Experimenting with dropping a diner from a long distance train (Silver Meteor) and reducing sleeping car charges by the 10% for free meals surcharge. In this next issue of Trains. Don’t want to spoil the article for anyone so lets wait another few days for everyone to get their mailed copy.
The author in the article is complaining about the fairness of the test as Amtrak is not testing retaining the Dining Car and adding Premium meals but also dropping the sleeping car surcharge for free meals and making sleeping car passengers pay.
I cannot believe that only 10% of a sleeper covers all the meals in the Diner. Heck the Texas Eagle it is $350 each way in a Economy Sleeper so thats $35 for Dinner, Breakfest and Lunch? No way are those three meals together only $35. Which is what I suspected when reading about the Dining Car deficits. The Sleeping Car Passengers are not paying the market costs of the meals consummed…gesh!
The 10% is illustrative. There was a fairly long section in the OIG food service report explaining that the transfer was based on the menu prices. For Acela they compare hotel provided meal prices.
Presumably the food surcharge is on a cost basis, not retail. Even so, $35 cost for those three meals sounds low. But then, the diner food isn’t worth it in the opinion of many who do not patronize the diner for all three meals, maybe none.
Amtrak refuses to adjust food charges to cover costs…simple as that, railroad food has always been cheap compared to what you find anywhere else. If they went back to the cooked on board food and priced it accordingly(to cover all costs, materials and wages), then they wouldn’t have such huge loses in the food deparment, and people will pay for good food…no ifs, ands, or butts about it.
Not everyone traveling has the fiances available to pay the high prices that would be necessary, and would be forced to subsist on junk food. In one of the last years before Amtrak included the cost of meals in the diner in the cost of a sleeper ticket, I was at breakfast, and a lady with a young child was seated across from me. She began writing her order–and when she looked at the prices, she changed her order drastically, apparently because she could not afford what she had wanted to order.
Preparing the food entirely onboard increases your food cost and it will take longer to serve a meal on a per passenger basis. Look at it as a fixed business.
Lets say a daily lease on a Dinning Car or Car dedicated to eating is approx $7,000.00. Now add on the onboard service people that you have to pay full time around the clock wether they are working or not. Add those two together and add 25-30% for food costs. Then divide by number of passengers on the train that will use the diner for a sitting (I would esitimate that on average Amtrak has three sittings per meal and they are not all 100% occupancy…so count the seats in the Diner and figure about 70-80% occupancy.
That will give you how much in average check each diner will have to pay to at least break even.
The only way your going to fix part of this is:
Lowering the cost of the lease on the Diner, maybe only use half a car instead of a full car and use the other half of the car for coach passengers.
Lowering the food prep time and costs allowing the dining car to serve the food quicker and perhaps do two to three more seatings per meal. This would also reduce labor requirements.
Reducing the staff on the diner.
So redo the above calculations and cut the lease per day by half to $3500, Reduce the food costs and labor both by 15-20%, with a smaller diner you might not serve the same amount of passengers so y
I think we’re playing Congress’ game and losing sight of the big picture. It’s as ridiculous to demand that the diner be a profit center as for a grocery store to require that everything in its inventory make money.
I have no idea what grocers make on, say, dairy products. Maybe it’s a lot, maybe not. (The latter, I think, if everybody is as picky about freshness dates as I am.) The point is, nobody would shop at the store if he couldn’t pick up milk while he’s at it.
Similarly with the LD diner. It doesn’t take a genius to figure out that this has to be the most expensive form of food service going, and that if you charged what it cost nobody would pay. At the same time, the alternatives, including no food service at all, have all been tried and found wanting.
If we’re going to run the LD trains, everybody needs to grow up and accept the full-service diner as part of the cost. (Everything on the train loses money, starting with the locomotive engineer.)
To me, it isn’t about turning a profit or even breaking even. It is about the wisest use of tax monies, based on the mission of Amtrak (transportation) and providing the greatest good for the most people (you can serve far more people with well-developed corridors than with sparse LD trains).
Specifically, full-service LD dining cars are a nice-to-have option, but only in the context of a segment that is growing in numbers of passengers served and having a ppm subsidy similar to that of the rest of Amtrak. The growth of the LD passenger ridership is flat (hence a declining percentage of Amtrak’s growing total) and the ppm subsidy is the highest segment of Amtrak, by far. How can that be justified? How can the provision of highly-subsidized, old-fashioned, costly and relatively luxururious food services by a government agency be justified? Are the few patrons of Amtrak LD sleepers and dining cars some kind of elite who need a subsidized china and tablecloth food service?
