Amtrak Fare Changes Are Good News For Passengers

By Jim Mathews / President & CEO

Amtrak created quite a ripple this week when it announced that sometime “this Fall” they’ll be rolling out a simplified, and in our view long overdue, new fare structure, generating a flurry of news stories and more than a few emails in my Inbox.

I got a detailed briefing from the directors who have been working on this project and based on that briefing I think that on balance not only is this good news for the average Amtrak traveler, but it reflects a reform your Association has sought for many, many years – a wider range of more affordable fares and less-onerous terms for refunds.

Amtrak announced this week they're getting rid of the current three-tiered set of fares (Saver, Value, and Flexible) and replacing it with just two -- Value and Flex. In place of “Saver” there will be ad hoc pop-up sales on specific routes during specific time periods.

At the same time, they're adding more fare buckets and, crucially, the additional fares will be mostly at lower prices. Cheaper fares will have tighter refund restrictions but are nonetheless significant reductions in many cases across the board.

Significantly, passengers will be able to “buy up” to a fully refundable fare for just a few dollars in many cases. That’s a dramatic difference from what we see today.

For example, today if I go on to the booking site and look for a 7:38 am departure from Washington, DC, to New York, I’ll get a box that says “Coach from $28” – only to find that once I open the fare options, I get a choice of $28 nonrefundable in Saver, $104 for partially refundable in Value, and $185 for fully refundable in Flexible.

In other words, I can snag a $28 coach seat, but if I want any flexibility at all I need to cough up $157 more on top of that.

Unsurprisingly, Amtrak sold very few $185 seats. On the other hand, they also didn’t sell enough $28 seats, because they were too inflexible. Worse, if you wound up needing to cancel you didn’t get your money back but instead got an eVoucher that is often a pain in the neck to apply to a future trip.

Under the new fare model, that same trip would have two options: $28 for a 75 percent refundable Coach seat in Value, or for just two dollars more I can book a fully refundable fare at $30 in Flex. In this kind of pricing structure, passengers are probably more willing to pay $2 for the refundable option and as a result Amtrak sells a lot more seats at $30 than they did at $28. That’s more revenue for Amtrak, but it’s also a much better deal for passengers who don't have to pay four or five times the original fare just to get some refundability.

Without getting too deep into the mathematical weeds, the way they’ll do this is to reduce categories but add many fare levels to today’s system.

Right now, across the country you’ll see anything from one single flat price (on a state-supported route where the state has not considered a complex pricing model) to five prices – “buckets,” for those in the know – in some states and on the long-distance services, and then a maximum of eight buckets on the Northeast Corridor, on some state services, and on some long-distance trains. The objective is to get to as many as fifteen buckets in the two new fare families, and that gives you the room to offer more seats at the lower fare levels needed to spur demand and get people out of their cars and on to trains.

“This streamlined fare structure with more affordable and flexible fares is part of Amtrak’s continued commitment to upgrading the customer experience at every step along their journey,” Amtrak President Roger Harris said in Amtrak’s press release announcing the impending change.

In its press statement, Amtrak noted that very often Flex fares will be available at lower prices than currently offered, and when the one-off fare sales do happen, they’ll be at an even deeper discount than the newly lowered fares in Value. And if your travel plans change and you have to get that 75 percent refund, they’ll give you your money back on your original form of payment instead of a clunky eVoucher.

Personally, I detest eVouchers. The very few times I’ve had to use them, it typically involved searching in my email to find the eVoucher message from Amtrak so I can get the voucher number to input for my new trip. Ugh.

There’s more good stuff potentially coming soon. If you wanted to, say, travel in Coach from Syracuse to Chicago and then book a Sleeper from Chicago to Seattle, the fare right now is bundled together. With the rollout of the new system, you’ll be able to book multi-segment itineraries much more easily with the different prices for each segment clearly displayed. If you’re an Amtrak Guest Rewards member (and I hope you are!), you’ll be able to use your points to buy any fare – no more restrictions on using points for low fares or sale fares.

There’s even talk of expanding the highly popular “Night Owl” fares now on the Northeast Corridor (five dollars to ride in Coach on a three a.m. departure from New York City!) to other parts of the country. And finally, Amtrak will be able to show you what airlines have been able to show you for years – pricing displayed across multiple days, so that if money is tight you can see what happens if you choose to leave on, say, a Sunday instead of a Monday.

As is always the case, execution is the key to making a good idea great. A lot of technological pieces will have to come together on the website and in the smartphone app to make sure passengers get a good experience with the new fare rules. I happen to know that many of the technical team members will be working on the back-end IT processes for these changes this weekend. So what that means is that first the tech changes have to happen on the website and be successful (in other words, don't break anything). Then, once everyone knows the back-end changes are working Amtrak will be able to roll out the new pricing structure and the new fare rules will make their debut.

Another caveat many passengers forget: Amtrak doesn't really set the fares on the state-supported services, the states do. The states who are paying for Amtrak to operate their trains can decide what sort of pricing gets adopted. However, Amtrak has spent a lot of time working with the states to get them excited about the new pricing model and most passengers can expect to see benefits from this new model where they travel.

We're eager to see this get done so that our members and the traveling public can enjoy more access to trains as a reasonable travel choice. Keep your fingers crossed this weekend for a pain-free website upgrade!