Silver Star Downgrade and Diner Discussion

Arlington wrote:Economically, the answer has to be more passengers served per diner to better spread its costs and better-utilize its crew. The goal should be to get 3 or 4 sleepers worth of passengers using 1 diner somehow. Speeding up processes, more pre-prepared food, fewer choices, getting more "turns" per table, spreading the peak load, etc.

More passengers served, yes.

But I'd argue with most of the others.
Get the coach passengers using the diner. Start by making sure it's clearly advertised to coach passengers. As I've said in a dozen years of taking the Crescent, perhaps 50% of the time have they said anything to coach passengers. And since they folks will be paying for their meals (as opposed to sleepers whose meal costs are already factored in) that's cash straight to the bottom line.

Speeding up the process, maybe, but again, I want a relaxed atmosphere, not one where I'm feeling rushed. Again if I want that, I'll simply fly.
The last thing I want on a diner is MORE pre-prepared food. Again if I want that I'll go to the cafe or skip the train all together.
Fewer choices? There's already a fairly minimal menu. I don't think reducing 5 dinner items to 4 or 3 is going to help.

Overall, in my experience, your best option is making sure to keep the diner filled and the easiest way in my opinion is making coach passengers aware that it even exists. Many in my experience don't realize that.

In addition, the new diners should reduce maintenance costs which will be a big win.

But realistically, you rarely cut your way to profitability. You increase sales as your way to profitability.

Greg Moore wrote:But realistically, you rarely cut your way to profitability. You increase sales as your way to profitability.

The "you can't cut your way to profitability" mantra comes from the common experience in business where losses might be 5% of revenue, and shareholders scream because they want profits of, say, 10% of revenue. You, know, revenue of $80m, but costs of $84m, so a solution might be to grow revenues by 15% to $92m. That is common in business, and there, sure, give revenue-enhancements a try.

The LDs are exactly in that "rarely" case. Revenue of $40m but costs of $80m, and losses equal to 100% of revenue. This *is* on the rarely end of rare (99% of the economy never gets that desperate) In this case, to close that gap by just $10m, you either have to grow revenues by 25% (hard even in the best of times) or cut costs by 12%. When costs are double revenue, even random chance favors that the solution is on the cost side.

{Worse, given that TOTAL sleeper revenues on the Star were ~$8m and on the Metor were $12m, to improve net cash by $10m, it isn't just a problem of trying to DOUBLE (100% sales increase) sleeper revenues through deluxe stuff it is a question of havingn to TRIPLE (200% increase) sleeper revenues (because those new people cost money to accommodate) (crazy hard, even if 4-sleepers-worth of rolling stock could share the 1 diner we have), and WORSE, you tell me that every time we double sleeper ridership, I have to add a diner. Can't double fares in the sleeper. Can't double ridership without doubling costs (that additional diner will be even less busy, and less-productive, and less-likely to snag a coach customer than the first).}

And growing revenue (or staying about static) on the Star is quite plausible. Lower sleeper prices may stimulate demand on top of the diner-cost savings.

Arlington wrote: Get the coach passengers using the diner. Start by making sure it's clearly advertised to coach passengers. As I've said in a dozen years of taking the Crescent, perhaps 50% of the time have they said anything to coach passengers. And since they folks will be paying for their meals (as opposed to sleepers whose meal costs are already factored in) that's cash straight to the bottom line.

Speeding up the process, maybe, but again, I want a relaxed atmosphere, not one where I'm feeling rushed. Again if I want that, I'll simply fly.
The last thing I want on a diner is MORE pre-prepared food. Again if I want that I'll go to the cafe or skip the train all together.
Fewer choices? There's already a fairly minimal menu. I don't think reducing 5 dinner items to 4 or 3 is going to help.

Overall, in my experience, your best option is making sure to keep the diner filled and the easiest way in my opinion is making coach passengers aware that it even exists. Many in my experience don't realize that.

In addition, the new diners should reduce maintenance costs which will be a big win.

But realistically, you rarely cut your way to profitability. You increase sales as your way to profitability.

My experience on the Silver Service is that there are many coach passengers who use the diner and pay. It seems that Amtrak is approaching this with the attitude that the diner is for sleeper passengers only.

Anyway, I have seen on occasion that the diner makes announcements that take out meals are available. This isn't a consistent thing but has happened and would generate more revenue.

Also I think the new Viewliner diners would not have to be closed down during the engine change in DC. They lose one meal sitting for this, so maybe the Meteor would be able to handle an additional sleeper with one additional rotation.

So what does a diner cost?
- Rolling stock
- Staff time
- Food

Staff of 6 x 25/hr x 8hrs x 2 trains/day x 365 = $876,000. Call it $1m with overtime.
Food for 30k customers (Star) or 40k customers. Call it $30 per, another $1m in cost
Cost of staff rooms? call it half a Viewliner? = $1m per year. Call it fares foregone, maybe 1/4 of revenue? $2m per year

So far, thats pushing $3m and $4m per year DINER ALONE -{edit} to support sleeper passengers who are only bringing in $8m to $12m per year., and I haven't put in more subtle costs like Diner (itself) stock acquisition, equipment, maintenance, and haulage (though a number like $1m all-in is probably a good guess on a train whose costs are $80m)

When we see on the SIlver fares go down by $100 to $200 per room, the reality is probably that COSTS are going down $200 to $300 per room and that Amtrak is passing on half of the savings to Star Room users, and "pocketing" the other half (after all, Amtrak wants to come out financially ahead on this, not just break even) Something like that.

