Why you often don't pay a premium to ride Acela

As much as I love the long-distance trains, because of where I live and where the people I most often visit live, the bulk of my train travel is along the Northeast Corridor, particularly Washington, DC to New York, and occasionally to Boston. Being somewhat price sensitive (though not enough so that I would opt for an intercity bus over the train), one would think that I would almost always be aboard a Northeast Regional as opposed to an Acela Express. Oddly enough, over the past two years, at the time I book (usually at least three weeks prior to travel, but sometimes closer), the price differential between Acelas and Regionals departing around the same time of day has not been that great — and there are times when an Acela is actually cheaper than a Regional! When I was booking a trip to Boston a week out recently, Acela came in only $20 more than Regional in one direction, and $10 cheaper in the other direction. Acela Express is supposedly Amtrak’s premier value-added product on the Corridor, responsible for the bulk of the revenues that exceed the operating costs of all Amtrak trains using the NEC. 

This phenomenon occurs because Amtrak uses a style of revenue management known as “bucket pricing,” meaning once a certain number of seats on a given departure sells, the remaining seats are kicked into a higher fare bucket. This is true systemwide, except for the handful of trains with unreserved seating and therefore flat fares (Keystones Philadelphia-Harrisburg, Hiawathas, Pacific Surfliners (except Business Class), and Capitol Corridor), and there are four or five buckets on most trains. The lowest fares that are generally possible to find on the NEC (except for when Amtrak offers special promotions or three-day sales) are the “Saver” or “E bucket” fares, which are only available on the Regionals and Keystones, nonrefundable and only available 14 or more days prior to departure, if a certain number of seats on a given train remain unsold. Currently, these fares are $52 Washington-New York (up from $49 as of October). From there, the next step up, which is more commonly available on Regionals, is the “D bucket” “Value” fare (generally $86 WAS-NYP). By contrast, the base fares (“D bucket”) for Business Class (the standard class) on Acela Express are $158 WAS-NYP. (I use Washington-New York as a sole example that can be interpolated to other city pairs on the NEC — fares are proportionally lower for shorter distances and higher for longer ones). 

But once a certain number of seats on a Northeast Regional sells (which can happen several weeks before departure, particularly at busy travel times (generally Friday and Sunday afternoons and evenings, especially on holiday weekends), the fares bump up to the B, A and “Full Y” buckets, which run between $125 and $200 between DC and New York. And because seats on Regionals are quicker to sell than those on Acelas, Regionals’ fares are often in the higher buckets while Acelas’ fares for the same city pairs on the same date and time range are still in the lower buckets. 

This phenomenon, which results in Acelas’ fares often being comparable to or lower than those of Regionals, could simply be due to the fact that the lower bucket seats on the Regionals sell more quickly, and thus Regionals’ fares reach the higher buckets before Acelas’ do. One would assume that once this happens, those purchasing tickets at that point would distribute more evenly between Acelas and Regionals given the parity in prices. But could the perception of Acela as an upscale product be leading more budget-minded travelers to opt for Regionals even when fares are comparable? Or do Regionals automatically get more patronage because they stop at stations on the Corridor not served by Acela and also extend beyond the Corridor to Virginia, Harrisburg and Springfield, MA?

Regardless of the reasons for this phenomenon, rail fares on the Northeast Corridor reflect the tremendous market for train travel between its closely-located cities that are well-served by transit, a market that is one of a kind in North America. With Amtrak under pressure to shrink its overall operating deficit, and with seating capacity on the Corridor limited primarily by the finite equipment pool, there is little chance of fares becoming competitive with those of the many discounted bus carriers plying the East Coast, which pay only a small fraction of the full costs of the highway infrastructure they use. Nevertheless, there are many reasons why the train is worth paying more for compared to the bus. So as long as the going rates for Acelas and Regionals at any given point remain equivalent, I, for one, am not complaining about the opportunity to upgrade without paying a premium.