Eurail Group GIE: Marketing Rail Travel in Europe

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Case Details:

Case Code : MKTG158
Case Length : 14 Pages
Period : 2001-2006
Pub Date : 2007
Teaching Note :Not Available
Organization : Eurail Group GIE
Industry : Travel and Tourism
Countries : Worldwide

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Railways were introduced in Europe in the early part of the 19th century. They became a major mode of transport and played a very important role in the growth of the economies of the European countries.

But during the two World Wars and in their aftermath, railways lost out to road transport. In the late 1950s, European railway companies, which were also beginning to see competition from airlines, began to look for ways to cut costs and encourage rail travel.

The Eurail Community came into existence in 1959. It was a loose association of national railway companies from 13 countries in Europe.

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It was created to cater to the increasing number of tourists from North America, especially USA, in the post-World War II era. The community offered these foreigners a rail pass, called the Eurailpass, which allowed them to travel on several rail systems of Europe. This meant that tourists did not have to purchase rail tickets separately for each part of their journey and in various foreign currencies. For travelers interested in point-to-point travel, Eurailtickets were provided.

The fact that the Community included the rail systems of all the major European countries was a major reason for its success. However, the UK was not a part of the Eurail community and instead, had its own rail pass called the Britpass. The Eurailpass was not available to residents4 of Europe. For residents of Europe and North Africa, the Inter Rail Pass was introduced in 1972. This was similar to the Eurailpass, but allowed travel only in the second class (Refer Exhibit I for other rail passes in Europe).

From the time it was introduced, the Eurailpass was sold in the US through authorized sales agents, and Americans could purchase the pass by paying in US dollars.

This made it not only convenient but also meant that travelers to Europe did not have to worry about foreign exchange fluctuations. More importantly, it was more economical than buying tickets in Europe...

Excerpts >>

4] People residing in Europe for more than six months could not avail Eurail Passes.

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