Congress has mandated for years that Amtrak food services break even. The difference is that now they seem to mean it. And they could easily have the public on their side. I can easily imagine some pol running TV spots showing happy, laughing passengers in an Amtrak dining car eating their dinners with a word overlay showing the subsidy amount for each food item.
Congress has only mandated the Amtrak food service to break even. And to clarify your analogy, you have a grocery store that loses so much money on one segment that it causes the whole store to be a loss, even though some product lines lose only a bit or even make money.
I know…but compare that space on a dining car galley compared to what is allocated on an airliner galley, I think they can shrink the amount of space dedicated to the galley on a railroad dining car for food prep.
I think they are stuck with food storage space though since most airliners only serve one meal and I believe the transatlantic or transpacific flights have elevators to the cargo space for additional food storage. Or maybe they can cope on one level…not sure.
I think your right that unless we are talking a 26 to 30 car passenger train. I do not see how on Earth a Railroad Dining car can be profitable unless they raise the prices to a price point that most people will not pay. Folks here do not realize how price sensitive the public is when it comes to food.
I had people walk away from my Sub Sandwich place because they thought $6 for a Submarine made up of largely fresh and premium ingredients was too high to pay for a sandwich. What I found interesting is I increased the price of soda by 30 cents each…nobody noticed / nobody complained. I tried it with a Sub and it was like I was price gouging and lots complained or would not pay it. Very interesting…I still cannot explain why the response was different between the two items.
“Lets say a daily lease on a Dinning Car or Car dedicated to eating is approx $7,000.00”…
Uhmm, a $4 million car on a thirty year lease would be $320,000 a year for capital, or $902/day + 10% spares, $0.65/carmile in incremental haulage costs (fuel and track fees) and $0.30 carmile for heavy maintenance on say 900 daily miles gets you to $855.
So $1850/day + daily maintenance and staffing at $2650/day perhaps, so a total of about $4500/day + food and consumables. $4 million would be Superliner, so figure 3 meals at 140 patrons each, about $10.75 per patron to cover the “house” and staff + food and consumables at a few dollars over that. You would skew the fixed cost recovery to the meals that people expect to pay more for, breakfast and dinner.
The primary issue is putting a large volume of patrons through a full service dining car and having it open for outside of normal hours as a coffee shop or bar.
I believe I have indicated an approach to reducing costs while preserving quality and also making the lives of food service people a bit more normal and pleasant. But based on some of the ideas expressed, as well as some history, I would go further. The New Haven diners were reputed to make money. But it was not the dining car service that made money; the money was made by the bar service cars on evening commuter trains, which charged double and triple for drinks as compared with a neighborhood bar, and still had people line up two and three deep at the counters. Possibly dining cars should offer souvenere merchandize related to train travel and the specific scenery viewed from the train windows? Or are there other services or products that can be sold on a train to bring in a profit? One time on the all-Pullman 20th Century I had my pants pressed. I think I just tipped the porter two dollars instead of one dollar, but this could have been a charged-for service. I was tempted to use the on-train barbershop but did not.
I was throwing numbers out there based on leasing an existing private dining car and they are probably on the high side. However, I very seriously doubt your going to get a 30 year lease on rail passenger equipment. Let me know when you do.
$2650 a day for maintenence and staffing? Too low.
140 patrons eating in the dining car in all three seatings? Which Amtrak LD train are we talking and whats the average train ridership per day?
$10.75 avg check. For the amount of patrons you give, thats going to be approaching break even but it will not be profitable…even with the extra service.
You need “hundreds” at least at each sitting. Ridership on Amtrak LD is nowhere near that.
I would tend to agree with that. Full Liquor service is a major breadwinner and my Sub Shop would have been fairly profitable and still open if I could have had a liquor license per the franchise agreement. The guy two doors down had one for his Italian Restaurant and was making money around the clock with more staff (labor) than me…just because of the booze.
Issue here is the wine on Amtrak is pretty crappy and I don’t think they have any good bartenders that know how to mix Two key components they would have to change. Then also you have to pay increased insurance rates if you serve alchol but the rates pale in comparison to what it adds to the bottom line. &