origin to destination
travel between the two markets.
Airfare Tampa-Orlando
expedia.com search results
Adult
Child
One Way
$177
N/A
Return
$274
N/A
2.2.2 Road Network – Personal Vehicles
Metro Orlando is served by a well-developed road network. Florida’s Turnpike
and Interstate 4 bisect in Metro Orlando and other major state roadways include
U.S. 441, 17/92, 27 and 192. Toll roads include State Road 528, State Road 408
and State Road 417, a 100-mile beltway encircling Metro Orlando. The 12.5-mile
Osceola Parkway links the international airport to major attractions and six
regional arterial highways.
Department of Transportation traffic counts reveal that intercity travel between
the Tampa and Orlando markets was approximately 69,200 vehicles in 2000 and
is forecasted to grow to 74,000 by the year 2010.
2.2.3 Private Operators
There are more than 40 private operators that cater specifically to the tourist
market, moving visitors between the airport, local hotels and area attractions by
bus and van. The largest of these is Mears, who is also the current operator of
the Disney bus system.
5
2003 Mears Tariff to Orlando International Airport
Zone 1
The current ground transportation offering
includes taxis, towncars,
limousine services
and buses
Zone 2
Zone 3
Zone 4
Zone 5
ORLANDO INT'L DOWNTOWN,
AIRPORT HOTELS S. ORLANDO
INTERNATIONAL LAKE BUENA
VISTA, WALT
DRIVE
DISNEY WORLD
HWY. 192 W.
KISSIMMEE, E.S.
27 & 1-4. HWY.
192 east of S.R.
535 WINTER PARK,
MAITLAND
Adult One Way
$ 9.00
$14.00
$14.00
$16.00
$22.00
Adult Round Trip
$14.00
$24.00
$24.00
$28.00
$40.00
Child One Way
$ 6.00
$10.00
$10.00
$12.00
$18.00
Child Round Trip
$10.00
$17.00
$17.00
$20.00
$31.00
Mears also markets a SuperPass product that further bundles airport transfers
with unlimited transfers between Disney attractions in Mears zones 3 and 4.
Other representative transportation providers include Murray Hill
Transportation Group, Prestige TownCar and AccessLine Transportation.
2003 Mears SuperPass
3 Nights
4 Nights
5 Nights
6 Nights
7 Nights
Adult
$59.00
$70.00
$81.00
$92.00
$103.00
Child
$52.00
$63.00
$74.00
$85.00
$96.00
Additional Nights available at $11.00
Murray Hill Transportation Group
From Orlando Int'l Airport
One Way
Round trip
Magic Kingdom Resorts & Kissimmee 192
$50.00
$90.00
Animal Kingdom & All-Star Resorts
$50.00
$90.00
All Other Disney Resorts
$45.00
$80.00
Universal Studios
$45.00
$80.00
Downtown Orlando
$45.00
$80.00
International Drive
$40.00
$75.00
Prestige TownCar
Orlando International Airport
Transfer Rates
Prestige TownCar
Round Trip
Compare to Others
Round Trip
Hotels & Resorts
Family of 5
Shuttle or Bus
Per Person
Taxi
$90.00
International Drive / Convention Center Area
$80.00*
$28.00
International Drive / Convention Center Area
$80.00*
$25.00
$65.00
Lake Buena Vista
$80.00*
$28.00
$80.00
Hwy 192 Area
$80.00*
$28.00
$90.00
* After $5 Off Coupon for Internet Reservations
AccessLine Transportation
To
One Way
Round trip
UCF Hotels
$40.00
$75.00
Downtown Orlando
International Drive Hotels
$40.00
$75.00
$35.00
$65.00
Universal Studios Hotels
$40.00
$75.00
Lake Buena Vista Hotels
$45.00
$75.00
Disney Resorts
$45.00
$75.00
Maingate Area Hotel - Hwy 192
$45.00
$80.00
Additional Passenger
$ 5.00
$10.00
Up to 4 Passengers. Includes meet and greet at the baggage claim and road tolls.
6
2.2.4 Public Transit
The public transit agency, Lynx, serves Orange, Seminole and Osceola counties.
