Family Bedrooms on low-volume days Auto Train

[guest_nj_321]

I recently took my family on the AT trip (Southbound) in the Family Bedroom.

Southbound in the Spring/early Summer seems to be low-volume time for AT.

At least the half of our sleeping car was empty.

I believe only 2 Family Bedrooms (out of possible 6) were sold, as not long

before the trip the charge for Family Bedroom on that departure was $459 (which

indicates the third bucket, $240 is for the first bucket, $350 for the second).

It looks like Amtrak was willing to haul 4 Family Bedrooms unoccupied on that

particular day rather than to "flex" the bucket policy and lower the third bucket

fare to $350. Lowering the third bucket to $350 might entice additional buyers

to take the trip and ultimately result in higher revenue for Amtrak.

This would only work on low-volume days (that should be known to Amtrak well in advance

as it runs Auto Train for many years now), on high-volume days everything on Auto Train

is sold out at any price. There may be additional dynamics of demand for other room types

(Roomettes, regular Bedrooms), but I think Family Bedrooms are mostly appealing to

families with 2 young kids. $350 is really the maximum accomodation charge that a [typical]

family would pay for the AT trip, otherwise it doesn't make much sense economically.

Even assuming $5/gallon gas and 20 miles/gallon fuel consumption, a substitute car-trip

parallel to AT costs as follows:

880 miles / 20 = 44 gallons of gas x $5 = $220

1 night hotel = $100

Meals (1 dinner + 1 breakfast + 1 lunch for 4 people),

assume $10/person breakfast, $15/person lunch, $25/person dinner,

$25 x 4 + $10 x 4 + $15 x 4 = $200

Total cost: $220 + $100 + $200 = $520 ($1,040 roundtrip)

Amtrak fare at the $350 bucket level:

2 x $100 (adult fares) + 2 x $50 (kids fares)

+ $350 Family Bedroom charge + $170 car charge = $820 ($1,640 roundtrip)

Extra $600 for a roundtrip is already a lot of money to part with for the train ride

(which, by the way, is great), and at $459 level it becomes simply uneconomical,

regardless of how great the Auto Train trip is.

$1,640 roundtrip is even high comparative to flying + renting a car

($300 x 4 air tickets + $200 car rental = $1,400), although people would consider

paying extra $240 for the comfort of a train ride. Make it paying extra $460 (at $459 bucket level),

and it would probably break the deal.

So, on historically low-volume days, Amtrak will *NEVER* sell out Family Bedrooms on

Auto Train with its current bucket policy.

I think that a more reasonable policy is to keep the first bucket as is ($240) and set ALL

remaining 5 buckets at $350. Given that only 2 Family Bedrooms sell on a low-volume day,

Amtrak has nothing to lose with this tweaked policy and everything to gain.

It will also make itself much more accessible to travelling families, and the young kids

may become their long-term costomers in the future.

 

[Ryan]

Revenue managers constantly monitor sales and move rooms between buckets as necessary to maximize revenue.

This is most evident in the high demand rooms/seasons never even being offered at low bucket. They open at one of the higher buckets and only get lowered if too many rooms go unsold.

I'm not sure where your perception that the bucket policy is coming from, but it's misinformed.

 

[guest_nj_321]

Revenue managers constantly monitor sales and move rooms between buckets as necessary to maximize revenue.

This is most evident in the high demand rooms/seasons never even being offered at low bucket. They open at one of the higher buckets and only get lowered if too many rooms go unsold.

I'm not sure where your perception that the bucket policy is coming from, but it's misinformed.

====

Well, according to my experience, only 2 FBs were sold on AT, yet the price on the web site was still

listed at $459.

Doesn't look like "revenue managers" were adjusting prices down.

It is much easier to do what you described -- adjust prices *UP* on a high-volume day -- this is probably

what "revenue managers" usually do, NOT what I suggested.

 

[Ryan]

That's the danger of making sweeping generalizations based on a single data point.

 

[guest_nj_321]

True. I was talking only about my "single data point".

