Simon McLean, Click Travel’s managing director, talks all things trains and technology, six months after the launch of the travel management company’s (TMC) entry into the rail ticketing market with Open Rail and Takethetrain.com.
Why did you decide to get into rail?
At Click one of the big things we do is content application. We’ve got our own technology platform that runs everything we do – from the software that our agents use when helping people on the phone, to the online tools that we deliver to clients, it’s all our own. It means that everything is beautifully consistent and controlled. One of the core parts of it is content application, and to be honest it’s probably the number one reason behind our success and our growth.
When you do a hotel search for example, we connect to lots of different channels to get availability. Yes, the GDS is one of them, but then there will be booking.com and laterooms and all of those different channels that we connect to. We do the same in air. What that does is give our clients access to more properties, plus more and ultimately better rates. For example, Holiday Inn Birmingham will have a different rate on booking.com than it will on the GDS. It’s about delivering value to the clients.
Rail however is very very different, because there’s only one UK rail network. All the fares are regulated, so it doesn’t matter which provider you have it’s all the same fares and there’s only one source of availability – the national reservations system. Aggregation doesn’t hold any benefit to UK rail.
What we realized, in our mission to deliver value to clients, is that we were connecting to the UK rail network through a third party, and they did was add a massive layer of cost. There’s a lot of talk about Train On Departure charges (TODs) in the market at the moment. If you look at what the third parties charge for TOD it’s ludicrous. It’s a huge, massive wedge of cost that TMCs and other agents have to either swallow or pass on to their client.
The TOD system is centrally run by the rail industry. It’s a universal system available to all ticket issuing systems and all the train operating companies – it’s run by the rail industry itself. There is a huge amount of cost to run the thing and that cost is absorbed by the train operating companies, but everybody that uses it pays a fee to do so. So every time Open Rail issues a ticket via TOD, we pay a fee. Every agency out there will know exactly what the fees are because ATOC are quite open about it. Where the discrepancy comes in is that the fee that they pay is less than £1, but a lot of the ticket issuing systems are charging £4 upwards. There’s a huge difference in the raw costs being paid by the ticket issuing systems and what they’re selling it on for. Why that is, you’d have to ask Evolvi and Thetrainline.
It felt to us a little bit like we didn’t have a choice. It’s us or them, and we both charge about the same, so take it or leave it. Your clients are demanding ticket on departure, so what choice have you got. That was the trigger behind starting to build our own rail platform. We could see that if we removed this huge layer of cost it would deliver better value to our clients. Also we were very intrigued by the B2C proposition.
Traditionally there has only been Thetrainline, and Raileasy came in a couple of years back, but there weren’t many in a huge market. ATOC say by 2012 there will be £13 billion of online ticket sales annually.
When did you start building your rail platform?
We started a couple of years back. The first time we ever got in touch with ATOC was in 2004, just to have a look at the idea of building a platform. We walked away from it then, because it’s an immensely complicated business to get into and there is a lot of red tape. We basically couldn’t nail it down to how much it would cost or how much time it would ever take. We left it alone then, and came back to it a few years later when we felt we were in a better position. Since then, it took us two years to get it to market.
Is that a long time in terms of the development of new technology?
It was a hell of a lot longer than we wanted it to take, which again is due to the complexity of rail. The software side of it is relatively straight-forward. There are lots of different companies involved in how you put a rail system together, and they don’t necessarily talk to each other or correlate with each other. There’s a lot of figuring out you have to do for yourself.
That’s why it’s so difficult to get into, because even when we finally did pull all this together, when we started the project we had no idea how long it would take or how much it would cost. We assigned a budget to it, but it was a bit of a finger in the wind. It was a huge risk for us. We know that other quite substantial companies have attempted it – some have walked away, others have built at lot of technology and never got them to market. It’s that kind of business.
The platform, which is called Open Rail, went live at the end of February. It was launched at the Business Travel and Meetings Show. When we finally made it, we did have a bit of a party when our first ticket came off – the ticket is on a picture frame on our wall.
Where was it for?
It was from Birmingham New Street to Birmingham International. We ran down to New Street and tapped in the fast ticket reference to get it from the machine.
And how was the transition?
We expected quite a slow transition over, but it’s actually gone quite quickly. People are moving over from Thetrainline platform on to us. The majority of our business traffic is now going through Open Rail.
Can your clients choose whether they use it or not?
