oltmannd CMStPnP You don't have to break even - only lose less money than Amtrak. And, think of this as a catering job for an existing shop - if you are thinking about the cafe.
CMStPnP
You don't have to break even - only lose less money than Amtrak.
And, think of this as a catering job for an existing shop - if you are thinking about the cafe.
If you are a food business - you aren't getting involved if your aim is defined as losing less on the service than Amtrak currently does. Your aim has to be making money.
Never too old to have a happy childhood!
BaltACD oltmannd CMStPnP You don't have to break even - only lose less money than Amtrak. And, think of this as a catering job for an existing shop - if you are thinking about the cafe. If you are a food business - you aren't getting involved if your aim is defined as losing less on the service than Amtrak currently does. Your aim has to be making money.
Right. It might require a subsidy. You have to structure the contract in such a way that the service provider has a profit motive. But, in the end, it loses less money and pax get better food.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
oltmanndYou don't have to break even - only lose less money than Amtrak. And, think of this as a catering job for an existing shop - if you are thinking about the cafe.
What do I tell my bankers then? I need you to finance an expansion where I am going to lose money but not lose as much money as the past owner. She would think I was crazy. They want to see 20-23% returns minimum for extending a loan because part of the return has to pay the loan payment or I am under water.
So I would disagree in part, service contract would need to cover my costs (if I were still in the business) plus a profit margin. Only way your going to do that with LD dining car service is to bundle with something else or as was stated before pay a subsidy with a guaranteed profit above the fixed costs.
On fixed costs, remember that most eateries refresh their dining room and store appearance every 5-7 years and their kitchen equipment every 12-15 years. Above just the fixed costs you have to generate revenue to cover that as well. True, Amtrak is not doing that and that is probably part of the issue they have with losing money.
Now if they marketed Auto-Train beyond just word of mouth and ridership jumped to 800-1200 passengers a train, someone might be tempted with that contract along with the liquor sales contract for that specific train. Still it would not make much of a profit and so would have to probably have some other enticement.
1. The fixed costs of a dining car (food service car) would fall totally to Amtrak.
2. The maintenance and other operating costs as a railcar, would also fall to Amtrak.
3. The food service contract would probably need to permit the operator to make a 15-20% net return. Let the operator use the car free and some Amtrak-owned terminal spaces rent free and set their own menu and pricing schedules.
C&NW, CA&E, MILW, CGW and IC fan
CMStPnP Now if they marketed Auto-Train beyond just word of mouth and ridership jumped to 800-1200 passengers a train, someone might be tempted with that contract along with the liquor sales contract for that specific train. Still it would not make much of a profit and so would have to probably have some other enticement.
Surprisingly Amtrak does market Auto-Train beyond word of mouth. As you drive I-95 in both directions between Northern Virginia and Central Florida there are a number of billboards that advertise the train as a alternative to what the driver is doing when viewing the billboards. Some local radio stations in the DC metro area run advertisemens for Amtrak services.
The problem with Auto Train is that it is very successful southbound but not as much northbound. Thus, little advertising need be done in the northeast to fill trains but is needed in Florida to fill northbound trains.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
I wrote this earlier but don't see where it got posted. I think it is important to this discussion, so I will try again. If it is elsewhere, please let me know.
There is a folly to the idea that privitization is the answer, that if a private enterprise operates a train service or food service for Amtrak, they would do it, make money, and not cost the taxpayer a thing. WRONG! Private enterprise would contract with Amtrak or a commuter agency to provide a service at a price the contractor will make money, a profit. So, if they charge Amtrak or the commuter agency $10 million a year and earn a profit, they taxpayers must pay that much. Private enterprise, say, earns 25% or $2.5 million. The question ignored is that it may have cost Amtrak or the commuter agency less than $10 million. Maybe as little as $6 or $7 say. The taxpayer is therefore paying for the profit, in other words subsidizing the service and the profits. Wouldn't the taxpayer be better off operating for $6 or $7 million cost rather than having to pay $10 Million? Translating this to food service, the same thing. If Amtrak can serve food, at a loss of say $5 a plate per person, why is it cheaper for Amtrak (the taxpayer?) to pay a food service provider $10 per plate? We are not saving money for anybody, especailly Amtrak and the taxpayer. We are paying more by subsidizing the food service provider. This is a politicians trick which is too often ignored or overlooked but definitely not understood by the public.
