Monday, April 13, 2009

Radically increasing IAH express bus ridership and revenue

As I mentioned last week (first item), ridership on Metro's spiffy new IAH express bus service has been a little anemic, averaging only 1 or 2 people per bus trip. But I think there's a way that could be substantially improved. Continental represents the vast majority (~85%) of the traffic at IAH. Their web site already allows passengers to prepay for checked luggage, rent cars, and hotels. Why couldn't it also offer pre-paid express bus tickets when somebody buys a plane ticket either starting or ending in Houston? That's the time to grab people. Not only does Continental already have their credit card at that point, making the transaction easy, there's also the opportunity to really sell the value of the express bus right there on the web page:
  • Point out the speed, including access to the HOV lane to avoid traffic congestion.
  • Show small pictures of the interior and exterior of these luxury coaches, as well as the luggage service, so potential riders know they won't be stuck schlepping their luggage on a normal city bus.
  • Compare vs. the cost of taxi, both to go downtown and even for other trips where they have to connect to light rail or a taxi downtown. I'd do this with a small map and two sets of numbers at each major core destination: the taxi cost (in red) vs. the bus cost (in blue or green) for Downtown, bus+LRT for TMC or Rice, or bus+taxi for UH, Greenway Plaza or Uptown (realistically, few will connect to local buses after they get downtown, although I suppose that option could also be priced into the map). Also mention the $6 cab fares for within downtown.
Of course, for Continental to have an incentive to do this, they'll need a cut of each ticket sold. And to incentivize pre-payment, there might also need to be a discount vs. the walk-up price. Maybe the walk-up stays $15 one-way while the web site advance price is $12, of which Continental keeps $2-3 dollars. That might not sound like a lot of incentive for Continental, but you'd be amazed how thin the profit margins are on the average plane ticket. Even a couple-dollar boost is significant, especially since it costs Continental absolutely nothing to provide the service. And even with the discount and margin for Continental, Metro would vastly increase the number of riders and overall revenue from the service, which, in the long-term, will be critical to keeping it.

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9 Comments:

At 8:31 AM, April 14, 2009, Anonymous kjb434 said...

My problem with this service is how many people are going to go to downtown before heading out to IAH?

So I need to park downtown and then pay to ride the bus to the IAH? It would be cheaper to just park at the airport. And no, I don't want a friend to drop me off and pick me up from the express bus stop. I don't want to be standing around with luggage in downtown waiting for someone to pick me up. I'm a sitting target.

Also, what genius thought the most riders were coming from downtown to IAH?

The concept is nice, but the execution demonstrates how limited of a service it is. It also backs up the assertion that train service to the airport in Houston is a waste.

 
At 8:49 AM, April 14, 2009, Anonymous Anonymous said...

Sitting target? Give me a break. I love hearing people who live in the burbs talk about how "dangerous" downtown is. Frankly, I haven't heard of too many home invasions, kidnappings or highway gun battles downtown lately. But it sure seems to be happening in the burbs a lot.

Anyway, I like your idea about linking it with Continental. I think the biggest weakness of the program is marketing. I have taken the shuttle service once when I had a flight out of IAH just after work on a Friday (I work downtown). It was so much easier and nicer than driving all the way out there and fighting traffic. I think if more people knew about the service, they would use it.

 
At 9:18 AM, April 14, 2009, Blogger Tory Gattis said...

I think downtown is probably the logical point for express service because it's the hub for most of the transit routes in the city as well as being close to a lot of core destinations (for a cheaper taxi ride). It's also where much of the hotel capacity is and where conventioners are usually headed (if the event is at GRB). As all that implies, I think the service is probably more targeted at visitors to Houston than locals, including visitors to the medical center. Them and maybe students at the core universities (Rice, UH, UHD, TSU, HBU, etc.) and their visiting friends/family.

 
At 11:08 AM, April 14, 2009, Blogger Carey said...

@Anonymous: My locked bike was stolen from downtown yesterday

Also the reason I don't ride the express bus to/from IAH is the prohibitive cost. If I'm flying somewhere for the weekend, why would I spend $30 round trip to take a bus up there and back when on-site parking costs less.

On the flipside, there is a non-express bus that goes from IAH to downtown (and takes about an hour). But it's only $1.25 each way.

