Why are train tickets in the UK cheaper when booked in advance?
Posted by Initial_Clock_945@reddit | AskUK | View on Reddit | 45 comments
[removed]
Posted by Initial_Clock_945@reddit | AskUK | View on Reddit | 45 comments
[removed]
Just_Juggernaut3232@reddit
Because of privatisation.
InternationalRide5@reddit
Well before privatisaton, British Rail had White Days and Blue Days, various Savers with restrictions, and cheap excursion fares valid only on specific trains.
Scarred_fish@reddit
This should be the top answer.
The supply and demand reasons are correct of course, but the only reason they are relevant is privatisation.
timeforanoldaccount@reddit
So British Rail never had peak fares or Advance fares?
I'm sorry but you clearly know nothing about what impact privatisation actually had on the rail industry.
Scarred_fish@reddit
Yes of course they did, but that's very different to the dynamic pricing we see now.
timeforanoldaccount@reddit
Err, no. If offering Advance fares is dynamic pricing then how is that different to the "dynamic pricing" that BR did when they offered Advance fares?
Scarred_fish@reddit
Offering advanced fares is not dynamic pricing.
The two concepts are completely different.
timeforanoldaccount@reddit
Okay, please explain what you mean by dynamic pricing then. Because it doesn't really exist in the UK rail industry unless you're talking about Advance tickets.
Scarred_fish@reddit
Dynamic pricing is (at an extremely basic level) adjusting prices live based on demand.
Advanced fares are just that, advance fares.
Currently in rail travel there is a mix in order to attempt to make as much money for shareholders as possible. It's the worst of both worlds.
timeforanoldaccount@reddit
I know exactly what dynamic pricing means. But you clearly have no idea how pricing works in the rail industry. Whereas I do; it's my job to understand it.
The mere fact that you think "Advanced fares" (which don't even exist - it's Advance Singles if that's what you mean) are only for before the day of travel, and that you think "all fares" are dynamically priced, tells me that.
Walk-up fares (e.g. Off-Peak or Anytime) are not dynamically priced in any way. They are the same price no matter when you buy your ticket. It's either that or an Advance ticket, which could be seen as a form of dynamic pricing but really they are a discount on the 'normal' price.
I'll be the first to agree that pricing in the rail industry is terrible. But that has nothing to do with dynamic pricing, which only exists to a very limited extent (Advance tickets).
thecuriousiguana@reddit
Whilst this is true, there's a lot of cross subsidy going on that would remain with a publicly owned service. It's not about just maximising profits, but demand management.
Let's say you run one train an hour into the city.
The vast majority of people want to travel to arrive at 8.30am and leave at 6pm to align with work hours.
This might mean that there's not enough seats on the peak train and few people on the 9.30 arrival and 7pm trains. So they do two things
Firstly the peak train is more expensive. This discourages people from using it unless they really have to. This frees up seats for people who need it.
Secondly the off peak are cheaper. This means flexible people are more likely to choose a train that spreads demand.
But running trains is expensive. All those services mid morning that don't have many on them aren't making enough money to make that particular service worthwhile. But the train company needs to operate it otherwise there isn't a regular service. No one would be happy with trains running only before 10am and between 6 and 7pm.
The peak fares are priced not to just cover the cost of that service but offset the loss of the others too. They do it to encourage use of different services and to spread the demand over a longer period. It's the only sensible way.
Scarred_fish@reddit
The issue with that model is that, for most high capacity routes, there are alternatives.
If you assume everyone will take the train at whatever time works for the financially, then that's fine, but what happens is people reluctantly take a bus instead, for example, so the potential fare is gone. Bus services are also scalable, when a bus is full, they can often add another.
My work is related to this (road design and maintenance, more need for busses over trains creates issues for us) and the most fascinating presentation I've seen is the flat pricing model and how it can level off in a relatively short time.
The short version is that with a flat price, every train is full, maximising income. People adjust to maybe having to wait a while, but don't mind because they know exactly what it will cost.
It's logical, but will cause overall income to dip sharply until the travelling public adapts, and shareholders don;t like that.
thecuriousiguana@reddit
That's genuinely very interesting as it sounds counterintuitive.
But I guess "the trains are packed" rather than price becomes the factor that tempers demand
Scarred_fish@reddit
Yep.
It also allows for more effective budget planning.
Take a hypothetical 12 seat carriage. Sell every seat at £10 and it is always full. £120 income.
Sell half at £10 then bump it to £20 and you may make £180, great. Or, you may only make £60 and lose the rest to an alternative.
What actually happens the majority of the time is you sell half of the remaining 6 tickets and end up exactly where you would have been had you sold them flat rate.
Except now you've pissed off your customers for no reason, hence this thread.
timeforanoldaccount@reddit
Hurr, durr, pRiVaTiSaTiOn.... err, no. How about doing some research first before going for tropes?
Don't get me wrong, privatisation has had a lot of negative impacts on the rail industry but this has nothing to do with it.
Amongst many other things, SWR (who operate that route) are already government owned. So it's the government you need to blame if you think this pricing model is wrong.
Just_Juggernaut3232@reddit
I blame the marketisation of the rail network, but yeah successive governments have been myopic as well.
timeforanoldaccount@reddit
Right, so we're getting closer to the answer. It's got nothing to do with privatisation itself but rather the government attitude to rail.