Lynx offers an extensive public transportation system recognized for its innovation in service design and delivery. In addition to conventional services the
Lynx ‘Lymmo’ is a branded bus service that operates on a three-mile dedicatedlane system in downtown Orlando. Lymmo service is available free-of-charge
to customers.
High Speed Rail will draw
from the auto trip
market, particularly for
intercity trips
2.3 Competitive Analysis
Metro Orlando is served by a range of transportation options. Visitors traveling
to and from Orlando can do so via the extensive highway network that connects
it to all major metropolitan centers. Air travel is accommodated by a choice of
domestic and international carriers, operating out of Orlando International and
several other airports. Local travel options include both public and private transit service operators (Disney’s manages its own transit fleet), shuttle and taxi
services, and personal automobiles.
The availability of High Speed Rail Service in the marketplace can be seen as
both a source of competition and complimentary to existing transportation
options. High Speed Rail poses no direct competition to international or interstate
air travel, but will compete directly with air travel in the common markets that it
serves. Air travel may provide faster flight plan times, but once airport access,
check-in, security and baggage claim wait times are factored in, the total travel
time by rail is very competitive. For example gate-to-gate travel time between
Tampa and Orlando is approximately 45 minutes. An additional hour and 20 minutes needs to be factored in to arrive at total air trip travel time for direct flights.
At the current service level – one non-stop flight per day- air service does not
pose a significant threat to High Speed Rail, nor does it constitute a significant
source of potential new riders.
High Speed Rail will draw from the auto trip market, particularly for intercity
trips. The Florida High Speed Rail Ridership Study team estimated the uncongested travel time between the Tampa and Orlando markets (Downtown Tampa
to Orlando International Airport) in 2000 to be 82 minutes increasing to 91 minutes during peak periods. Travel time during these periods is projected to
increase to 84 and 99 minutes by 2025.
Rail travel times of approximately one hour are very competitive with private
vehicles and transit alternatives even when transfers are factored in. Travel by
rail also allows customers to take advantage of amenities and facilities and
make more productive use of their travel time.
2.4 Economic Environment
The dominant feature of the economic landscape is tourism. Metro Orlando is
home to many popular tourist attractions, including Walt Disney World, DisneyMGM Studios, Epcot, Disney's Animal Kingdom, Universal Studios Florida,
Universal Studios Islands of Adventure, and Sea World of Orlando.
7
The region hosted more than 39.12 million U.S. visitors and 2.86 million of
overseas visitors in 1999 and enjoyed an estimated 23 million overnight tourist
visitors in 2002, which is projected to grow to 27 million by 2005. Metro
Orlando has approximately 107,000 hotel rooms - the second largest concentration of hotel rooms in the U.S. In addition to hosting a significant number of
vacationers, the hotels also benefit from a robust convention and trade show
market. The Orlando/Orange County Trade and Convention Center, the
nation’s second largest meeting facility, houses more than 2.1 million feet of
exhibit and meeting space and more than 3.6 million people are estimated to
have attended meetings and trade shows in 2001.
The development of the
High Speed Rail system in
the market will help fuel
economic growth
The region has enjoyed relatively healthy economic and employment growth.
While this is fuelled in large part by the tourism sector, the region is also home to
a number of high tech, aerospace and manufacturing businesses, the University of
Central Florida and other post-secondary institutions. Regional employment
stood at 857,000 in 2002 and is projected to grow to 928,000 by 2005.
Disney is the region’s largest private-sector employer (53,000) followed by
Florida Hospital (12,808) and Universal Orlando and Orlando Healthcare
(12,000 each). The largest public sector employer is the Orange County Public
School system (25,000), followed by the State of Florida.
The development of the High Speed Rail system in the market will help fuel
economic growth. The economic benefits of High Speed Rail to Florida have
been documented in several recent studies. For the period corresponding to the
capital program for the Beeline Alternative the following economic benefits are
generated for Florida businesses and residents.