If they lowered their price to something comparable to a park-and-ride bus, I think it would get a lot more business.

 
At 2:38 PM, April 14, 2009, OpenID Andrew said...

Tory, great idea.

I think they should also give some serious thought to lowering the price in general, or offering a discount for 2-way tickets.

As you pointed out, METRO will bring in a lot more money with a bus full of people who bought $5-8 tickets than a bus with 1 person who bought a $15 ticket.

The fact is, unless the bus is cheaper than driving and parking, most people aren't going to take it, and it can't be cheaper unless a lot of people take it. The classic transit chicken/egg dilemma.

Partnering with Continental could really help fix the problem. Again, good idea!

 
At 3:01 PM, April 14, 2009, Anonymous Neal Meyer said...

Tory,

Andrew is onto something with regards to price, but there is also the issue of whether patrons already have transportation or not. Well known transfer penalty issues still are in effect, ergo if you are hoping to entice people who already have car or bus transportation to the airport to take this bus, then they will not be attracted to taking the Metro airport bus simply because they would have to park (or leave) their vehicles, then wait for the bus to leave. Therefore Metro should not be hoping to attract people who already have their own transportation and that includes most Houstonians.

There are three main markets Metro can reasonably hope to attract. The first is people in town on business who are going either to downtown or to the Med Center. The second are those who are probably traveling by themselves, who would otherwise have to pay for parking if they cannot get a family member or friend to drop them off at the airport. That market segment would find it much cheaper to get to the airport bus stop, then pay to take the ride to the airport. The third would probably be small number of people who live nearby the airport bus stop in downtown who could reach the downtown terminus easily, then simply wait for the bus. All of these are small niche markets. Marketing will help, but ultimately this is a subsidy for a small number of business travelers and locals.

But running this experiment is far cheaper on the taxpayer's wallets then running a light rail line to the airports, especially when Metro stated to the FTA that the first 5.3 miles of the 21.5 mile line that would otherwise run to IAH is going to cost $900 million.

Neal

 
At 4:12 PM, April 14, 2009, Anonymous kjb434 said...

I like how someone by the name "anonymous" claims I don't know anything about downtown and I live in the burbs.

I live near TC Jester and I-10 which is hardly the burbs. I've had had several outings in downtown in the recent weeks for concerts and baseball games. I try to imagine the crowds aren't there and then the people that would still be there. I don't want to be waiting at a bus stop.

Back to the real issue is that the service METRO is trying to provide is provided much better by a lot of other entities. If you are in a downtown or even uptown hotel, they have shuttle services that will get you to the airport for no charge other than tipping the driver. Even then, a cab to the core is just a little big more than this bus but saves the taxpayers a lot of wasted money.

 
At 5:36 PM, April 14, 2009, Anonymous Keep Houston Houston said...

The basic problem with any airport rail connection is that both only tend to work *in concert with* a dense transit net.

The extreme end of this of course is Tokyo, which has its international airport served by the Keio Skyliner, the JREast NEX, and now the new Skyliner, and has its domestic airport served by a dedicated monorail AND the Keihin Kyuko line.

This works because Tokyo is blanketed with trains, and the vast majority of passengers get on at other stops around the city and have a two-transfer ride from home to the airport.

Could that kinda thing work in Houston? Yes - if we had the core LRT network *plus* HGAC's commuter rail *plus* an inner loop streetcar network *and* all of these systems provided easy transfer to the airport service.

Too many American cities put the cart before the horse and think the airport should be one of the first destinations to put rail. It's not. It should be the 5th, or the 8th, or the 14th. Airport rail only makes sense *if* there's a bunch of other rail already in existence. Unless and until that happens, the cost-benefit ratio just isn't there.

 
At 10:10 PM, April 14, 2009, Blogger KZ said...

Neal I'd add a fourth segment. Professionals who work downtown and travel on business could use this. They'd take their bag to the office until they need to leave to catch the flight, and when they return they're back at the office where they left their car.

Obviously the incentive to do this might be limited as long as companies don't require employees to travel economically. If you're getting reimbursed for the miles and the parking, why even bother to ride the bus? I'm not sure how many downtown business travelers that would apply to.

 

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