Arlington wrote:

Suburban Station wrote:there's another key to diner utilitization...more hours of service

What does that look like today? It ought to be possible to spread dining times out just because the "normal" meal schedule gets nudged by you either getting to bed late or early and having to get off the train early or late. That's something you can't do when everybody's getting off in Chicago (Picturing the Capitol Limited, they've all got to have their breakfast in Indiana before they get off), but something you can do if they're spread between Jacksonville Orlando and Miami

Breakfast 6:30 am - 10 am (No Reservation) 9:30 am
Lunch 11:30 am - 3 pm
Dinner 5 pm - 9:30 pm

http://www.amtrak.com/servlet/Satellite ... men=Dining" onclick="window.open(this.href);return false;
Breakfast might be fair and they do need to change over. I think there is more promise for the rest of the day. Dinner service maybe runs the same but the dining car remains open until 11:30 PM with a bar menu (burgers, beers, etc) and is first come first serve. you also might want to start dinner a bit earlier or run lunch a bit later...or find a way to service a limited menu between 3 and 5 pm.

Arlington wrote:So what does a diner cost?
- Rolling stock
- Staff time
- Food

Staff of 6 x 25/hr x 8hrs x 2 trains/day x 365 = $876,000. Call it $1m with overtime.
Food for 30k customers (Star) or 40k customers. Call it $30 per, another $1m in cost
Cost of staff rooms? call it half a Viewliner? = $1m per year. Call it fares foregone, maybe 1/4 of revenue? $2m per year

So far, thats pushing $3m and $4m per year DINER ALONE -{edit} to support sleeper passengers who are only bringing in $8m to $12m per year., and I haven't put in more subtle costs like Diner (itself) stock acquisition, equipment, maintenance, and haulage (though a number like $1m all-in is probably a good guess on a train whose costs are $80m)

When we see on the SIlver fares go down by $100 to $200 per room, the reality is probably that COSTS are going down $200 to $300 per room and that Amtrak is passing on half of the savings to Star Room users, and "pocketing" the other half (after all, Amtrak wants to come out financially ahead on this, not just break even) Something like that.

Food should be roughly a third of your dining car revenue. the problem is that not only is there direct food expense but there are staffed commissaries at either end of the train. should that cost be included in the one third figure or not? I think it has to be, it's part of the cost of getting the food onto the train the same as a food delivery is part of the cost of getting the food to a restaurant. extending dining car hours should increase revenue per on board labor hour and presumably, at the margin, each additional meal sold is profitable reducing your overall loss...and one classic approach is also to sell more alcohol, high margin, low cost.

Gotta say that I think the nickel and diming does diminish the travel experience, even when it's little things like having coffee in the sleeper. The attendant on my trip apologized for not being allowed to have the complementary coffee and juice outside of 6 am to 11 am. In the diner, I did also notice the missing flowers - admittedly a minor thing but it did offer a touch of class on my last journey aboard the same train.

The thing is I don't think people realize how good they have it. Sooner or later I can see continental breakfasts and even more limited lunch/dinner menus become more prominent.

Matt Johnson wrote:Gotta say that I think the nickel and diming does diminish the travel experience.

It isn't nickel and diming if eliminating it entirely saves $100 to $200. You,personally (and current fans) experience it as a loss because you think of them as things being taken away. Starting from nothing, the question is, HOW MANY PEOPLE would ride if prices were lower, and how many would choose these nice touches if they knew it would cost $100 to $200.

Fine, let's say that 100% of current Star food-sleeper customers switch to other modes and never come back, not in coach, non on the Meteor. Exactly $8m of revenue is at risk on a train that costs $80m to run. But two sleepers and a diner could be cut off, saving something like $6m per year(for all 3 and their crew and op costs). I'm thinking $2m in net revenue is at risk.

Now consider that some will be recaptured on the Meteor where they have very low marginal costs (the train's already running), I bet it is at least 25% or $2m, so you're only down $1m, max. If 50% are recovered on the Meteor, that's $4m in revs and maybe $2m in marginal costs (cause they go in now-empty berths)

Also consider that some will downgrade to Star or Meteor coach, if 1/4 do at 1/2 prices, that's $1m recovered at close to new costs. Now you're even or ahead $1m.

Now add back the sleepers, and see if, like business class on the Palmetto, you can attract a decent chunk of premium fares. Is it enough to cover their costs and make a profit? Probably so. Cooler still, you can add as few sleepers (1) or as many (4?) as the market demands, and nobody's going to tell you have to add a diner or block out crew rooms. Somehow you should be able to tune that to win back another million or three. So you're $2m to $4m ahead.