• $2.5 billion in business sales
• $813 million in employment earnings
• 6,790 jobs during the five-year construction phase
For the 30 year analysis period for continuing operations the benefits are:
• $4.8 billion in business sales
• $1.7 billion in employment earnings
• 1,230 permanent jobs over 30 years operations and maintenance
For the period corresponding to construction activities near station sites, the
economic impacts for the state of Florida are estimated as:
• $1.2 billion in business sales
• $375 million in employment earnings
• 2,780 jobs over a five-year period of phased development
The estimated impacts for the capital program, operations and maintenance, and
construction activities in proximity to stations are additive. Thus the total
impact results in $2.9 billion in employment earnings in year-of-expenditure
8
(current) dollars. Sales among Florida firms total $8.5 billion in year–of-expenditure (current) dollars. These impacts result from the direct expenditures to
implement and operate the proposed service and other impacts that occur as
high quality rail service draws economic activity to the corridor and higher
valued land use results from development and redevelopment activities.
Estimated economic
impacts - $2.9 billion in
employment, $8.5 billion
in sales by Florida firms
3 Opportunities & Challenges (SWOT Analysis)
3.1 Strengths
• Speed
• Frequency
• Travel Time (direct access)
• Convenience
• High levels of customer service and access to amenities
• Traditional allure of passenger rail services
• High level of public support
3.2 Weaknesses
• Fixed link system
• Perception of cost, particularly relative to automobile use
• Dependency on other services for trip integration
• Need for passenger transfers
3.3 Threats
• Ridership impact of Disney decision to maintain its own transit services
between the airport and resorts
• Limited political support
3.4 Opportunities
• Development of partnership and alliances with other transportation
service providers, resorts and attractions and the travel industry to
deliver a seamless, integrated customer travel experience
• Unique Florida brand
• Opportunity to showcase emerging technologies and ‘last mile’ service
delivery alternatives
9
4 Service
4.1 Service Description
The US Federal Railroad
Administration selected
Bombardier to develop a
non-electric, high-speed
locomotive specifically
for the American market
The Tampa-Orlando High Speed Rail link will feature Bombardier JetTrain
technology. JetTrain technology is the product of a joint development partnership with the US Federal Railroad Administration (FRA). The FRA selected
Bombardier to work with them in a public/private partnership to develop a nonelectric, high-speed locomotive specifically for the North American marketplace. A key objective was to develop a meaningful alternative to the unsightly
and often cost-prohibitive practice of electrification of railroad right-of-ways.
The highly successful outcome of this initiative was a jet-engine powered locomotive capable of sustained operating speeds of 150 mph. This uniquely
American solution has it all - sustained high speed and rapid acceleration with
noise levels at trackside less than or equal to electric powered systems. All passenger cars and services are fully ADA compliant. Bombardier JetTrain technology is designed for America, made in America, and already certified to US
safety and ADA standards.
Speed: This system will be capable of operating on an unconstrained alignment
at speeds in excess of 120 mph, meeting the requirements of Florida’s constitutional amendment. The Tampa-Orlando High Speed Rail Service will achieve
an operating speed of 125 mph using Bombardier’s JetTrain technology.
Safety Standards: The interlocking controller and the ATP system will provide
fail-safe measures for the signaling and control equipment. The interlocking
controller incorporates dual-channel redundant system architecture to assure
reliability of critical safety systems. Infrastructure safety measures include
provision of vehicle barriers, as appropriate, along the guideway and roadway,
providing safety to motor vehicle traffic. Passenger safety measures at stations
will include railing and gating to promote safe movement in the vicinity of the
station and on the train platform. The Tampa-Orlando High Speed Rail Service
will meet all federal safety standards in design, construction, operation, and
maintenance phases.
Bombardier JetTrain
is the only FRA Tier II
compliant high-speed
rail technology
in the world
Performance Standard: The major performance features include:
• Opening service with 14 daily round trips between Tampa and Orlando
International Airport and not less than 8 shuttle roundtrips per day,
exceeding the required minimum of 12 daily round trips
• A technology and train configuration (consist) that accommodates 288
exceeding the required minimum passenger capacity of 250 passengers per consist
• Service hours from 6 a.m. until 11 p.m.
• A consideration for increased service above minimum levels in order to
optimize ridership and revenue
10
Station Locations: Stations are planned for Tampa, Lakeland, Disney, Orlando
and the Convention center [subject to final alignment choice]. Table below
identifies the station locations for each alternative alignment and also shows the
trip times as determined by Train Performance Calculator (TPC) analysis.