More of a reason to post it on this forum and see if others had similar experiences.

A part of my post is also about how "out-of-whack" the Auto Train pricing went in general.

It seems that there is no real difference in pricing between high-volume days

(like Northbound around Easter time, when the whole Auto Train is sold out at any price)

and low-volume days (when more price-cautious people travel). Amtrak has all the rights

to charge as much as it could on high-demand days, but keeping the same general pricing

structure for lower-volume days does not make a lot of sense and I think ultimately hurts

Amtrak (from both revenue and perception point of view).

 

[Guest]

How do you know they were not sold? Did you inspect each room personally after departure?

I know AT used to try to sell upgrades at the stations, but I'm not sure if they do that anymore.

Those of us that travel Amtrak a lot know that there are some instances where the fares go down.

 

[Cho Cho Charlie]

Is the point being made, that it would be far better for Amtrak (financially) to have two empty roomettes, than to have one empty family room, on the AT? So, Amtrak should lower the price of the family room, to make it more attractive to families of four?

 

[alanh]

The risk of offering last-minute discounts is how it affects future behavior. Amtrak doesn't want to encourage people to hold off buying in the hopes that the price will go down. They'll end up with more empty rooms at the last minute and more they have to dump cheaply. And there'd have to be a way of preventing someone that booked at a higher rate from cancelling and rebooking. (And you'll have to expect them to be upset about that.)

The current onboard-only upgrades is probably the best way to handle it, as you're already committed to travelling at least in coach.

 

[Swadian Hardcore]

True. I was talking only about my "single data point".

More of a reason to post it on this forum and see if others had similar experiences.

A part of my post is also about how "out-of-whack" the Auto Train pricing went in general.

It seems that there is no real difference in pricing between high-volume days

(like Northbound around Easter time, when the whole Auto Train is sold out at any price)

and low-volume days (when more price-cautious people travel). Amtrak has all the rights

to charge as much as it could on high-demand days, but keeping the same general pricing

structure for lower-volume days does not make a lot of sense and I think ultimately hurts

Amtrak (from both revenue and perception point of view).

I'm sorry, but I have not had similar expieriences. For example, I recently took a regular LD (non-AT) and my Sleeper was virtually sold out. One roomette and the H-Room was epmty. This happened despite Roomette fares been at highest bucket at the last minute. I did not bother to check each other room on each other sleeper, but still, I don't think Amtrak has as bad revenue managers as you think they do.

 

[PaulM]

Revenue management is a statistical game. You win some; you lose some. To determine whether a revenue manager is doing a good job would require very controlled experiment over a period of time under various conditions and revenue management strategies.

 

[zephyr17]

True. I was talking only about my "single data point".

More of a reason to post it on this forum and see if others had similar experiences.

A part of my post is also about how "out-of-whack" the Auto Train pricing went in general.

It seems that there is no real difference in pricing between high-volume days

(like Northbound around Easter time, when the whole Auto Train is sold out at any price)

and low-volume days (when more price-cautious people travel). Amtrak has all the rights

to charge as much as it could on high-demand days, but keeping the same general pricing

structure for lower-volume days does not make a lot of sense and I think ultimately hurts

Amtrak (from both revenue and perception point of view).

I'm sorry, but I have not had similar expieriences. For example, I recently took a regular LD (non-AT) and my Sleeper was virtually sold out. One roomette and the H-Room was epmty. This happened despite Roomette fares been at highest bucket at the last minute. I did not bother to check each other room on each other sleeper, but still, I don't think Amtrak has as bad revenue managers as you think they do.

The H room is held out from general sale until 2 weeks before departure. That may be why it did not sell in an otherwise largely sold out car. If they only had one roomette open and many of the rest sold at higher buckets, then that is probably an ok decision by revenue management.

Agree with the other posters in a single data point is not a complete argument that the revenue management is poorly run. If that happens a lot, yes, they are not meeting the objectives of revenue management, but one instance, can't infer anything just from that.