1. Market Research and Analysis Demand Forecasting Overview May 30, 2013 Agenda Overview of Demand Forecasting Model Demand Forecasting

2. Market Research and Analysis 2 Overview of Demand Forecasting Model Demand forecasts are developed using models created and maintained for Amtrak by AECOM Separate models have been developed for the: –Northeast Corridor –Long Distance routes –State Corridor routes These models are used to forecast both: –The expected demand for the current service (FY14 forecast as an example) –The impact of a proposed change of service Proposed changes of service include: –Adding a station –Adding a frequency –Change in travel time –Change in schedule –Service change (WiFi as an example)

3. Market Research and Analysis 3 Composition of the Models The demand forecast models are based on extensive market research and other travel market data and inputs Market research provides insight on both Amtrak customers’ and travel consumers’ sensitivity to: –Departure and arrival time –Travel time –On-time Performance (OTP) –Price –Frequency Travel market data and inputs include: –Amtrak ridership and ticket revenue data –Amtrak timetables and pricing –FAA air passenger data –Airline schedules and fares –Socio-economic data and forecasts (provided by Moody’s Economy.com) –Highway network data providing competing auto travel times

4. Market Research and Analysis 4 Composition of the Models (continued) Key independent variables that drive the model forecasts include: –Travel time –Frequency –Departure/arrival time-of-day slots –Average rail fares –OTP –Travel time and cost of competing modes of travel –Population, employment, and income of each market served

5. Market Research and Analysis 5 How Forecasts are Developed The NEC and State Corridor models apply a two-stage approach: –First, the total travel market size (all modes) is forecasted –Then the total demand is divided by mode Forecasts are built on the actual demand for each market over the last 12 months Forecast are done at the market/city-pair level; the value for each of the independent variables listed below is determined for each market/city-pair –Travel time –Frequency –Departure/arrival time-of-day slots –Average rail fares –OTP –Travel time and cost of competing modes of travel –Population, employment, and income of each market served

6. Market Research and Analysis 6 Examples of Recent Types of Demand Forecasts FY14 demand –Ridership, ticket revenue and passenger miles were provided at the route/month level for FY14 –These can be provided at the city-pair level on request Adding new stations –We will calculate the incremental demand from a proposed station addition –Both incremental demand and demand transferring from current stations are considered and reported –The expected impact from the additional trip time is also included Change in travel time Changes in frequency Change in OTP Changes in schedule

7. Market Research and Analysis 7 FY15 Demand Forecast Schedule We will develop the initial forecast for FY15 at the route and month level in September 2013 We will update the FY15 forecast in January 2014 This revised forecast will be made available for FY15 negotiations in early February 2014

8. Market Research and Analysis 8 How Amtrak Market Research & Analysis Team Works with State Partners 1.Demand Forecasting –We provide detailed forecasts for current and upcoming fiscal years –We can forecast the expected changes in demand for proposed changes in service –We can deliver more detailed forecasts and reports at cost 2.Market Research –We provide ridership profiles for all state corridor routes. We are updating these this summer. They include the following for our customers:  Demographic: Who they are  Behavioral: What they do  Attitudinal: What they want –We manage specific market research projects at cost. Projects include:  Pre-campaign exploratory research  Post-campaign measurement (ROI)  Passenger and travel consumer segmentation  On-board ridership profiles and attitudinal studies  Qualitative research on service offering (current and proposed) 3.Reporting