WASHINGTON -- A strong U.S. economy and "chaos in air" were among
the several factors that contributed to Amtrak's record-breaking
sales this summer, according Amtrak president George Warrington,
who also credited travel agents for helping bolster the rail line's
bottom line.
"This past summer has been our best summer on record,"
Warrington said. "[August] was our best month in our history. Part
of that is attributable to an improved, better relationship" with
travel agents.
It was nearly two years ago that Amtrak, citing a $22 million
drop in agency sales, decided to cut agency commissions. It has
since altered that decision, a move that apparently has paid
off.
August sales hit a 21-year high, helping the rail line close out
the summer with a record $108.4 billion in passenger revenue.
Although specific agent tallies were not readily available,
Warrington said "travel agent sales, as a percent of overall sales,
are coming back at a rate prior" to November of 1998, when Amtrak
to cut basic travel agent commissions from 10% to 5%.
However, Amtrak held commissions on its leisure products to 10%.
Agents could earn up to 15% depending on sales volume.
In July 1999, Amtrak upped the commission to 16% on its long-
and short-distance leisure trains in a move partly designed to mend
its relationship with agents.
"Commissions did change under our leadership," Warrington said.
"And frankly, the trend line had been, prior to that [commission
rate] change, a declining share of business flowing from travel
agents, which prompted, in part, that adjustment.
"We've stepped back over the past year or so and revisited some
of those assumptions and made a conscious decision that we probably
didn't make all of the right moves at that time.
"We have worked very hard at that time to re-establish
relationships and revisit a lot of those assumptions with an eye
towards" offering agents more incentives to sell Amtrak, he
said.
For instance, in February, Amtrak teamed with ASTA for a
promotion that offered consumers a 10% discount on long-distance
and select short-distance leisure train travel only when they
redeemed a special coupon at a travel agency.
Amtrak also has had promotions that paid agents up to 16%
commission on special Explore America Fares, in an attempt to
encourage agents to sell more of its leisure products.
"I think we have demonstrated that we are serious about [working
with agents]," Warrington said.
"Historically, Amtrak has not worked as hard or as effectively
at building opportunities for travel agents as we could have. I
think, frankly, from a technology point of view, historically, we
have been difficult to deal with. In terms of support, we haven't
always been there.
"But I will tell you that is changing both in terms of ease and
simplicity of doing business with Amtrak for a travel agent. But at
the same time, everyone has to earn his or her keep. There are a
lot of opportunities for [agents] to earn their keep and more."
Just as Amtrak sees itself working more closely with agents in
the future, it also intends to create a strong bond with other
modes of transportation.
"We in the transportation business need to work more closely
through planning and established policy and process," Warrington
said.
"We as an industry should continue to see unprecedented growth.
That places a challenge on all of us to discard historical
short-term, competitive paradigms and really figure out ways to
work together in partnerships and alliance to grow marketshare
together and increase the size of the pie.
"Rather than behaving in a way which induces short term
competitive gain at a potential ally's expense," Warrington
said.
To that end, Amtrak has forged alliances with Greyhound,
Continental Airlines and Hertz. The partners' coordinate schedules
to allow travelers to "seamlessly" move from one mode of travel to
the other.
In that sense, Warrington said, the growing trend toward flight
delays opened new opportunities for Amtrak.
"That has been one of the consequence of the chaos in the air,"
Warrington said. "It has brought Amtrak and the carriers closer
together to find ways to better serve frustrated passengers."
Warrington would like to see the alliances expand so that, for
instance, Amtrak and Continental Airlines "plan and invest together
to make travel choices simple easy and interchangeable, because in
the end, this is about providing customers and guests with superior
service in a nonbureaucratic way.
"If we all plan and invest and design and execute together, we
will certainly serve customers better together and in a common
sense, seamless way," he said. "Happy customers are customers that
come back. That's what drives Amtrak's agenda these days."