henry6 I wrote this earlier but don't see where it got posted. I think it is important to this discussion, so I will try again. If it is elsewhere, please let me know. There is a folly to the idea that privitization is the answer, that if a private enterprise operates a train service or food service for Amtrak, they would do it, make money, and not cost the taxpayer a thing. WRONG! Private enterprise would contract with Amtrak or a commuter agency to provide a service at a price the contractor will make money, a profit. So, if they charge Amtrak or the commuter agency $10 million a year and earn a profit, they taxpayers must pay that much. Private enterprise, say, earns 25% or $2.5 million. The question ignored is that it may have cost Amtrak or the commuter agency less than $10 million. Maybe as little as $6 or $7 say. The taxpayer is therefore paying for the profit, in other words subsidizing the service and the profits. Wouldn't the taxpayer be better off operating for $6 or $7 million cost rather than having to pay $10 Million? Translating this to food service, the same thing. If Amtrak can serve food, at a loss of say $5 a plate per person, why is it cheaper for Amtrak (the taxpayer?) to pay a food service provider $10 per plate? We are not saving money for anybody, especailly Amtrak and the taxpayer. We are paying more by subsidizing the food service provider. This is a politicians trick which is too often ignored or overlooked but definitely not understood by the public.
I think it all depends on how the service is set up in a contract. I'm suggesting an experienced food service operator should be permitted to operate in Amrak dining cars, rent free. The operator can decide menus and price structures within some broad parameters. Plenty of operators should be capable of making a profit if they have no rent, no utilities, no pensions and benefits to pay at the same level as Amtrak currently does. Every cent they take in from patrons goes to covering (their) labor compensation and the cost of food provisions. There should be enough money left over to enhance their bottom line. If not enough of an enticement, throw in free rent to operate in the busier Amtrak-owned stations. The cost to taxpayers would be far less.
Of course it cannot be done "rent free". Nor would anyone want it done that way. Money is committment and a binder for one thing. And I as a taxpayer wouldn't want to give the space aboard my government train to anyone who is in it for his own financial gain. Insurance, security, liability, indemnity, committment, service levels, performance, so many things have to be considered to be sure neither one side is left holding the bag and both are protected from each other and the public. Hey, if the space is free, I'll take it and bring my microwave and Mrs. Pauls or Swanson's frozens to sell at my cost of purchase, storage, carriage, cooking, selling, time, and profit. So, lets see, say even these meals can be purchased wholesale for $3, add $3 to cover my additional costs, $2 to purchase the micorwave, $2 for whatever I havn't figured in off the top of my head and I want a profit of $5 per meal. So, would you pay $15 for a meal you'd normally have at home for say $5? Ambiance isn't everything, not even aboard a train for a train buff.
Henry:
I have no idea how much Amtrak spends on Auto Train advertising at the northend vs. the south end, but I don't think it matters much. I'm content to leave that up to the Marketing Dept. Do you think the Auto Train goes south full and returns north empty? Yes, the traffic flow fluctuates seasonally, but most Auto Train riders are traveling round trip. Otherwise the north would be empty by now, and Florida would be full! Yes, there are some who travel one way. They are in three groups: 1. Those who are making a permanent move; 2. Those who can't get reservations for the return trip because the train is full; and 3. Those who plan to visit intermediate spots in the reverse direction of travel, which can be northbound or southbound. The demographics are such that more potential customers live in the north. To me, it makes sense to advertise appropriately.
