Rail Europe is on a roll. Last year, Rail Europe, Inc. consolidated with Rail Europe 4A to form one business unit, in addition to launching a new version of its app—but the largest distributor of European rail products worldwide isn’t stopping there. In a recent move, the company fully acquired Australasia’s leading international rail specialist, Rail Plus, in an effort to further increase its presence in Asia and the Pacific.
Australia is Rail Europe’s second largest market next to North America, however, the “last piece of the puzzle,” according to Zine Belhonchet, CFO of Rail Europe, the overseas business unit of VSC Group, and CEO and president of Rail Europe, Inc., is conquering the Chinese market—and as you may have guessed already, the company is well on its way to doing just that. Belhonchet took the time out to speak with Recommend’s Web Editor about Rail Europe’s progress so far and what the outlook for the company is in 2016 and beyond.
Melissa Bryant (MB): What does Rail Europe’s full acquisition of Rail Plus mean for the company?
Zine Belhonchet (ZB): What this means for the company is that we’re going to be able to grow our Australian and New Zealand sales much better than before because Australia is our second biggest market, and the potential for this market is really significant. We want to use Rail Plus’ knowledge of this market, its network of travel agent partners in order to make sure that we generate the most out of the Australian market. On top of that, Rail Plus has a staff of about 50 people, and the people are experts in rail, especially European rail, and this is an asset for us. We’re going to use them to provide the best service possible to our local customers.
We have a project called Follow the Sun, which will provide 24/7 service to our customers before they travel and while they are traveling in Europe. The objective is to have an agent available whether by phone or live chat whenever our customers want to reach us. Of course, that is only one side of the equation. The other side is we are working on developing two [agents] that will act as travel companions for our customers while they are traveling. The goal is really to provide a differentiated and better experience for our customers. We’re also creating a network of customer care centers with centers in Chicago, Paris, Mumbai and now Melbourne and Auckland.
MB: What does Rail Europe have coming down the pike this year (e.g. key trends)?
ZB: 2016 is the best year to go to Europe for tourism. Airfare to Europe is much cheaper than it has been in the recent past. On top of that the U.S. dollar being stronger and the Euro being weaker makes a European vacation much cheaper, starting with the price of the train ticket. Train tickets are cheaper than they were a couple of years ago, and really we are positioning Rail Europe in a way that will allow us to surf on this wave. We have very interesting price promotions…we’ve been able to negotiate initial deals with the rail carriers and we’re offering discounts of up to 20 percent on some of our main products. So all in all, 2016 is really the perfect year to travel by train in Europe.
MB: Tell me more about the launch of the first Rail Europe office in China and Rail Europe’s expanding presence in Asia.
ZB: China is a fast growing market and the potential for this market is huge in the coming years, and Rail Europe has a big presence in Asia already. For instance, Japan and Korea are big markets for Rail Europe. However, we’ve noticed that to really grow in the Chinese market you need to have a local presence. From a technological point of view, it is better to host your web locally, if you don’t the response time is much higher and you can encounter many, many issues. We want to offer local customer care, and that is why we’re hiring local staff.
MB: How important are travel agents to Rail Europe’s success?
ZB: Travel agents have always been key to Rail Europe’s success. In the U.S. they represent 50 percent of our business, and globally they represent about two thirds of our sales.
MB: How will the company’s partnership with travel agents translate into this Asia expansion?
ZB: What the Asia expansion allows us to do, what the worldwide expansion allows us to do, is to start thinking in terms of global contracts. Previously, Rail Europe was split into two entities, one taking care of North America, one taking care of the rest of the world. Now that Rail Europe is one global entity we are able to offer global deals to our partners and we don’t have to split the territories. On top of that, we are now a much bigger company, entity than before and it makes our negotiating power with the rail carriers in Europe much higher. We can negotiate better deals with them, we can negotiate discounts, promotions and things like that, and that’s really key.
MB: How are you incentivizing travel agents to book with Rail Europe?
ZB: One the main reasons to buy with Rail Europe is that Rail Europe is a one-stop shop. It’s a place where you go to find a country and see if the European rail offers service there. Travel agents don’t have a lot of time, and at the same time, want to offer the best service possible to their clients. We provide everything in one location, on one site, and on top of that we offer the possibility to call someone or chat with someone if they have questions. We do offer commission, and we regularly have, quite often actually, special promotions where we give special rewards to travel agents when they close sales on particular products.
MB: In what ways do you accommodate solo travelers, couples, multi-generational families and millennials? How does their travel differ?
ZB: The good thing about Rail Europe is that we cover everyone’s needs. Our offer is so wide that anyone can find what they are looking for on our website and also through travel agents who book through Rail Europe. We offer pass products that typically have been used by younger people traveling across Europe over long periods of time, and we also offer point-to-point tickets for people who only need one or two train trips during their visit to Europe. On top of that, the products we offer have special deals for families traveling together. For instance, on Eurail children below the age of 12 travel free with their parent. So that’s a pretty big incentive for families who want to take the train while they are in Europe. The prices for children are lower on passes, on top of that, when you travel with three or more people you get discounted prices. So passes make a lot of sense for families traveling together. We have the seniors who benefit from special fares—most passes have a senior fare that has a significant discount compared to the regular rate.
MB: How has Rail Europe’s technology improved over the last few years?
ZB: Technology is really key when it comes to booking rail travel because we both connect to one inventory, and we have relationships with more than 50 European rail carriers. What we’ve focused on over the last few years is to establish direct connections with the inventories of all the main European rail carriers…that allows us to provide a comprehensive offer to travel agents and customers.
What we are also seeing is that mobile services are becoming more and more important. Our mobile sales doubled in 2015 compared to 2014 and we are expecting that kind of growth to continue in the coming years. We noticed that people, while they travel, like to go back to raileurope.com and continue making additional purchases while they are in Europe. So really, mobile is the technological frontier that we are going after. We just launched a new version [of our app] at the end of last year…the app is really something that is going to be the travel companion for people while they travel in Europe.
MB: What do you think it is about Rail Europe that allows the company to maintain its position as the largest distributor of European rail products worldwide?
ZB: I think it’s two things. I think it’s our experience and everything that comes with it. Rail Europe has had a presence in North America since the 1930s, and this experience allowed us to foster the staff with an unmatched expertise in European rail. People in our contact center and our customer care center in Chicago know more about rail and European rail than many people in Europe, and that’s really something that comes with being in the business for a long time. Plus, we have long-established relationships with key players in the market—travel agents, consortias, etc.—and I think that really is one of the biggest strengths of Rail Europe.
For more information, visit raileurope.com.