CONO Sleeper Bucket Puzzle

[niemi24s]

Having spent some time finding and charting buckets levels for all the LD trains, a general pattern emerged regarding the spread (or ratio) between the mid bucket Bedroom and Roomette prices:

• Most of the spreads (mid bucket Bedroom ÷ mid bucket Roomette) fell in the range of 1.9 to 2.3, as shown in pink below:



• Three notable exceptions to this pattern were the CONO, CRES and CL as shown, circled, above. The CONO had the smallest spread (ratio) of 1.36 which is 36% below the 2.13 average for all the ones in pink.

Q: Any idea why CONO sleepers are priced so much differently?

 

[Shortline]

Look at the numbers-the overall price differential is much smaller, so the spread will be as well.

 

[Ryan]

Well yes, that's what he's asking, why is the overall price difference so much smaller.

The answer is elasticity of demand.

 

[Shortline]

I guess I thought his question is why his ratio is smaller. Why the fares are less of course, is due to demand, transit time/meals involved, and market willingness to pay I suppose.

 

[gatelouse]

Yup, the question was about ratios, and the answer, still, is elasticity of demand.

 

[niemi24s]

Elasticity of demand? This quick find... http://www.investopedia.com/terms/d/demand-elasticity.asp ...says " Demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables, such as the prices and consumer income. Demand elasticity is calculated by taking the percent change in quantity of a good demanded and dividing it by a percent change in another economic variable. A higher demand elasticity for a particular economic variable means that consumers are more responsive to changes in this variable, such as price or income."

No wonder Carlyle called economics the "dismal science"! :blink:

 

[neroden]

So this implies that there's something funny about the demand pattern on the CONO. Lowering prices doesn't get more people onto the train. There's something fundamentally weak about the CONO route. Lack of cultural connections between Louisiana/Mississipi on the one hand and Chicago on the other, perhaps.

 

[andersone]

Only way I know to get to Memphis.

 

[NativeSon5859]

Plenty of cultural connections between New Orleans and Chicago. It's probably one of the more popular trains in terms of end-point to end-point traffic. Memphis is also a large generator of traffic. But those cities are by and large carrying the route.

The route has not seen any investment in on board product. It's tired. No new stations added. No staffed SSL. Poor Dining Car meal quality and service. Not surprised it's not a route doing gangbusters.

 

[niemi24s]

According to .. https://www.narprail.org/site/assets/files/1038/trains_2015.pdf ...Memphis had the most activity (other than CHI & NOL) and Memphis & NOL formed the city pair with the greatest ridership.

But that doesn't explain (to me, at least) why a Bedroom on the CONO only costs about 36% more than a Roomette - most other trains its about 100% more. How elasticity of demand ties in to all this is way above my pay grade. But then the Roomette buckets on the CONO are only a few $ more than Coach buckets - beat out only by the Silver Star with Roomette less than Coach. And according to this... https://www.amtrak.com/ccurl/515/889/Amtrak-Monthly-Performance-Report-September-2016-Preliminary-Unaudited.pdf ...on page C-1, only 4 other LD trains had worse losses per seat mile and losses per passenger mile in FY15 than the CONO.

Like NativeSon5859 said "The route has not seen any investment in on board product. It's tired." and the current bucket structure is about the most anybody is willing to pay.

And how about this? Could the ratio/spread between Coach buckets and Roomette buckets be an indication of Amtrak's tacit assessment of the trains food service quality? Starting from the lowest (worst?) the order is: SS, CONO, EB, CRES, SL, AT, CL, SM, CZ, LSL(BOS), CS, SWC/TE and CARD/LSL(NYP). This is just a wild idea and hop it doesn't start any food fights.

 

[gatelouse]

Perhaps passengers are more willing to pay up for a bedroom on longer trips. The CONO and CL are about 18 hours end-to-end, as is the Crescent from the NEC to Atlanta. Ergo, less demand for bedrooms on these routes, and more demand on the longer Western routes.

This wouldn't explain the LSL.

 

[niemi24s]

Perhaps passengers are more willing to pay up for a bedroom on longer trips. The CONO and CL are about 18 hours end-to-end, as is the Crescent from the NEC to Atlanta. Ergo, less demand for bedrooms on these routes, and more demand on the longer Western routes.

This wouldn't explain the LSL.

Good point - hadn't considered route length. But I suppose the answer lies somewhare in elasticity of demand or something else beyond my event horizon.