High Speed Rail will serve
the needs of distinct
customer groups
For a trip from Tampa to Orlando, with a one minute station stop at intermediate stations, Train Performance Calculator analysis determines a trip time of 58
minutes from Tampa to Orlando International Airport via the Greeneway corridor (Designated Alignment C) and 63 minutes via the Beeline corridor
(Designated Alignment D). The Tampa-Orlando High Speed Rail Service proposed technology and Operating Plan will deliver a system travel time that is
less than the Authority’s requirement for a 1-hour 10-minute maximum travel
time between Tampa and Orlando International Airport, including stops.
Train Performance Calculator Analysis of Trip Times
Station to Station
Trip Time (min)
Tampa to Lakeland
20.0
Lakeland to Disney area
Disney area to Orlando International Airport (Designated Alignment C)
22.6
Disney area to Convention Center (Designated Alignment D)
13.8
6.9
Convention Center to Orlando International Airport (Designated Alignment D)
10.5
Total TPC Trip Time (Alignment C)
58.4
Total TPC Trip Time (Alignment D)
63.0
5 Segments and target markets
High Speed Rail will serve the needs of several distinct customer groups including
intercity travelers, commuters, tourists, business travelers, groups and air travelers,
amongst others.
5.1 Intercity
The Authority's ridership study revealed that the intercity travel market, which
comprises of trips made within the proposed corridor between the Tampa,
Orlando and Lakeland centers would represent over 60 percent of anticipated
ridership, with the connection between Tampa and Orlando accounting for
about 30 percent. This market comprises a mix of local residents and visitors,
traveling for a variety of purposes including work commuting, business travel
and vacation/recreation and personal business.
5.2 Airport Access
The other significant market opportunity for High Speed Rail lies in trips made to/from
the Orlando International Airport by air passengers traveling to destinations outside of
the rail corridor. A large proportion of these trips are expected to be generated by the
Disney properties and the other attractions in the International Drive area. A significant
demographic feature of this segment is the number of children and families.
11
While the frequency of rail service delivered to these individual markets will
not be differentiated, given their unique travel, information and other needs and
varying degrees of price sensitivity, elements of the High Speed Rail marketing
mix such as fares, fare distribution channels, information, connecting transportation services etc. will have to be tailored for each of the segments.
Key determinants of the
High Speed Rail fare
structure are revenue
optimization and the
distinct characteristics of
the market segments
5.2.1 Choice
The Airport access market can be further divided into Choice and Captive customers. Choice customers are those travelers who are currently making their
own choice of mode of travel to and from the airport. This segment is estimated
at approximately 5 million travelers with an average of plus or minus 2 million
customers expected to use either the Beeline or Greeneway alignments.
5.2.2 Captive
The actual values of these markets are dependent on negotiations with entities
and providers currently providing this service. If agreement can be reached with
International Drive entities allowing the HSR operator access to all their captive markets, ridership on the Beeline alternative will increase to between 2.5
and 2.8 million riders generating total annual revenues of $39 to $42 million. If
agreement can be reached with Disney allowing the High Speed Rail operator
to access all their captive markets, the total potential ridership on the
Greeneway alternative would increase to between 3.8 and 4.1 million riders
generating total annual revenues of $54 to $56 million.
6 Pricing
6.1 Pricing
The proposed full fare of $46.40 for service between downtown Tampa and the
Orlando International Airport was developed based on elasticity analysis and
market pricing theory. The speed and amenity offering of the High Speed Rail
Service easily supports this fare level for the Choice market. Comparable air
travel between Tampa Bay and Orlando, depending on airline restrictions and
policies, ranges from $145 to $270, inclusive of all taxes and fees. For travel
by automobile, the Florida High Speed Rail Authority's ridership study estimated a cost of $0.36 per mile for business travelers. This makes the comparable cost of traveling the 84 miles between Tampa and the Orlando International
Airport by automobile roughly at $30.
6.2 Fare structure
Key determinants of the High Speed Rail fare structure are revenue optimization and the distinct characteristics of the market segments. Fare Sensitivity
Analysis shows that Choice customer fare revenues are optimized at rates of
60 percent higher than the base level fares used in the Authority’s Investment
Grade Ridership Study.