So I guess I just don't get your point.
Tom
But, it's not a zero sum game. Amtrak and the contractor won't operate at the same efficiency. Amtrak has no reason to be efficient other than to avoid Mica's tongue lashings. The what costs Amtrak $15 to provide, that they sell for $8 might cost a contractor $6 to provide and sell for $7. Even if it cost the contractor $9 to sell for $7 and Amtrak had to toss in $3 to keep them around...
It's still less.
I've read and have been under the impression that often the southbound trips are sold out while the northbound trips are not. Therefore, as an advertising and marketing veteran, it would be necessary to advertise more in Florida to try to get as many more people aboard northbound as possible. I am only going on what I've been led to believe and not making guesses on the circumstance. Do you have stats which disprove my claims?
Why, oltmannd, say Amtrak has no reason to be efficietn other than to avoid Mica's tongue lashings? Is that true or a political assumption? The contractor will not sell for less...the contractor will sell at a profit and turn the bills over to Amtrak to pay. How can you say the contractor's out of pocket costs are so far less than Amtrak's? Please supply actual numbers of Amtrak's costs to provide vs. private contractor's costs. I've had some experience trying to do this several years ago and know what needed to meet costs I would have had to ask in order to come out ahead. Amtrak would be dealing with the same costs as the contractor. The concept of private enterprise always being better and turning a profit is not always true. If it were so, then every railroad would be running passenger trains for both commuters and inter city instead of ducking out of the business by getting the Government to create Amtrak in the first place. And investment bankers and hedgefund managers would all be lining up to finance commuter rail operations and transit.
On the Auto Train, the market tends to fluctuate seasonally. Southbound patronage is heaviest during the fall. Northbound patronage is heaviest during the spring. This is due to the travel of snowbirds. Passenger counts are heavy in both directions around holidays and at the beginning and end of college terms. Traffic tends to be heavy in both directions during the summer because the kids are out of school and that's the time for family vacations. Floridians go for vacations up North. Northerners go for vacations in Florida. Both travel round trip. In the summer, the weekends tend to be busier than the weekends because that's when work vacations begin and end. I have no statistics. What I have is 26+ years of service on the Auto Train.
(edited)
Makes sense, Tom. I am not in a market where Amtrak advertises so I can't say what they do. But, based on my 50 years in advertising and promotion and on your reports I know what I would do or feel I had to do. I would advertise to address the light load direction. Northbound light loads are easy to advertise as you only have Florida to advertise to. Up north, for the light southbound loadings, you have to choose and advertise in markets within up to a six hour drive from Lorton. Do they offer incentives for round trips? Is pricing market demand and seasons driven or flat rate anytime? I know Amtrak handles Auto Train marketing and advertising differently than regular intercity travel. I also know that Amtrak does not have the freedom to do business the way businesses would do it because of being a ward of Congress instead of the charge of railroaders.
ACY, I vote for your experience.
I never worked in the Marketing end, so I can't answer those questions. Rates vary significantly, depending on direction and dates of travel. Light loads reflect light demand. A certain amount of this is probably inevitable, and no amount of marketing is going to convince people they should go somewhere they don't want to go, at a time when they don't want to travel. I don't think anything you're saying is news to Amtrak's Marketing Dept.
CMStP&P:
Were you joking when you suggested 800-1200 passengers on the Auto Train? 1200 passengers could require a train approximately 100 cars long, based on the current Auto Train's requirement of about 17 passenger cars and about 33 auto carriers to carry 600+ passengers and about 300 vehicles. Once again, it's math.