Yes. In tender situations now people are often adamant that they want a certain platform, and we can therefore give it to them. Commercially, it doesn’t make a lot of sense to, hence why most people change. We still have a very good relationship with Thetrainline and I don’t see that ever changing.
And Takethetrain.com is using your rail technology with a consumer face?
Yes. Open Rail is the ticket issuer. Click Travel is the corporate face for Open Rail, and Takethe train is the consumer face, but underneath it’s absolutely the same. When you type in a search on Takethetrain, it’s using the same technology as our clients at Click Travel.
For Takethetrain, people often ask us how we managed to get such an amasing domain name. It’s because we bought it a long time ago. We always had the idea that we would get into online rail and the Open Rail project enabled us to do that.
And Ferdinand the Frog – where did he come from?
We have a branding company in Birmingham, and they’re an amazing bunch of people. We had the name Takethetrain and they came back with some ideas. We all fell in love with Ferdinand. His Facebook page is a bit out of a roaring success – facebook.com/ferdinandfrog. He’s quite cheeky. A lot of people come on and just say I love you Ferdie Frog.
How have clients reacted to your new technology?
They love it. A lot of our clients use us because of what we’re doing with technology. The TalkTalks of this world came to us to get very high levels of online adoption, and specifically for the tools – things like the degree of customisation that we can do for them, and the content. They are all excited every time we do a big announcement about a new piece of technology, and I think they can all see what our vision was with rail – that it’s about delivering value for them.
Our clients are all aware of the TOD fees. We had a tender last month, and the document actually said please explain your TOD costs. Clients are very aware of the costs of running rail platforms. So, there was a lot of excitement about it because they could see exactly why we launched Open Rail. I suppose it validated their decision to use us, in a lot of cases. A lot of people could go back to their bosses and say this is why we chose Click.
Why does Click Travel place such importance on having its own technology?
Some 94% of our transactions are now online. In other words, our entire business is driven by technology. I find it amazing that people aren’t doing the same as us, because why wouldn’t you want to be in control of the thing that is driving the business? It’s really strange. We’ve actually reclassified ourselves as a software company – we’re not down as a travel agent anymore. That’s what we do now. We are a software business. We deliver software to clients.
It’s like running a restaurant and outsourcing your kitchen. You wouldn’t do it, because you want to be in control of the thing that determines whether your customers think you are a success or not. Our customers mainly interact with us through our online sales and therefore we need to be in control of it. We’re big control freaks, in that respect. Controlling the entire user experience is very important to us.
I find it bizarre when bigger TMCs tell customers to pick an online system and say they will service it. I think how can you possibly deliver an amazing service when someone just turns up and says here’s the tool I want to use, can you sort it out.
Would you consider licencing your technology for other TMCs to use?
Our shareholders keep asking us that! We have considered it. Our entire software was built from the ground up to support multiple agencies, so it could happen. We’ve chosen not to do it because it fundamentally changes your business when you’re supplying software to third parties and therefore supporting them. One of the real strengths of our business is that the software is built specifically for us and the way we do business. And as soon as you let third parties use it you end up compromising. If you look at any of the online systems out there they are full of compromises, because one agency wanted one thing, and another wanted something else.
Click is highly tuned to us. A lot of the back office processing is very specific to the way we want to do business. It’s good. When somebody goes online and they click that button, everything through issuing tickets, delivering, raising invoices, collecting money from the bank, it’s all touchless, which is what makes us so competitive.
Some TMCs have been critical of such high use of technology and online booking tools in the travel management industry, because it depersonalises the experience. What would you say to them?
I understand that point of view, in that the transition into online definitely does depersonalise the booking experience. It’s quite amazing sometimes when you get tenders. First they say they want a very personal service, and in the second breath they say they want high online adoption. The two don’t necessarily tie together.
We still work in the small team scenario, where all of our clients are allocated to a small team, but some of our clients have such little interaction with them that they don’t necessarily get to know them as well as they did in the past when it was all offline. It is a challenge, and we do various things like use Livechat – our online messaging system. It is used extensively by clients, more so than phone calls in some cases. That helps us interact and gain a little bit of that personal touch.
But the bottom line is its clients that are doing the driving. We can’t tell clients that they want a personal service, and they should forget this online stuff. They’re saying they want the business online because it’s more efficient and it’s cheaper. Online takes the cost of travel down. That’s what everybody wants.
Similar Posts:
- TSA: Body scans will be more private
- £3 million win for FCm
- The nagging concerns over rail
- BSI upgrades meetings management technology
- Easyjet introduces business travel sales team