12
The commuter fares provide a significant discount over the full fare. The commuter fare represents the average per-trip cost of a weekly or monthly pass and
compares favorably with the Florida Department of Transportation estimate of
$17.50 for travel by conventional rail, based on Amtrak's fare calculation
formula of a $9 fixed rate plus $0.108 per mile between the two markets. The
commuter fare will be available only to authorized local residents.
A technology plan will be
prepared for the system
that will optimize
integration
For the Captive market, Orlando International Airport to Disney, a net $12 fare
is anticipated.
High Speed Rail Fare Matrix – Choice Customers
Station Pairs
Full Fare
Commuter Fare
Tampa-Lakeland
$24.00
$ 8.40
Tampa — Disney Area
$40.00
$14.00
Tampa — I Drive
$43.20
$15.20
Tampa - OIA
Lakeland — Disney Area
$46.40
$16.40
$28.80
$10.00
Lakeland — I Drive
$32.00
Lakeland - OIA
$35.20
$11.20
$12.40
Disney Area — I Drive
$16.00
$ 5.60
Disney Area - OIA
$19.20
$ 6.80
I Drive — OIA
$19.20
$ 6.80
6.3 Fare distribution
The nature of the Tampa-Orlando market mandates the need for a multi-channel
distribution system for ticket sales including pre-sales, packaging, on-line services,
in-property sales and station ticket vending machines. The establishment of a
robust on-line reservation and purchase system will allow access to ticket sales for
both individuals and agents. A technology plan will be prepared for the system that
will optimize integration with existing legacy systems of attractions and operators
in the region and provide maximum flexibility. The choice of fare technology will
also permit the authorization of local vs. guest travelers – and permit differential
tariff structures. Consideration may be given to designing a system of reciprocal
ticketing privileges with one or more transportation operators including airlines,
major attractions, the local transit authority, Amtrak and private operators.
7 Marketing Objectives
1. To support the achievement of ridership and revenue targets
2. To establish a strong brand for the Tampa-Orlando High Speed Rail Service
3. To deliver a customer centric service design and operating environment
that will achieve consistent customer satisfaction ratings in the high 90’s
4. To differentiate between the customer segments to be served in this market
5. To optimize the number and diversity of partnership arrangements with
regional attractions, transportation providers and business enterprises
6. To identify and exploit non-fare revenue opportunities
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8 Key Strategies
8.1 Branding & Positioning
Champ Car driver
Mika Salo welcomes the
Bombardier JetTrain
Florida 2003 Tour
Bombardier JetTrain clearly demonstrated the value of branding at the highly
successful launch of the new technology in Washington DC in October 2002.
Further evidence of the power and momentum that can be created around a
strong brand was seen during the Florida JetTrain 2003 Tour. Building on an
alliance with PK Racing Cart Champion Mika Salo, a series of media events
were staged in Miami, Orlando and Tampa, following Mika’s podium finish at
the Grand Prix Americas in Miami on September 28, 2003.
Drawing on market research and best practices a unique brand will be developed for the Florida High Speed Rail Service. The new brand will leverage the
appeal of High Speed Rail Service, showcase the Florida offering and salute the
vision of the people of Florida in entering this new era of transportation.
8.2 Customer Centric Service Design
One of the key strategies to ensuring project success will be a customer-first
focus. This will be enabled primarily through the detailed analysis of customer
contact points. In order to better understand the distinct needs of different customer segments, it is useful to closely examine the anatomy of a trip by highspeed rail. This is completed from a customer’s perspective through the development of a Transaction Chain - an inventory of all the potential contact points
between customers and the service.
Each of these customer contact points is then examined from four distinct perspectives, summarized as follows:
Understand the customers’ needs at the contact point
Design the service and experience to deliver service quality at the contact point
Deliver the service and experience effectively and efficiently
Discover from the feedback and responses
Application of this detailed and thorough methodology ensures that customer
needs at each contact point of a customer's travel experience (pre-trip, trip and
post-trip) are understood; infrastructure, service, policies & procedures are
designed in response to identified needs and appropriately delivered by staff
and other applicable delivery mechanisms in a consistent manner; and customer
response and feedback monitored to ensure continuous improvement and keep
pace with evolving needs and expectations.
