Eurostar Makes Changes To Ink Corporate Deals.
<FONT SIZE="+3"><B> Eurostar Makes Changes To Ink Corporate Deals</B>
By Amon Cohen
London - The worm has turned for English Channel Tunnel passenger rail service Eurostar, which finally clinched its first two deals with corporate clients a several weeks ago.
Eurostar's previous refusal to negotiate deals was at the top of a list of grievances articulated by disgruntled corporate travel managers.
Matters have improved tremendously in the past few months, however, with other issues such as computer reservations systems access and ticket flexibility also being cleared up. Eurostar operating company European Passenger Service also has introduced a host of innovations, including exchangeability with airline tickets and several new fare structures.
The first two deals have been signed with ICL and with STC Submarine Systems, which has just been taken over by French-based company Alcatel. EPS key account manager Simon Pielow said more buyers had agreed on terms and would be announced shortly.
Opinion is divided on why the changes have happened: Some point to EPS being taken over by the consortium London and Continental Railways (L&CR), one of whose members, Virgin Atlantic, is overhauling the sales and marketing departments. Others say the changes were about to happen anyway, but Virgin has done a better job of publicizing them.
Whatever the impetus, travel managers and agents alike endorsed the improvements. "We have finally got the admission that Eurostar is one of a number of competing services across the Channel," said Richard Cornwell, chairman of the Institute of Travel Management and senior manager, travel and functions for Price Waterhouse. "Eurostar is beginning to understand the needs of the business travel community."
"A lot of perceived obstacles seem to have slipped away," said Hogg Robinson director of commercial affairs Mike Platt. "They have moved out of the embryo and into infancy as far as the corporate market is concerned. Let's hope they extend into adolescence."
"I had been asking EPS forever when they were going to start giving incentives, and finally they called me," said ICL travel manager Rosemary Absalom, attributing EPS' change of philosophy to its new ownership.
Most of ICL's U.K. offices are based in the Thames Valley, to the west of London, making Heathrow the natural choice for the company's travelers. "This deal is an incentive to get to Paris or Brussels in another way," Absalom said.
Apart from the deal Absalom has negotiated, she believes the high quality of the Eurostar product and the convenience of arriving in the center of Paris or Brussels will help win over some of her travelers.
Pielow said EPS is looking to cut deals with clients whose travel policy either mandates or highly recommends preferred travel suppliers. The other two criteria are that the business is new to Eurostar and will grow, and that the client has the ability to track travel spend.
"These have to be deals that deliver," he said. "We have walked away from a couple of potential deals with blue-chip companies because they did not meet our requirements."
EPS is looking at agreements driven by volume rather than market share. "These can be either by sector or by revenue," Pielow said.
Although the news will please many travel managers, it will disappoint those who have shown faith with Eurostar from the beginning, often at the expense of their overrides from airlines. Pielow saw no need to offer deals to existing customers.
"Our first-class fares to Paris are 235 return, compared with 285 minimum on the airlines [about $350 and $425, respectively]," he said. "Customers are also saving on airport tax and on the expense of transferring to out-of-town airports, so they already come out on top, even if they are losing part of their override. These new deals are intended to win those businesses which are currently inveterate users of Heathrow Airport."
Other sales and marketing innovations announced since London and Continental Railways was appointed to take over Eurostar include:
1. Fully flexible ticket exchange: Until recently, even passengers traveling on theoretically fully flexible tickets could not transfer directly to earlier or later departures than the one they had booked. Instead, they had to buy a new ticket and claim a refund on the unused one. This obstacle has been removed.
2. Reservations: The much-derided Tribute reservations system, which involved travel agents buying dedicated hardware simply to issue Eurostar tickets, is to be scrapped. The replacement program, TSG, already is available on Galileo, will be on Sabre by next month and on Amadeus and Worldspan by the end of the year. Internet reservations are being considered as well. For those still booking by telephone, additional sales staff have been recruited to stem the flow of complaints about delays in answering.
3. Travel agents: EPS has started to negotiate deals with business travel agents. It has signed agreements with Carlson Wagonlit Travel and Hogg Robinson, although negotiations with American Express have foundered. EPS also is appointing a dedicated sales team for business travel agents.
4. Airline ticket exchange: Business travelers can now switch between Eurostar and flights offered by British Midland on its London-Paris and Brussels routes. A flexible and fully changeable Premium First fare has been created that is exchangeable with British Midland's Diamond EuroClass business-class fare. Negotiations are under way for similar agreements with British Airways and Air France.
5. Advance bookings: The maximum advance booking period of 83 days has been extended to 11 months.
6. Transfers: EPS is poised to introduce a limousine transfer service to London's Waterloo International station for Premium First Class passengers, similar to the benefit offered by Virgin Atlantic.
7. High-speed connections: New return fares have been introduced from London for high-speed rail connections to Lyon and Bordeaux for about $150, Marseilles for $163 and Cologne for $118.
8. Additional departures: There are now up to seven departures per day to Brussels and 16 to Paris, including a 6:15 a.m. service for business travelers from Ashford, Kent, where a Eurostar station opened in January.
9. Frequent-traveler program: The long-awaited loyalty program is scheduled for launch by September and will be tied to Virgin's program.
Eurostar captured 35 percent of the London-Paris market in 1995, its first year of operation. That equated to 3 million passengers on that route, which is the busiest international passenger route in the world.
London Heathrow-Paris Charles de Gaulle traffic dropped 30 percent as a result of the Eurostar's arrival but could drop further: EPS intends ultimately to dominate 95 percent of the market, although that will not happen in 1996. Eurostar is predicting a rise in passenger numbers to 6 million for this year.