Just_Juggernaut3232@reddit
More a problem of dominant culture in train service provision due to privatisation of the rails.
timeforanoldaccount@reddit
Dominant culture? What are you on about...
Just_Juggernaut3232@reddit
You don't know what the term dominant culture means when talking about institutions and industries?
timeforanoldaccount@reddit
I know exactly what it means. I have no idea why you think the industry's dominant culture is relevant to this thread.
Just_Juggernaut3232@reddit
You don't think that an industry's dominant culture affects decision making within that industry?
libsaway@reddit
Why is it strange? That's how almost every capacity-limited market works. It's the same with theatre tickets, coaches, places, hotels.
Exact_Setting9562@reddit
Most theatres are the same price? It's pretty rare to see any offers on tickets unless I'm looking in the wrong places.
Robtimus_prime89@reddit
Some theatres on the west end will sell seats cheap on the last day or so.
They’ll be the odd seats which are left over (single seats or pairs which they might struggle to sell), or ones up in the gods/with restricted views.
Exact_Setting9562@reddit
I know the West End do - but there's going to be hundreds of theatres that aren't the West End.
DaveBeBad@reddit
Most theatres - even cinemas - have different levels of seats with different prices. Often the most expensive have the best views and/ or comfier seats.
Once the cheap ones are gone, you are left with the more expensive ones or going another day.
Exact_Setting9562@reddit
Oh yes I know that but the theatres near me don't reduce prices. They'll print a program and that's the price a year ahead or the day before.
cuppachuppa@reddit
But theatres have a finite number of seats very few last minute walk-ins. The aim of a theatre is to fill every seat.
Trains will run whether they're full or empty.
nivlark@reddit
The empty trains will still have cheap tickets available, to try and encourage more people to use them. Just like theatres sometimes do e.g. for matinees.
ResplendentBear@reddit
Price discrimination. Bit of GCSE economics there.
Charge the commuters more, they have jobs and can afford it (in theory).
Advance tickets cost less because they may not be used. Plus they can be used for advertising. "Travel to Glasgow for £14 with Southern trains (£232 if bought on the day".
timeforanoldaccount@reddit
It comes down to price segmentation and revenue maximisation, the same as almost anything else in the travel industry.
They could choose just to offer the Anytime Single, which is £57. It's valid on any train and can be bought at that price on the day - but you'd probably find that too expensive and would drive or take the coach instead.
So instead they choose to offer cheaper fares which have more restrictions, like having to take the exact train you chose and not being able to get a refund. They offer a set number of those fares (Advance tickets) at each price, and sometimes they'll also remove the cheaper ones as you get nearer to the day of travel.
This makes economic sense because the further in advance you book, and the more flexible you are on which train you're willing to tie yourself to, the higher the likelihood that you're a price-sensitive leisure traveller. Whereas if you're buying a ticket on the day of travel you're more likely to be a price-insensitive business traveller.
MerryWalrus@reddit
You should ask it the other way around.
Why are tickets on the day so much more expensive? Because at that point you have no choice but to pay.
cuppachuppa@reddit
You've got a point OP. It's not like they want to sell the tickets early in order to decide whether or not to run the train. And it's not like you're booking a particular seat.
All trains will always run, so it's just penalising people who travel last minute.
Initial_Clock_945@reddit (OP)
This is like a trap, just to punish those who are planning to travel temporarily?
SnooRegrets8068@reddit
No it helps them fill the train in advance
Obvious-Water569@reddit
It's to price gouge the people who need to get somewhere last minute.
Most travel works this way. So do hotels.
Initial_Clock_945@reddit (OP)
Yes, I think so, but it is not reasonable.
martin_81@reddit
Don't pay it then.
grafeisen203@reddit
Because they charge you as much as they think they can get away with.
They want to fill seats (and then stuff the train to bursting until people start collapsing from heat exhaustion or having claustrophobic panic attacks) but they also want to charge as much as they possibly can for each ticket.
So the more tickets that get bought for a particular service, the more expensive further tickets get.
SarkyMs@reddit
Because you might change your mind and not travel. Therefore they've got the ticket price for doing nothing.
Travel_Uk@reddit
To maximize revenue, especially on long-distance trains where prepaid season tickets are less common—railway companies often use a strategy called “yield management.” They sell relatively low-priced tickets to attract more passengers and fill seats, while still maintaining profitability.
These cheaper tickets usually need to be purchased well in advance, sometimes up to three months before departure. This allows train companies to receive the ticket revenue months ahead of time, even before they incur operational costs like fuel and staff salaries.
Such tickets are typically valid only for a specific train. By offering different prices for different services, train companies can guide passenger distribution and manage demand more effectively. If you want to change your travel time, you’ll need to pay a fee. If you end up not traveling, the ticket is non-refundable.
Lower ticket prices come with certain restrictions. However, I noticed that a ticketing app called TrainPal offers free cancellation on the first booking for new users. So if you need to book in advance but your plans are still uncertain, TrainPal might be worth trying. However, there is only one chance, which is useful for new users and not for old customers. I hope my answer can be helpful to you.
pinagain@reddit
The answer to nearly every question there is supply and demand.
Closer to the travel date, in theory, there will be less supply and likely more demand and so higher prices.
Lots of people travelling, again less supply and more demand and so higher prices.
cgknight1@reddit
It is to manage capacity and to push people to travel at least popular times.
There is also a complex mishmash of govt and regional funding influencing prices.
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