Perhaps as critically, the focus on the customer facilitated by this process also
functions as the basis for coordinating and integrating the efforts of all of the
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various disciplines and activities involved in the project. Architects, engineers,
accountants, planners, front-line and security staff, among others, develop an
understanding of the interdependency and impact of their respective roles in
shaping the customer experience at any given contact point, and ultimately their
influence on ridership and revenue.
High Speed Rail Service
delivers what customers
want
A customer trip on the Florida High Speed Rail Service can be broken down
into three constituent phases:
• Pre-Trip Phase - During this phase, the need to travel is generated by a
precipitating event or planned activity. Customers may consider and evaluate a
range of transportation options, either on their own (websites, call centers,
printed materials) or through a third party (travel agent, tour operators, resort or
hotel). Ensuring that Florida High Speed Rail Service is included in a customer's consideration set is a critical requirement at this stage.
At this stage, typically customer needs are for information on attributes such as
service levels, fares, schedules, required transfers and trip times. Assuming that
High Speed Rail Service provides a good match with the criteria set by the customer, a reservation/ticket purchase transaction is completed and the next phase
of the trip is ready to be initiated.
• Trip Phase - A trip by High Speed Rail will require the customer use a complimentary mode of transportation to access a rail station and, in most cases,
then travel from a station to their ultimate destination. While the customer
experience on the High Speed Rail Service itself is important, a poor experience
with a connecting mode could negatively influence the customer's perception of
their subsequent High Speed Rail trip - underscoring the need to ensure the
development of a seamless, integrated network of transportation services.
While using the High Speed Rail system, customers' safety and security, information and creature comfort needs will have to be addressed through a combination of elements including, courteous, knowledgeable and trained staff, directional and instructional signage, and station and train amenities.
• Post-trip Phase - The successful completion of the journey does not automatically signal the end of the customer experience with the service. In some
instances, there may be the need to follow up on credit card billings, process
refunds, locate and return lost property and manage customer feedback (both
positive and negative).
8.3 End to End Service - Baggage Handling
A significant number of passengers will travel with luggage, which will affect
the customer experience and could have an impact on station dwell times and
schedule adherence. A Baggage Handling Plan will be developed to ensure that
baggage handling procedures support customer satisfaction and minimize the
time required for loading and removing luggage. The latest in automated and
technology-enabled handling systems will be investigated in the development
of this Plan.
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8.4 Employee – Support and Training
Employees are the foundation of service success. Great employees can work
around equipment deficiencies, inevitable system shortcomings and a diverse
customer base – great employees make great companies.
A customer centric
service design and
operating environment
Front-line employees will play a key role in assisting, directing and providing
information to customers, while ensuring consistent and reliable service delivery.
However, in order to effectively do so they must be equipped with the appropriate tools, policies and processes and given support for their efforts to satisfy
the needs of customers and deliver customer service. In a market where Disney
sets the bar for customer expectations, the importance of well-trained,
knowledgeable and efficient staff cannot be overstated.
8.5 Advertising & Promotion
Working from the foundation of a compelling and memorable brand High
Speed Rail will be marketed using a variety of online, print and partner marketing programs.
8.6 Customer Information
8.6.1 Signage
Directional and information signage, that delivers a mix of static and dynamic
real-time data, will compliment the efforts of front-line staff and help customers
effectively and efficiently access and use the system.
8.6.2 Real time information
In an increasingly wired, and wireless, society there is growing expectation that
service providers will have the capability to assemble and disseminate real-time
schedule information. The proliferation of cell phones, PDAs, laptops and
other mobile communication devices provide an opportunity for the High Speed
Rail Service to deliver real time service information (delays, cancellations etc.)
and for customers to elect to receive information through a preferred, or multiple devices.
8.7 Enhanced Amenity Package
There are a wide range of amenities that could be considered both on-board the
trains and at stations that will enhance the customer experience. For business
travelers, wireless internet capability, business service centers and stress-relieving
massage and spa services would take service beyond the boundaries of standard
rail service offerings. Vacationing families could choose from a variety of onboard entertainment options (games, movies, designated play areas and close
encounters with resort characters) to keep their young charges occupied for the
duration of their trip. On-line grocery services would allow arriving visitors to
complete their shopping and be met at their holiday accommodation property
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with the groceries. The nature and extent of offerings should be determined
through research, consultation and customer feedback.
