It was said that the Pullman Company was the largest Hoteleir in America. So how did they make there money?
The Old Fashioned way!
The question could be over which version of The Pullman Company. Are you referring to the pre-1947 version which owned by Pullman-Standard, the carbuilder; or tht post-1947 version which was a joint subsidiary of just about every railroad that operated passenger service?
I believe that long-term contracts covering every possible service and contingency were involved. Someone with a better knowledge of Pullman Company operations might be able to provide basic answers.
Just to complicate matters, not all sleeping cars were Pullmans.
When Pullman was operating it provided cars and staff for those cars. A premium fare over and about the actual transportation was charged to ride in a Pullman car. That money went to the Pullman Company.
The railroads hauled Pullman cars and did not have to provide cars for Pullman passengers. They charged Pullman riders for their transportation and that money was theirs to keep.
Most Pullman cars were open sleeping cars. There were all kinds of other cars too – library cars and cars with barber shops and beauty salons, for example – but most were open sleepers. The extra fare for those cars was quite modest for many years.
After 1947, the Pullman company that operated the sleeping and parlor cars entered into agreements with the various railroads over which the cars (owned by the railroads and leased to Pullman) operated which provided Pullman with the income to continue staffing the cars and providimg the materials necessary for the operation and the staff necessary to oversee the operation.
The space charges that were levied in addition to the transportation charges went directly to Pullman. It is interesting that when you traveled from Chicago to a West Coast city, you paid the same space charge for a given accommodation whether the trip took two nights or three nights, and no matter which road you took–just as the railroads charged the same fare no matter what the difference in mileage between the two endpoints was. Some roads charged an extra fare for a trip on certain faster trains, but the space charge was the same.
As to accommodations, most accommodations in the heavyweight cars were open sections, with few private rooms, whereas most of the accommodations in the lightweight cars were private rooms. ranging from rooms for one passenger to rooms for three passengers.
the exact same service is still availabls today as sleeping car ao amtrak. they are the latest version of the original pullman business plan. it is not that much more to go first class and it is so much better than flying. the journey is the vacation[<:o)] span=“” id=“mce_marker” data-mce-type=“bookmark”>
Some differences as pointed out above. Also, to be accurate, one paid 1st class to ride in a Pullman car, plus a space for the accommodation chosen, from an upper to a drawing room. And some accommodations required more than one ticket…
(From NYC TT, Dec. 5, 1943)
One way, Chicago to NYC: $20.02 coach; $29.98 in Pullman Cars.
Plus $6.95 for a lower berth, $5.30 for an upper, $9.75 roomette, bedroom $12.50, compartment $13.90.
There was a Special Service Charge only on trains #25 and 26 (The 20th Century Limited) of $3.00.
Since many of the better trains were all-Pullman and faster than trains carrying coaches, a passenger traveling Chicago to NYC paid 84% more to ride a Pullman lower vs. coach: $36.93 vs. $20.02. If he/she rode the 20th, it was $39.93, almost double. And a passenger paid to eat in the dining car, just as in a restaurant. With inflation, today’s charge is about the same, but with food tossed in.
For many years the Pullman company built the railroad cars and also operated them for the railroads. Then, and it may have been 1947, the Supreme Court ruled this was a violation of the Sherman Anti Trust Act. Pullman then continued manufacturing the cars but stopped operating them in a complicated agreement.
Ah ha! The answer to the question is found in the Summer 2008 issue of Classic Trains (pp.20-27), and my copy was sitting right by my desk.
In 1944, Pullman was ordered to give up either the car-operating business or the car-building business (Pullman had not wanted to operate sleepers built by other companies). In 1947, a consortium of 57 (later joined by two more) railroads bought the operating company which retained 2,800 heavyweight and 6 lightweight cars; the remainder of the cars in Pullman service were sold to the railroads, which leased them back to the Pullman Company, which operated and maintained the cars. When the railroad bought new cars, no matter what company had made them, they were leased to Pullman.
The economics of who paid what are interesting: if the Pullman income on a particular line exceeded expenses, Pullman received one fourth of the profit, and the railroad(s) kept three-fourths. However, if the income was less than the expenses, the railroad(s) made up the difference to Pullman.
In all cases, the railroads’ income came from the railfare, and, until the divestiture, Pullman’s income came from the space charges; after the divestiture, Pullman’s income was a mixture, as is described above.