ACY I never worked in the Marketing end, so I can't answer those questions. Rates vary significantly, depending on direction and dates of travel. Light loads reflect light demand. A certain amount of this is probably inevitable, and no amount of marketing is going to convince people they should go somewhere they don't want to go, at a time when they don't want to travel. I don't think anything you're saying is news to Amtrak's Marketing Dept. CMStP&P: Were you joking when you suggested 800-1200 passengers on the Auto Train? 1200 passengers could require a train approximately 100 cars long, based on the current Auto Train's requirement of about 17 passenger cars and about 33 auto carriers to carry 600+ passengers and about 300 vehicles. Once again, it's math. Tom (edited)
CSX limits Auto Train to a maximum of 50 cars, whatever mix of passenger and autoracks that Amtrak desires, but no more than 50 total.
I've heard rumors that there is talk of increasing the maximum number of railroad cars on the Auto Train. Nobody has suggested anything like the numbers needed to accommodate 1000 or more passengers and their 500 or more vehicles (a 2:1 ratio is typical).
The train normally runs with 4 standard sleepers (168 berths) plus 2 delux sleepers (64 berths), plus 4 coaches (about 320 seats), for a total of 592 passengers. This requires 3 diners, 2 lounges, and a crew dorm. A 7th sleeper (42 berths) and/or a 5th coach (about 80 more seats) are occasionally added, for a theoretical potential total of 714, although I don't think the Company has ever been able to sell that many tickets, and I doubt that anybody on this forum could sell that many either. Excessive crowding has prompted complaints when these extra cars are added.
Double deck auto carriers accommodate 5 vehicles on each level --- total 10 vehicles per carrier. 50 carriers to handle 500 autos; 60 carriers to handle the 600 vehicles for 1200 passengers.
Pretty basic math, and it doesn't take into account the cost of greatly expanding the auto loading/unloading facilities at both terminals, neither of which has any space for expansion. Nor does it take into account the need to add track and platform capacity for passenger boarding and detraining, for which there is also no space. Nor does it take into account the need to buy more passenger cars and auto carriers, which are not in any foreseeable budget as far as I know.
Math.
ACY I've heard rumors that there is talk of increasing the maximum number of railroad cars on the Auto Train. Nobody has suggested anything like the numbers needed to accommodate 1000 or more passengers and their 500 or more vehicles (a 2:1 ratio is typical). The train normally runs with 4 standard sleepers (168 berths) plus 2 delux sleepers (64 berths), plus 4 coaches (about 320 seats), for a total of 592 passengers. This requires 3 diners, 2 lounges, and a crew dorm. A 7th sleeper (42 berths) and/or a 5th coach (about 80 more seats) are occasionally added, for a theoretical potential total of 714, although I don't think the Company has ever been able to sell that many tickets, and I doubt that anybody on this forum could sell that many either. Excessive crowding has prompted complaints when these extra cars are added. Double deck auto carriers accommodate 5 vehicles on each level --- total 10 vehicles per carrier. 50 carriers to handle 500 autos; 60 carriers to handle the 600 vehicles for 1200 passengers. Pretty basic math, and it doesn't take into account the cost of greatly expanding the auto loading/unloading facilities at both terminals, neither of which has any space for expansion. Nor does it take into account the need to add track and platform capacity for passenger boarding and detraining, for which there is also no space. Nor does it take into account the need to buy more passenger cars and auto carriers, which are not in any foreseeable budget as far as I know. Math. Tom (edited)
And depending upon how many additional cars would be added (over 50 if allowed by CSX)- additional power would be required to maintain the maximum allowed speeds. There is very little that is FREE in railroading.
As I understand it, HEP becomes a problem with longer trains as well. While we are drifting off topic, perhaps DPU operation with a locomotive between the passenger cars and autoracks could help alleviate the issues?
More on topic, I think the goal has to be to provide the same service at the lowest loss possible, since the loss is probably inevitable. Whether private contractors or Amtrak itself makes better fiscal sense I don't know, but it merits study.
ACYWere you joking when you suggested 800-1200 passengers on the Auto Train? 1200 passengers could require a train approximately 100 cars long, based on the current Auto Train's requirement of about 17 passenger cars and about 33 auto carriers to carry 600+ passengers and about 300 vehicles. Once again, it's math.