Assessing customer needs
and identifying the key
drivers of customers'
satisfaction
8.8 Research & Monitoring
Achieving ongoing customer satisfaction and loyalty requires a range of activities
including an in-depth understanding of customers, an alignment of business
processes around the customer, and the creation of innovative tools and systems
to support employees in the provision of high quality service delivery.
Research provides an objective foundation for assessing customer needs and
identifying the key drivers of customers' satisfaction. It facilitates the establishment of performance benchmarks and standards, which then provides a
basis for continuously monitoring and charting progress and assessing the
effectiveness of initiatives and activities undertaken.
Customers will be the primary source for gathering information on key attributes
such as service reliability, personal safety, employee presentation and helpfulness, condition of equipment and facilities, and quality and availability of customer information. Operating statistics including on time performance, car
availability, fare compliance etc. will be standardized and aggregated into regular
reports. Once performance standards are established, all personnel will have
the responsibility of operating to standard, and in the case of non-conformance
developing action plans to remedy the deficiencies.
8.9 Community Consultation
High Speed Rail will represent a significant asset to the communities it serves.
As such, it should reflect the character, values and aspirations of its host communities. There is significant value in encouraging public participation through
consultative processes in several components of the project, including branding
and identity. This will facilitate community engagement and foster a sense of
ownership of the system, which will impact pre-disposition to use, trial and
sustained use by residents.
Similar consultative processes should be undertaken with respect to the design
and construction of stations and other project infrastructure. The impact of new
facilities on the face of a community and in particular the negative impacts
associated with construction (noise, traffic etc.) are often a significant source of
concern and conflict for local residents. A complete community consultation
plan will be completed to identify and address community and stakeholder
concerns and generate mutually agreeable solutions.
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9 Tactics & Execution
Electric powered
'Station Cars' encourage
environmentally friendly
station access solutions
There are four critical success factors in meeting the Florida High Speed Rail
Authority’s ridership and revenue projections.
9.1 Intermodal Coordination
9.1.1 Traditional Services
A trip on Florida High Speed Rail will typically represent just one segment of
a customer journey, which will be initiated and possibly completed on another
mode of transportation. In order to ensure that the High Speed Rail Service provides a seamless customer experience, a range of intermodal services that customers can transfer to/from at the stations will be established. Taxi or shuttle
service, public transit, rental or privately owned vehicle and bicycles represent
some of the travel options that will considered for integration at the stations.
9.1.2 Innovative Services
There is also the opportunity to consider the development of new products and
services such as Station Cars. For example, a family that arrives at the Orlando
Airport for vacation would typically rent a conventional car for their sole use.
A station car program would locate vehicles at “stations" (station car facilities)
at all major attractions, the airport, Florida High Speed Rail stations, and the
major hotels. The family would rent a station car (four/five seat cars and minivans) only when they need travel to a destination not immediately accessible
from a Florida High Speed Rail station. When they are not using a vehicle,
other families could be using it, thereby reducing the cost of use for an individual family, while helping to reduce the number of vehicles on the road. The
same shared-use principle could just as easily be applied to residents traveling
for business or other purposes along the Tampa to Orlando corridor.
9.1.3 Schedule and Fare Integration
In addition to ensuring that customers have a range of intermodal connections to choose
from, it is equally as important that their travel experience is integrated and seamless.
Air/rail code sharing is emerging as a new practice in the United States and Europe.
Code sharing is a commercial agreement between two operators that allows one to
put its two-letter identification code on the flights or trips of the other as they appear
in computerized reservations systems and in the Official Airline Guide. Customers
will be able to fly on an airplane from their home town to a city served by High
Speed Rail and then continue on the train to their final destination using the air carrier’s ticket designator. This will allow customers to have the benefits of a single
ticket to destinations not previously available on their airlines network. Companies
that share codes typically coordinate schedules to minimize connection times as
well as provide additional customer services, such as one-stop check-in and
baggage checked through to the final destination. Potential code share partners will
be identified as one of the means of addressing this success factor.
