How Tui wants to make the night train profitable

by time news

2023-08-21 04:00:00

Osnabrück The last beds were sold shortly before departure in Amsterdam. When the Tui City Express started its journey via Osnabrück to Prague last Thursday evening, it was sold out. Comfort on board is simple. The wagons are many years old, even though investments have been made in the cabin.

But everything is reminiscent of a youth hostel. The five-person cabin in the Eco class costs 140 euros per person, for the more comfortable two-person compartment with its own washbasin, 249 euros are due. And yet the night train is popular. Whoever walks through the almost 470 meter long train with its 700 beds, encounters a mixed group of passengers.

The Tui City Express has been running since July. It is operated by the Dutch start-up Green City Trip, with which the travel group markets the trains together. The start was last winter with the Tui Ski Express from the Netherlands to Austria – at that time without a stop in Germany.

From December 23, the Ski Express will also stop in Cologne, Bonn, Koblenz and Frankfurt. Then Tui will be responsible for selling all the beds on the train for the first time. The group is slowly approaching a business field that is not entirely new to the company. Many years ago, the Tui Ferienexpress even used its own vehicles. But then the low-cost airlines came, and Tui gave up the train in the early 1990s – due to a lack of profitability.

Now CEO Sebastian Ebel is daring to try again, this time without his own fleet. “It’s a huge opportunity for us,” he says, and makes it clear: “It’s not altruism.” In other words, Tui wants to make money with the hotels on the tracks.

Night trains have not been profitable so far

The competition shows that this is not an easy task. So far, no night train provider in Europe has made any money. The Swiss SBB needs state support, the ÖBB in Austria expects a maximum of a “black zero” in the current year. One problem: the trains stand unused during the day. It is difficult to use them in regular operation.

In most compartments, the beds can be folded up. But the more comfortable cabins with a washbasin, with some providers even with a shower, cannot be so easily repurposed. A second problem: more and differently trained staff are needed to run the hotel at night. All of this drives up costs.

>>Read also: With this strategy, Tui now wants to attract external investors

Not only did Tui decommission the couchette cars, but also Deutsche Bahn. She lost 30 million euros a year. “Trains are a complex system, more complex than aviation,” says Tui boss Ebel. His plan: in a package with hotel rooms or local activities, the train journey should be profitable.

“We believe that the night train can be operated economically together with the marketing of hotels,” says the CEO. You can also reach new customer groups. The night train typically appeals to people who are strictly budget-conscious when traveling – alongside those who take it for reasons of sustainability.

If the calculation works out, the offer should be expanded. Ten more routes are to be added over the next three to five years. Countries like Italy, France or the Scandinavian countries could be connected.

A slightly more comfortable two-person cabin

Guests in the Tui City Express should not expect great luxury.

That can be realized with the Dutch partner Green City Trip, but it doesn’t have to be, according to Ebel: “There are a number of interesting companies in this market in Europe that we can talk to.” People are already exchanging ideas.

Hessel Winkelmann, co-founder and CEO of Green City Trip, is ready for Tui. It has been agreed with a leasing specialist that 75 cars will be bought by the Dutch state railway Nederlandse Spoorwegen (NS). “We want to use them for day service, but we have options for purchasing up to 250 cars from NS.”

According to Winkelmann, part of it will be converted into a night train with modern equipment if necessary. Plans for significantly more luxurious cabins are already in the drawer. Winkelmann and his team are proceeding in a similar way to what Tui boss Ebel is planning. The beds are marketed together with hotels. One is already very close to profitability, says Winkelmann.

Despite all the enthusiasm for the night train, Ebel curbs expectations that are too high. The night train is an addition for Tui. “We don’t let this distract us from our core business, package tours.” But his goal is to connect different modes of transport. In principle, he could also imagine the bus.

More: Why Austria is so successful with its night trains

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