I took the 1943 numbers and converted to buying a ticket today. From today through about a week from now the NY-Chicago coach fare varies from$99 -$125-$156 depending on the day of the week etc…Using the $125 value all figures in the 1943 example would be mulitplied by 6.24. So todays figures are:
Coach $125
First Class $187.18
Roomette room charge 60.84
The Amtrak private car rate is $2.00 per mile times 960 mile trip = $1920 to Amtrak. 20 passengers in a 21 roomette car would pay $96 each of their first class fare to Amtrak. The remainder of the $187 first class fare and the 60.84 would go to the Sleeper company.
It appears the Pullman Company felt they could make a profit in 1943 off the room charge only buying and maintaining the car, paying the Porter, conductor and reservation.
Currently the Amtrak patron pays the $125 plus a $481 room charge to ride on the Lakeshore this week whereas the 1943 rate is 248.02. Note the rate would be $156 at full ocuppancy and the sleeper company content with the $60.84.
I see Pullman Rail Journey has higher rates but they are providing dining and lounge service.
If Amtrak provides the engine, coaches, some sort of food and lounge service what am I missing that private investors could not run sleeper service? Someone would have to figure how the cost of a new car compares to 1943 etc real dollars. I think the federal government would have to promise to buy the sleeping cars if Amtrak discontinued long distance trains to the point sleepers became surplus.
Amtrak could lease its sleeper fleet to whoever presents the best purposal to take over and grow sleeper service for $1 per year per car. for five years with the right to purchase for depreciated value.
The Pullman Company went out of business when demand died and they have thousands of cars in inventory, multiple shops, labor contracts etc. Some one starting over with wha
Dixie Flyer: I’m not sure, but using the correct multiplier might show something. Not sure where you got your conversion factor from. This source gives a multiplier of 13.59.
http://www.dollartimes.com/calculators/inflation.htm
This one gives a multiplier of 13.46.
http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1.00&year1=1943&year2=2013
Split the difference and you get 13.53.
I am not sure that Inflation Calculators are reliable. A New York-Chicago Train Ride on the 20th Century in 1929 would be comparable to airfare today.
Then add in the checked baggage fee, the pollow fee, the blanket fee, the peanut fee, the coke fee, the cup fee for the coke, the ice fee for the cup used for the coke, the use of the rest room fee, the seat belt fee, the jet way fee not to mention the parking fees at one end or the other.
Actually if you buy your ticket long enough in advance you can get a $99 coach fare New York to Chicago on the Lake Shore Limited, the Capitol Limited or the Cardinal. If you take the Pennsylvanian and change in PIttsburgh to the Capitol Limited the fare is $162.
And your evidence that they are unreliable is?
I was just using the $125 N.Y. Chicago coach fare which can be $99 or $156 depending on the day. Coach fares have to be in line with Greyhound Bus Fares and the times I have compared them they are close enough. Usually you can charge a little more for a train seat because of leg room and on board dining and lounge services.
Then using the $2.00 a mile private car rate which is freely negotiated that tells me inregardless of calulator factors twenty people paying $96 dollars would cover the first class fare or $2.00 a mile charge.
That just gets you back to point the Pullman Company made is living off the room fee only. So if I did take your 13.59 calulator value times the 1943 roomette room charge of $9.75 I get a room rate today of $132.50. So a roomette on a sold out 20 roomette car would be 96 plus 132 = 228.50 A slumbercoach would be half of that (40 people)…
Finally remember the 1943 example was with alot of trains using steam engines, five man 100 mile crews and railroads financial supporting branch lines gone now or sold off. So your inflation calulation must account for a very different industry now vs 1943.
Amen to Dixie Flyer…Trying to compare the railroad of 1947 to the railroad of 2013 is apples to oranges
More like watermelons to peanuts.
This may not be germane to the discussion of comparing costs before 1969 and costs today, but we need to remmber that Pullman’s finances were entirely separate from those of the railroads’, and Pullman had a large non-operating staff. Today, there is one company operating all of the services, and the same system takes care of both transportation and sleeping services.
And it wasn’t just Pullman and one railroad. It was Pullman and how ever many railroads a person was traveling over. And some railroads didn’t use the Pullman Company.