I never did the math on the passenger cars or sleeping car accomodations, I remember long ago when the Pope was in Chicago a single Amtrak train carried 800 passengers in coaches from Milwaukee, that was all coaches. The 800-1200 people estimate I think is what would be needed to provide the cook to order fine dining service as what the nostalgic people in this forum want.
Some Dinner Trains work with the fine dining model but their charge per patron is usually $50 or more with wine and pretty much the whole train is a Diner. Even with that, a good portion of them fail within the first five years.
If Auto-Train has a 500 passenger load, it might pass break even with a reheatable tray service for a slightly higher charge but that would involve new heating elements (redone kitchen area) and retrained Dining Car folks. I don't think it would break even with that amount of passengers with a cook to order diner model......still need more folks or a much higher charge per meal.
Most Amtrak LD Trains average far less than Auto-Train does. My rough guess is 200-300 average passengers on board at one time on most Amtrak Long Distance Trains.
Also, seasonality of Auto-Trains traffic goes back to when it was privately run by Mr. Garfield (was that his name?). I don't think Amtrak will get over that outside of deeply discounted fares or some other incentive. Pretty sure the Airlines have the issue as well, in fact, I know the airlines have the issue between Ft. Meyers and Dallas. They cut the flights (or reduce to regional jets) and number of available seats drastically in the Summer and boost them in the Winter between Ft. Meyers, FL and DFW.
There is absolutely no comparison. Carrying 800 or more coach passengers 100 miles between Milwaukee and Chicago in 1-1/2 or 2 hours, has absolutely nothing in common with carrying 800 or more passengers in coaches and sleepers 850 miles overnight between Lorton and Sanford (aside from the fact that both trains will be crowded). This thread is supposed to be about food service, and I'll bet a lot of those folks who went to see the Pope ate nothing at all on that short train trip, or settled for light snacks.
You're not wrong. Serving palatable meals on any train of any practical size is a costly thing to do.
I don't understand your connection of Eugene Garfield to Auto Train's seasonal nature. Travel to and from Florida is seasonal. It is now and it was long before Eugene Garfield existed. That's the nature of the market he served, and it's the nature of the market the current Auto Train serves. If you think you can change that aspect of the market significantly with clever marketing ploys, I think you're dreaming. As it is, Auto Train sees fairly consistently heavy business, so it's probably pointless to fret too much about "empty" trains that aren't generally empty, notwithstanding the inevitable empty seats in the "off" direction.
henry6 Of course it cannot be done "rent free". Nor would anyone want it done that way. Money is committment and a binder for one thing. And I as a taxpayer wouldn't want to give the space aboard my government train to anyone who is in it for his own financial gain. Insurance, security, liability, indemnity, committment, service levels, performance, so many things have to be considered to be sure neither one side is left holding the bag and both are protected from each other and the public. Hey, if the space is free, I'll take it and bring my microwave and Mrs. Pauls or Swanson's frozens to sell at my cost of purchase, storage, carriage, cooking, selling, time, and profit. So, lets see, say even these meals can be purchased wholesale for $3, add $3 to cover my additional costs, $2 to purchase the micorwave, $2 for whatever I havn't figured in off the top of my head and I want a profit of $5 per meal. So, would you pay $15 for a meal you'd normally have at home for say $5? Ambiance isn't everything, not even aboard a train for a train buff.
schlimm Why not rent free? It really costs us nothing except upkeep, maybe. The vendor has to cover liability, like any contractor for your own house, for example and maintenancecleaning of cooking equipment and the car, permits, etc. My point was simply to find a way for Amtrak to provide something better than 'automat' foods on LD trains without running at a loss out of the taxpayers' pockets. Not nostalgia service, but also not microwaved TV dinners, either. And if those fixed costs like rent, etc. and utilities are free to the vendor, if he is any good, he could offer very good food with less than 100 patrons at a mealtime. Needing 1000 customers is a ridiculous exaggeration. Running a sandwich shop is far different, apples and oranges.