I defy you to come up with a diner-sleeper scenario that puts you $4m ahead. You'd have to grow sleeper revs by at least 50% / $4m (to $12m assuming EVERYTHING had no cost) Can you think of no-cost ways of boosting sleeper-diner traffic by what amounts to a whole additional Vewliner (from 2 to 3)? No. Mostly we get added costs: an additional sleeper, its crew, fancier food, fresh flowers. Or you dealing marijuana to effectively boost the fares by 50% and keep pretty much the setup you have.

And the scenarios for a no-diner win are better than that. Let's say that 80% of the Star's customers are recaptured (in Star Coach, Star Room, or Meteor Room), that leaves plenty of space for coach passengers to upgrade to Rooms and for non-users to try a long train trip for the first time.

Cutting free coffee is nickel and diming, cutting a diner is not

These days, airlines are focusing on upgrading their premium cabins; "discount" airlines such as JetBlue are adding first class or the equivalent; and even VIA in Canada is focusing on upgrading the transcontinental Canadian train.

Conversely, Amtrak is cutting back on premium-class services.

It seems to me as though Amtrak is the odd man out here.

Also, why can't Amtrak just have pre-prepared meals rather than paying a full dining car staff to make things on board? Lunch recently on US Airways (in first class) was great, and I'd be totally happy with that: prepared in advance and just heated up on board. The space required for that kind of preparation is small, too.

SwingMan wrote:The thing is I don't think people realize how good they have it. Sooner or later I can see continental breakfasts and even more limited lunch/dinner menus become more prominent.

I'm not sure this is the case. I think people on this forum are railfans, and probably put more emphasis on eating in the diner as a nostalgia thing, than your average traveller. On my travels , I sat with sleeping car passengers in the diner, who commented that they really didn't want to visit the diner 3 times a day . I think seperating the meals out, and charging the real cost for them, on a train would also be a good experiment, to see what value passengers put on them .

SouthernRailway wrote: Also, why can't Amtrak just have pre-prepared meals rather than paying a full dining car staff to make things on board? Lunch recently on US Airways (in first class) was great, and I'd be totally happy with that: prepared in advance and just heated up on board. The space required for that kind of preparation is small, too.

That is the concept of the poorly received Diner-lite...which for the record is what I thought was going to occur with this train.

Arlington, you leave out a few things about the Star that Suburban Station and Chrsjrcj mentioned (more hours, the immense cost of multiple hands touching the food from beginning to end) but notably, the Star's sleeper were hardly empty. They are well represented during the year. You also leave out the Meteor is the only train that realistically carries connecting passengers from the south to the rest of the Amtrak system (and there are large numbers of connecting passengers.) Additionally, the Meteor bumps up its coach consist throughout the year. The Star does not do any of these things.

To me, the key of the huge dining car losses has always been the fact that even though the dining car crew is down to three, you STILL have cut your amount of passenger counts over the last several years. You have a full diner for 4 coaches (of which one is always for local travel) and two sleepers. Additionally, one of them has the crew now that the bag/dorms are gone. How many potential dining car users were chased away? The final user is the food is no longer what it used to be. The variety is gone and the prices have gone up.

On a personal level, I always liked the slumbercoach concept. What I would have loved to see is an order for slumbercoaches mixed with sleepers. If you could squeeze out another coach for a 300 coach passenger count, I think the dining car would perform better since some of them would use the dining car.

The only thing that remains to be seen is what happens if ridership of actually drops in both coach and sleeping cars. This happened back in the 90s.

David Benton wrote:

SwingMan wrote:The thing is I don't think people realize how good they have it. Sooner or later I can see continental breakfasts and even more limited lunch/dinner menus become more prominent.

I'm not sure this is the case. I think people on this forum are railfans, and probably put more emphasis on eating in the diner as a nostalgia thing, than your average traveller. On my travels , I sat with sleeping car passengers in the diner, who commented that they really didn't want to visit the diner 3 times a day . I think seperating the meals out, and charging the real cost for them, on a train would also be a good experiment, to see what value passengers put on them .

Strange, have to admit I've never encountered that.

Were these eastern or western LD trains?

Greg Moore wrote:

David Benton wrote:

SwingMan wrote:The thing is I don't think people realize how good they have it. Sooner or later I can see continental breakfasts and even more limited lunch/dinner menus become more prominent.

I'm not sure this is the case. I think people on this forum are railfans, and probably put more emphasis on eating in the diner as a nostalgia thing, than your average traveller. On my travels , I sat with sleeping car passengers in the diner, who commented that they really didn't want to visit the diner 3 times a day . I think seperating the meals out, and charging the real cost for them, on a train would also be a good experiment, to see what value passengers put on them .

Strange, have to admit I've never encountered that.

Were these eastern or western LD trains?

That was on the Builder between MSP and Chicago. I suppose they had been dining for a couple of days by that stage.
But my point is there is probably more emphasis put on the dining car experience by members here, than by the general public.
I thought the dining experience more akin to a cafeteria, than a 1st class restaurant.Perhaps the new viewliner diners would change that.