Gen Z, Europe Rail: Liberalization, Human Connection & Future Travel

Business Rail Reimagined: Gen Z Preferences and Market Liberalization Drive Industry Evolution

In an era dominated by digital transformation, new research is challenging conventional assumptions about the preferences of the next generation. At a media reception hosted by Amex GBT on June 24th, 2024, ahead of the Business Travel Show Europe, industry experts unveiled surprising insights into the future of business rail travel. The event revealed that Generation Z, despite growing up with digital technology, prioritizes human interaction, while the increasingly competitive landscape of liberalized rail markets is poised to reshape business mobility across Europe. This article explores the implications of these trends for railway operators, corporate travel managers, and the wider industry.

Gen Z’s Preference for Human Connection

Behavioral psychologist Dr. Tara Quinn presented groundbreaking research, revealing that Gen Z, often perceived as early adopters of AI and digital solutions, exhibit a surprising preference for human interaction. Dr. Quinn noted, “Gen Z respondents were actually *more* likely to want to speak with a human when they had a question.” This contrasts with the expectation that they would readily embrace AI-powered chatbots and automated support systems. This shift, Dr. Quinn suggests, may stem from cognitive and behavioral changes linked to constant screen exposure. The “quick fix” generation, as Dr. Quinn described them, seeks immediate answers, a pattern aligned with their highly stimulus-driven cognitive styles. This challenges the one-size-fits-all approach, highlighting the need for rail operators to design customer experiences that cater to diverse preferences, offering options that value sustainability, productivity, and wellbeing.

Designing for the “Quick Fix” Traveller

The implications for the travel industry are significant, as platforms increasingly rely on digital interfaces. Companies must move away from a one-size-fits-all approach, Dr. Quinn emphasized. The focus, she suggested, should be on presenting rail travel not as a sacrifice, but as an enhancement to their quality of work and life. Highlighting the benefits of using rail in terms of wellbeing and productivity allows for a greater appreciation of the travel experience. Whether it is to work more efficiently or simply to have time to de-stress, a carefully curated narrative is required to highlight the benefits of choosing rail over air travel.

Fragmentation and Innovation on the Rails

Mark Smith, known as The Man in Seat 61, offered a critical analysis of the current challenges and opportunities in the railway sector. He pointed to fragmentation, a major obstacle, especially when compared to the interoperability of airline systems. National rail operators have traditionally developed bespoke systems that do not work well together, creating inefficiencies. For example, he illustrated the variations in payment models, with Germany charging per journey and France charging per train. Despite these complexities, Smith expressed optimism for the industry, especially with the advancement of standardized booking platforms across borders. “If you put more effort into the booking process, you get a lot more out of the journey. It’s worth it,” he stated.

Liberalization’s Impact on Service and Affordability

A central theme of the discussion was the success of liberalized rail markets. Italy and Spain were highlighted as examples where competition has driven improvements in service and affordability. In Italy, the presence of competitors like Italo and Trenitalia has enhanced quality while lowering prices by 20-25% compared to what they would have been under monopoly control. Smith stated, “In Spain, prices on some high-speed routes have dropped by nearly 50%, with passenger numbers up 58%.” This demonstrates that competition, especially for long-distance routes, benefits all stakeholders except perhaps domestic airlines.

Key Takeaways for Corporate Travel Managers

David Taylor, Director of Thought Leadership, distilled the key takeaways for corporate travel managers. He highlighted three critical aspects to consider when navigating the evolving rail landscape. Further details of his suggestions were not disclosed.

Conclusion

The future of business rail travel is being shaped by a confluence of factors: evolving passenger preferences, technological advancements, and market liberalization. The unexpected preference of Generation Z for human interaction over AI, coupled with the proven benefits of competition in liberalized rail markets, presents both challenges and opportunities for the industry. Companies that understand and adapt to these dynamics are best positioned to succeed. They must prioritize customer experience design and tailor messaging to align with passengers’ evolving needs and values. As rail operators embrace standardization and innovation in booking processes, they can enhance the appeal of international rail travel. This will lead to greater efficiency and value for both business travelers and travel managers, and support the overall growth of the railway sector. This new era of rail travel promises to offer a more competitive, sustainable, and passenger-centric experience for years to come.