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9.1.4 Baggage Handling
Given that many customers will be traveling with luggage, baggage handling
procedures and protocols will be established to reduce the level of passenger
effort in transferring luggage to/from the train. Options under consideration
include direct-to-hotel concierge services and direct-to-airline baggage checkin systems such as those in current use by Disney properties, Cruise Ship
Operators and the Hong Kong rapid transit system to the airport. This has been
an area of significant development in the past ten years with a range of tested
and supported technology solutions now available that deliver authentication,
security and tracking of pieces.
The future is easy.
Direct-to-hotel concierge
services, direct-to-airline
baggage check in systems
and web-enabled
vacation package booking
9.2 Partnerships
In addition to the need for partnerships with other transportation service providers
as described above, there is significant opportunity to develop relationships with
organizations in the travel and hospitality industry that will generate awareness,
induce trial and facilitate sustained use of the High Speed Rail Service.
Joint sales and marketing programs, including reciprocal ticket sales, website
links and special packages that include High Speed Rail tickets and/or passes
will be pursued with local area resorts, hotels and attractions.
Similar relationships will be fostered with convention planners and the new
convention centre. Discounts for the bulk purchase of tickets and passes for
visiting convention delegates, or preferably the development of an integrated
convention participants’ ID that also functions as a pass to use the service could
serve this niche market.
Many of the visitors to area resorts and attractions use the services of tour operators,
travel agencies and increasingly internet brokers, such as Expedia.com, to plan
and purchase their vacation packages. Most of these packages consist of air
travel and hotel accommodations, but may also include "ground transfers".
Where possible and applicable, negotiations will be pursued to include High
Speed Rail transfers in these packages.
9.3 Service Reliability – Passenger Guarantee
The largest potential market segment and target for High Speed Rail Service
comprises local residents traveling the Orlando/Tampa Bay corridor for commute, business and other purposes. Whether the need is to catch a connecting
flight, attend a scheduled business meeting or start a day's work, time sensitivity
will characterize many customer trips. Service and travel reliability will be key
to successfully addressing these customers' needs. There are several factors that
will contribute to and have an impact on service reliability and consistency.
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9.3.1 Safety & Security Policies and Procedures
In the post 9-11 environment, there is a heightened awareness of the need for
safety and security protocols, particularly in the transportation sector. A direct
impact has been an increase in check-in and security requirements at all airports. This has resulted in increased travel time for air customers. A plan to
ensure passenger security on Florida High Speed Rail with the least impact on
boarding times will be developed.
Great companies
turn mistakes into
opportunities to
'wow' the customer
9.3.2 Service Recovery
No matter how good, or how well planned a service is, mistakes will happen.
The great companies are those that know what to do when service failures occur
– and how to turn them into opportunities to increase customer satisfaction and
loyalty. A detailed Service Recovery Plan that includes provisions for alternative travel arrangements and customer compensation, and that is well understood by staff and can be deployed with minimal delay will be developed for the
Florida High Speed Rail Service. The three fundamental elements of the plan
are:
• Develop listening posts to find out customers’ problems with the service.
• Train, empower and give employees tools to accept and respond to complaints.
• Implement systems that lead to speedy recovery and prevent problems
from reoccurring in the future.
Service failures provide a unique opportunity to demonstrate a commitment to
customer service. As evidence, it has been shown that of customers that experience a service related problem, if it is solved promptly, 95 percent will come
back.
9.4 Customer Driven Service Design
A key strategy in ensuring project success will be a customer first focus. This
will be enabled using a detailed analysis of customer contact points and in the
structure and focus of the system facilities, operating company and operations
philosophy. Customer research will be a key input to service design and to
service delivery.
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10 Budget Envelope & Master Schedule
10.1 Budget Envelope
A budget envelope is contemplated for pre-build stages. The operating system
will be supported with an annual marketing budget of approximately 20 percent
to 25 percent of operating expenses. Marketing budgets may be adjusted subject
to prevailing market conditions and as needed to achieve ridership and revenue
targets.
10.2 Schedule Milestones
Community Consultation Program
Branding
Market Research Design and implementation
Ground Breaking
Service Design Inputs
Technology Plan
Customer Information Plan
Baggage Handling Plan
Partner Program [packaging and reciprocal programs]
Signage and Wayfinding
Service Recovery Program
Customer Care Training
Amenity Package
Launch Campaign – Advertising & Promotion
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