Corporate travel managers looking to embed rail into their travel programmes have long suffered challenges around content fragmentation and the ability to service rail bookings online.
Cross-border ticketing remains a highly complex, near impossible feat and the traveller experience can differ vastly across various private and state-owned rail operators. And when competing directly with air, there is also the journey time to contend with.But recent domestic flight bans in France and Spain, coupled with the introduction this year of the EU’s Corporate Sustainability Reporting Directive (CSRD), are pushing travel managers to sharpen their focus on rail travel. Some corporates have taken steps to mandate rail travel over air on select routes as part of renewed company travel and expense policies, but is that easier said than done?
A recent poll of buyer members at the UK’s Institute of Travel Managers (ITM) found that 43 per cent of companies have a rail-first policy in place, particularly on Eurostar-serviced routes from the UK to France, Belgium and the Netherlands.
One such buyer member, who runs a global travel programme for a financial services firm, introduced a rail mandate last month which stipulates that if a trip can be made by rail in under four hours then that option must be taken. Where the rail journey is between four and six hours it is also “strongly encouraged”.
The global travel manager, who spoke to BTN Europe under the guise of anonymity, said the Paris-based company’s biggest source of CO2 emissions is air travel undertaken by its 1,500 regular travellers across more than 50 offices worldwide. In 2023, the company set “a very ambitious” target to reduce its carbon intensity per employee by 45 per cent on scope 1, 2 and 3 emissions by 2025 (compared to a 2019 baseline).
“If we don’t make these changes, we’ll never make it,” they say. “[The new policy] has been a bit of a revolution internally, but it’s not perfect because rail alternatives aren’t always available,” they explain. “However, we encourage employees to travel less but to stay longer, or even incorporate an overnight stay [in order to make a longer rail alternative more palatable] as long as it’s in a [HRS] GreenStay hotel.”
While certain high-traffic European routes have been identified as strictly rail-only – such as Cologne to Zurich and Paris to London – the travel manager said the modal shift must be “gradual”.
“We cannot go from 100 per cent to zero [air travel]. It’s a difficult balance to strike because we also have business to do. And in pursuing sustainability goals you cannot upset the business too much, otherwise the company won’t survive,” they say.
Any train journey exceeding two hours qualifies for business or first-class travel, in contrast to flights, which are restricted to economy class
Enforcing such a policy isn’t easy. The travel team have embedded a series of go/no-go questions into their online booking tool to inform employees about sustainable travel options, but the ability to book an air ticket, even on routes with a viable rail alternative, is still permitted within the company’s booking tool. However, if such a choice is made, it is followed by a “stern” email asking the traveller to justify their decision.
Additional policy tweaks have been made to sweeten the rail offer, such as permitting first-class tickets for all rail journeys and the removal of tiered benefits that were previously in place for VIP or frequent travellers – so the rail mandate is “fair” and applies to all travellers across the corporate hierarchy.
Going the distance
Amsterdam-based design and consulting firm Arcadis has built pop-up messaging into its booking tool to ‘nudge’ travellers towards sustainable options in accordance with a new policy that stipulates any journey less than 700 kilometres should be made via rail where the option is available.
“This is very much an awareness campaign,” says global travel director, Nikki Parsons, so rail travel is “encouraged” rather than strictly enforced.
The company is aiming to reduce overall business travel emissions by 35 per cent by 2025 (against a 2019 baseline), and has also set a specific air emissions reduction target of 50 per cent by 2025. According to its 2023 annual report, its business travel emissions have already decreased by 30 per cent, while air emissions are down 26 per cent against the 2019 baseline.
To ensure it remains on track, Arcadis recently began deploying quarterly CO2 footprint reports to its 25,000 travellers globally which also include personalised suggestions for less carbon-intensive options for future trips, such as a rail alternative, for example.
For clinical research organisation, Parexel, shifting travellers from airplanes to long-distance trains involved establishing travel parameters that are palatable for both travellers and the business. Ben Park, Parexel's executive director of travel & sustainability, says the company prefers rail travel for non-stop journeys of up to four hours. Additionally, any train journey exceeding two hours qualifies for business or first-class booking, in contrast to flights, which are restricted to economy class.
“By enhancing the seating experience on long-distance rail journeys, we've made it a more appealing option for our travelling colleagues,” says Park.
The company has also recognised the productivity benefits of train travel. “Although train tickets can sometimes be pricier than plane tickets, the overall advantage for the company is substantial,” Park says. “Travellers face less stress, enjoy a more pleasant journey, and can work seamlessly with WiFi, contributing to the planet's wellbeing. It's a triple win for the company.”
Parexel’s German entity has also leveraged Deutsche Bahn’s loyalty programme, which offers perks like upgrades and complimentary meals, to encourage policy compliance. “The success of airline loyalty programmes posed a significant challenge when advocating for rail travel,” Park acknowledges.