Forgot to add that food bought for restaurants is usually purchased Tax Free because you charge the sales tax when you serv it. If you intend to buy food tax free you will also need to buy and qualify for a tax exemption certificate and present it to inspectors as well.
CMStPnPCMStPnP wrote the following post an hour ago: schlimm Why not rent free? It really costs us nothing except upkeep, maybe. The vendor has to cover liability, like any contractor for your own house, for example and maintenance/cleaning of cooking equipment and the car, permits, etc. I don't think that will work.... You cannot legally seperate the maintenence of the facility from the food service operator and pass your first inspection (be it dining car or facility). It does not work that way.
schlimm Why not rent free? It really costs us nothing except upkeep, maybe. The vendor has to cover liability, like any contractor for your own house, for example and maintenance/cleaning of cooking equipment and the car, permits, etc.
I don't think that will work.... You cannot legally seperate the maintenence of the facility from the food service operator and pass your first inspection (be it dining car or facility). It does not work that way.
HAD you read carefully, your objection was already answered.
If you think an operator of a middle-brow to better restaurant requires 1000 customers to turn a profit, maybe you should ask around. I did and it wasn't a grandma Jones-style restaurant. Staff would not ride endpoint to endpoint on most trains nor be on-call at all hours. The snack bar (cafe car) does that.
schlimmHAD you read carefully, your objection was already answered. If you think an operator of a middle-brow to better restaurant requires 1000 customers to turn a profit, maybe you should ask around. I did and it wasn't a grandma Jones-style restaurant. Staff would not ride endpoint to endpoint on most trains nor be on-call at all hours. The snack bar (cafe car) does that.
You misread. I said 800-1000 people on the train (not covers or clients) to turn a profit on a sit down made to order service that folks were envisioning and not all of them would use the dining car only a percentage of them would. You have some on Amtrak that never or rarely eat in the dining car, preferring the snack car instead.....and some pack their own food or snacks. You also have basically the same captive load on a passenger train for breakfest, lunch and dinner THAT you do not have at a fixed restaurant. It is unusal at a restaurant to get the same client more than once in a day (which means they will spend more at a fixed restaurant.....lowering the amount of customers needed to turn a profit). Though there are a handful that do frequent mutiple times if they like the food.
Further, folks off a passenger train tend to have slightly better appetites and work off their food (higher metabolism) compared to folks sitting around on a passenger train all day. Last but not least, cold sandwiches are not going to cut it for breakfest or very long on a LD train. There are also rules for cold sandwiches. Cooked lunch meat once opened has to be used or disposed of within 72 hours. Same with packaged cheese unless it is individually wrapped. Fresh produce prepped for sandwiches typically has to be used within 48 hours or disposed of. Your going to be throwing out some food here with only 100 clients.
I don't know how that part time dining car help works on a full time passenger train, that would need further exploration.
The snack car guy uses packaged food and he does not prep. He might be exempt from some of the food handling requirements. In fact if Amtrak was not worried about cleanliness of the oven or fires, the passenger could prepare the food and it could be served from a vending machine. Or possibly have the vending machine cook the food and serve it hot. But we covered vending machines already.
Your also not taking into account liquor sales at a fixed restaurant are probably higher than an Amtrak diner on a per person basis BECAUSE THEY HAVE A PROFESSIONAL BARTENDER. In fact you should ask the same restaurants you asked before what % of their margin is from liquor or wine sales and what their average check is. Both items are important if your going to compare to Amtrak.
Here are some links to menus from the food services of the SNCF and DB trains:
http://medias.sncf.com/sncfcom/pdf/restauration/Carte_Bar_TGV.pdf
https://www.bahn.de/p/view/service/zug/bordgastronomie/monatsaktion.shtml
Our community is FREE to join. To participate you must either login or register for an account.