18 Jan 2010

Bargain basement fares - marketing gimmick

The ultimate yield management tool is the advance-booking bargain basement fare. These are promoted on railways in most European countries but they are nothing but a marketing gimmick. SJ, the Swedish national railway, was offering tickets for 95kr between Stockholm or Gothenberg and Copenhagen. Of course these could be used only on a particular train, sitting in a particular seat.

Last year these tickets were being snapped up as soon as they were available and then auctioned on Ebay. SJ put a stop to it by insisting on identification but the whole concept of bargain basement fares for advance purchase is nonsense.

It is unlikely to induce anyone to travel who would not have made the journey anyway. It encourages people to buy tickets and not make the journey, leaving empty seats. And when people book so far in advance, they may find that they are unable to make the journey when the day finally arrives.

Reasonably priced walk-on fares are what is needed. People will accept some restrictions on peak-time travel. Advance-booking bargain basement fares are of no relevance to most people's travel needs.

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