While the rail over flight policy has global reach, it is not compulsory. The team is taking a country by country approach and conducts local campaigns to educate travellers about domestic rail options and encourages choosing trains over flights, with periodic assessments of compliance.
Initially, in 2022, the policy identified three city pairs in Germany. This number has since expanded to six to eight city pairs, with steadily increasing adoption rates, and the company is now focusing on Spain and Italy to enhance train usage.
Park says 96 per cent of Parexel's domestic business travel in Germany in 2023 was conducted by train and estimates that approximately 40 per cent of domestic trips across Europe are now by rail, with the numbers rising significantly.
Similarly, UK-based engineering and management consultancy Mott MacDonald recently shifted the focus of its travel policy away from the lowest logical fare to more carbon-efficient rail options across nearly 20 domestic routes.
“We haven't entirely rewritten the rulebook because we can't apply [rail-first mandates] in the system for every route,” explains group travel manager Flo Chick. Since the modal shift campaign was introduced last July, Chick says carbon emissions on the identified routes have dropped by 50 per cent. Air travel on these routes is still permitted, but now requires “active approval” from the budget holder within the OBT workflow.
“There's still some flexibility for people if they need it,” Chick says, adding that she and the team have done “quite a bit of leg work” to gain senior management buy-in. This included drawing up cost, travel time and carbon emissions comparisons between air and rail on popular routes. Notably, Chick calculated total travel time from office to office, incorporating the added cost, time and carbon emissions of last-mile ground transfers.
“We were able to say 'this is what it's going cost in additional ticket prices per year because rail is more expensive than air, but this is what we're going save, and this is the difference it's going make to our carbon footprint' …and it was quite a convincing argument,” says Chick. “One of the things that was quite surprising about that exercise was that, for some routes, it was actually quicker to go by rail,” she adds.
Chick says OBT preferencing capabilities will be critical in driving further behaviour change among travellers, especially as the company plans to broaden the scope of the policy to include cross-channel services to Brussels, Paris and Amsterdam.
“One of the key factors in driving change will be the ability to use the OBT algorithm to sort search results according to carbon emissions [rather than by cost]... and how much emphasis you give to carbon over cost. Once you've got the tools to do that, you don't have to necessarily write the policy so much as apply the logic in the rules,” she explains. At the moment, however, Chick says her OBT does not provide “that sort of nuance”.
It's very hard in these times of strikes for us to push for rail over air if it's the less reliable form of transportation
According to ITM’s head of programme Kerry Douglas, the biggest hurdle preventing more corporate travel managers from shifting to a rail-first mandate is a lack of content available via online booking tools and the inability to display rail alongside air at the point of booking.
In fact, in a December 2023 survey, only 18 per cent of ITM’s buyer members stated they were satisfied with the rail content provided through their booking tool. The challenge, Douglas added, is that the “consumer experience of booking rail is significantly better than the business travel experience of booking rail”.
Hitting the buffers?
Persistent rail strikes across Europe are causing havoc for travel managers looking to embed rail policies. Both Parexel’s Park and Mott MacDonald’s Chick say the recent wave of rail strikes in Germany and the UK has “definitely” impacted traveller appetite for rail, with increased concerns over reliability. “It's very hard in these times for us to push for rail over air if it's the less reliable form of transportation,” says Park.
In the UK, the Business Travel Association recently published a whitepaper calling for “urgent” reform in order to improve rail passenger services, including greater transparency around service delays and the need to clean up “carriage grot spots”.
In Nordic countries like Sweden, infrastructural difficulties, coupled with harsh winter conditions, are an ongoing challenge. “We don't worry too much about the strikes – we are more worried about whether the electricity is working or if there’s ice on the tracks,” says Fredrik Hermelin, general manager of the Swedish Business Travel Association.
Despite a “huge mandate from the government for Swedish companies to use the train”, Hermelin says many corporates can’t build a travel policy based on rail “because I cannot guarantee that my business people will arrive at the destination on time, or even on the same day”.
Even on well-serviced routes, such as the three-and-a-half-hour train trip from Stockholm to Gothenburg, Hermelin says most corporates would likely still consider flying “if you really needed to be in Gothenburg on time”.
However, state-owned rail operator SJ’s recently announced fleet modernisation initiative – including EIB financing for 25 new high-speed trains to operate in Sweden, Norway and Denmark – as well as planned railway network maintenance, are expected to improve the situation for business travellers.
Clearly, there is still much to be done to make rail a smart – and easy – choice for business travel in Europe. Prospective EU legislation such as the Multimodal Digital Mobility Services (MDMS) regulation has potential to change the game, but to what extent?
• Stay tuned for part two, which will examine MDMS and its likely implications for business travel in Europe.
Tags: UK’s Institute of Travel Managers (ITM), Air travel, train journey, OBT, Flo Chick, Fredrik Hermelin, Swedish Business Travel Association, business travel in Europe Air versus rail
