Information published on 1 March 2016 in the UIC electronic newsletter "UIC eNews" Nr 487.

France: Group steps up international expansion in China and Australasia under “Rail Europe” brand

  • Europe
  • News from UIC members (VSC), already one of Europe’s leading travel companies, continues to make inroads overseas with the launch of two major ventures in China and Australasia. The group, whose business beyond Europe operates under the “Rail Europe” banner, is seeking to conquer the promising Chinese market (which grew by 58% in 2015, Rail Europe racking up €30.4 M in annual sales), opening a Shanghai-based subsidiary from 2016. With annual sales of €40.9 M, Australia and New Zealand represent Rail Europe’s second-biggest overseas market after the USA. Here, Rail Europe has just bought Rail Plus, a general sales agent (GSA) specialising in international rail travel, with the aim of consolidating its presence in the region.

VSC Group’s Chief Executive Franck Gervais commented that: "International growth is a key plank in the VSC strategy. The Asia-Pacific region offers promising markets for European rail products, and we are looking to create a robust, long-term presence there. Investing in local offices will enable us to grow our markets and better understand local customers, whom we can then offer an optimised range of European rail travel products and services."

Rail Europe sets up shop in China

Headed by VSC Group’s Overseas Director Fabrice Morel, Rail Europe has just founded a local offshoot in the shape of Rail Europe China, which aims to boost the company’s online retail presence amongst consumers. In doing this, Rail Europe China will be supported by local sales teams and technological infrastructure.

One major benefit of opening a Chinese subsidiary is that the website will be hosted on Chinese soil. This will speed up response times, a key factor in winning over demanding Chinese consumers, who use mobile devices much more to access the internet than in Europe. It will also mean that Rail Europe can maintain a Chinese web presence, e.g. on social media such as Weibo and the Baidu search engine, and can offer various Chinese methods of payment.

Based in Shanghai, Rail Europe China is a wholly-owned subsidiary of Rail Europe. The new company comprises a team of six Chinese staff headed by Tian Yu, previously based in Hong Kong and who also did a stint at Thalys in Europe. The team’s job is to promote rail travel in Europe, targeting in particular the Chinese middle classes who are increasingly travelling abroad.

E-tourism is booming, and offers Chinese tourists - most of whom (90% of sales) still travel abroad on package tours booked via travel agencies - a radical new way to travel. Rail Europe China will thus continue working closely with local digital travel service providers, such as C Trip, and will carry on supporting and expanding its network of partners across China (currently 13, including some of China’s biggest travel agents).

Rail Europe consolidates position on second-biggest overseas market: Australia and New Zealand

In buying Rail Plus, one of the sector’s biggest players with annual sales volumes of €30 M, Rail Europe is consolidating its Australasian market presence and strengthening its long-standing commercial relationships in the region.

With a team of fifty split between Melbourne and Auckland, Rail Europe now has all it needs to continue growing in Australia and New Zealand. One particular target market is older Australian travellers, whose profile is markedly different from that of other overseas customers. They are curious, enjoy good food and relaxed living, stay in Europe longer than other travellers, and linger longer on each stage of the trip - and they come back for more! New Zealanders, for their part, are particularly keen on sports-themed trips (e.g. the 2015 Rugby World Cup) and memorial tourism (commemoration of the WWI centenary, specifically the role of ANZAC troops, etc.)

Rail Europe: three key dates

1989: Rail Europe opens in the USA; business subsequently extended to Asia-Pacific (1995) and Latin America & Africa (1999).
2013: VSC’s business outside Europe is consolidated into its Business Unit Overseas, which manages the Rail Europe brand in partnership with SBB (Swiss Federal Railways). Rail Europe sells European rail tickets and passes on both the BtoB and BtoC markets.
2016: VSC announces two decisive ventures in China and Australia.

VSC in figures

350 Rail Europe staff in 12 countries.
100%: Rail Europe sells the products of all Europe’s carriers, a total of over 50 companies (SNCF, Swiss Travel System, Eurostar, Thalys, Lyria, Deutsche Bahn, Renfe, Trenitalia & Italo, ATOC in Great Britain, etc.).
Online BtoC: 50 websites across 5 continents and 140 countries.
Online BtoB: 30 websites.
120,000 sales points, including a network of over 150 GSAs and 12 000 agents and tour operators.
12 customer service centres.
5.6 million: the number of tickets sold outside Europe by Rail Europe in 2014.
4,500: the number of Chinese participants attending a seminar in France in 2014 who travelled from Paris to Nice onboard 12 TGVs. The record-breaking journey, organised by Rail Europe, saw Paris’ Gare de Lyon full like never before!