1. 1 Long Distance Travel in GB some insights and forecasts David Quarmby CBE Member and former Chairman, Independent Transport Commission Transport Planning Society 24 November 2009

2. 2 Agenda Introduction Patterns of long distance travel Interpreting the drivers of travel Looking at scenarios to 2030 Conclusions Agenda

3. 3 Travel over 50 miles a neglected area of policy Significant proportion of all CO2 emissions Lots of modal-specific policy – rail, aviation, strategic road networks…are they linked up? Unexpected things happening – explosive growth of rail travel; road traffic much less fast, but congestion growing; domestic aviation grows (but less to Heathrow) ITC commissioned research to explore What is long distance travel about? What are the patterns? What are the drivers of travel and what can influence it? How might this change with different policy scenarios? Introduction

4. 4 Agenda ITC commissioned Professor Joyce Dargay, Leeds ITS, to construct 4-mode aggregate demand model, to back-cast known travel trends to 1996 and forecast forward to 2030 Report completed, to be published with ITC covering report January 2010 Thanks to Joyce Dargay for her significant piece of research ITC is very grateful to core sponsors Go-Ahead, Stagecoach and Arriva, and to project sponsors Department for Transport, Rees Jeffreys Road Fund, and Network Rail Grateful to David Bayliss for chairing the discussion panel, and to Joyce Dargay for joining us to give further insights into the research Introduction

5. 5 Agenda Introduction Patterns of long distance travel Interpreting the drivers of travel Looking at scenarios to 2030 Conclusions Agenda

6. 6 Scope 4 modes: car rail air coach 5 journey purposes: business commuting leisure holiday visiting friends and relatives (VFR) 2 distance bands: 50 to 150 miles 150 miles and greater Domestic travel by residents of GB within GB Over 50 miles 1-way Modelling Aggregate Demand

7. 7 Data Sources Principal data sources National Travel Survey 1995 – 2006 NTS 2007, 2008 for certain analysis Transport Statistics Great Britain (TSGB) Lennon (rail ticketing data) Long Distance all-mode Travel Survey for this study by ITS Other sources include Various DfT publications; HM Treasury; ORR; CAA

8. 8 Travel by Mode Trips over 50 miles CarRailCoachAirTotal Trips 16.92.31.10.220.5 Long distance as % of all trips by mode 3%15% 100%2% Miles 1654252132752114 Long distance as % of all mileage by mode 29%54%68%100%31% Mode share % of long distance mileage 78%12%6%4%100% Average trip length, miles 98110122406103 Average annual long distance travel per capita, mean 2002-06, NTS

9. 9 Travel by Mode Trips over 50 miles CarRailCoachAirTotal Trips 16.92.31.10.220.5 Long distance as % of all trips by mode 3%15% 100%2% Miles 1654252132752114 Long distance as % of all mileage by mode 29%54%68%100%31% Mode share % of long distance mileage 78%12%6%4%100% Average trip length, miles 98110122406103 Average annual long distance travel per capita, mean 2002-06, NTS

10. 10 Travel over Time Total long distance travel, 3-year moving average 1995-2006 NTS

11. 11 Comparison with Total Travel Total passenger miles by mode (1970 – 2007), TSGB*, and total long distance miles (1996 – 2005), NTS * TSGB includes short distance travel and travel by non-households and non-residents

12. 12 Travel by Purpose Percent of long distance travel by purpose, NTS

13. 13 Travel by Journey Purpose Mode Shares CarRailCoachAirTotal Business7513210100 Commuting742321100 Holiday759124100 Leisure799111100 VFR841231100 Mode shares of distance travelled by journey purpose, %, mean 2002-2006, NTS

14. 14 Travel by Journey Purpose Mode Shares CarRailCoachAirTotal Business7513210100 Commuting742321100 Holiday759124100 Leisure799111100 VFR841231100 Mode shares of distance travelled by journey purpose, %, mean 2002-2006, NTS

15. 15 Travel by Mode & Distance CarRailCoachAirTotal < 150 miles841150100 150+ miles6814810100 Mode shares of distance travelled by distance band, %, mean 2002-2006, NTS CarRailCoachAir < 150 miles6857510 150+ miles324349100 Total100 Distance band shares of distance travelled by Mode, %, mean 2002-2006, NTS

16. 16 Patterns of long distance domestic travel Key points one third of all travel is over 50 miles the car dominates with nearly 80% of travel, rail accounts for 12%, coach and air share 10% car dominates for all journey purposes; rail strong for commuting and VFR; rail and air significant for business; coach significant for holidays and leisure car travel seems to have flatlined in the last few years, with rail continuing to grow 70% of all long distance travel is for holidays, leisure and VFR; business 20%, commuting 10% generally balanced between 150 miles; car journeys tend to be shorter

17. 17 Agenda Introduction Patterns of long distance travel Interpreting the drivers of travel Looking at scenarios to 2030 Conclusions Agenda

18. 18 The drivers of long distance travel Elasticities income elasticity of 0.5 means that a 10% change in income will generate a 5% change in long distance travel price elasticity of -0.3 means a 10% increase in cost or fares will cause a 3% drop in demand cross-elasticity – the impact on (eg) rail travel of a particular change in travel times by car cross-elasticity of 1 of rail travel w.r.t. car travel time means a 5% worsening of car travel times will produce an increase in rail travel of 5%. But don’t forget the effect of relative scale.

19. 19 The drivers of long distance travel Deriving and interpreting elasticity estimates income – short and long run demographic and geographic factors own and cross elasticities – price and time

20. 20 The drivers of long distance travel Income elasticities PurposeDistance miles CarRailCoachAir Business50<150 150+ 0.34 0.54 1.39 1.51 0.00 * 1.53 Commuting50<150 150+ 0.31 0.50 1.34 1.57 0.00 **** Holiday50<150 150+ 0.38 0.61 0.64 0.56 0.50 0.43 * 1.31 Leisure50<150 150+ 0.31 0.47 0.50 0.43 0.00 0.28 * 1.26 VFR50<150 150+ 0.53 0.70 0.25 0.42 0.00 0.31 * 1.63 AllAll >500.460.830.101.44

21. 21 The drivers of long distance travel Income elasticities PurposeDistance miles CarRailCoachAir Business50<150 150+ 0.34 0.54 1.39 1.51 0.00 * 1.53 Commuting50<150 150+ 0.31 0.50 1.34 1.57 0.00 **** Holiday50<150 150+ 0.38 0.61 0.64 0.56 0.00 * 1.31 Leisure50<150 150+ 0.31 0.47 0.50 0.43 0.00 0.28 * 1.26 VFR50<150 150+ 0.53 0.70 0.25 0.42 0.00 0.31 * 1.63 AllAll >500.460.830.101.44

22. 22 The drivers of long distance travel Income elasticities car – less than 0.5 Similar across journey purposes, slightly higher for VFR, higher for longer journeys rail – average under 1 But much higher for business and commuting, similar to car for other journey purposes coach – unresponsive to income except for longer distance leisure and VFR air – about 1.5 for all journey purposes - similar to rail for business as income grows, very different patterns of travel growth

23. 23 The drivers of long distance travel Demographic and geographical factors long distance travel analysed by household income, gender, age, employment status Region of residence, size-scale of municipality or rural number of adults in household, whether children, whether main driver of company car type of residence, length of residence Separate models for each of four modes, five purposes and two journey lengths, and the forty in combination

24. 24 The drivers of long distance travel Demographic and geographical factors overall income elasticity 0.42 longer distance travel more for men than for women more for those under 60 vs over 60 more for employed/students than for unemployed/retired more for those with company cars declines with longevity at current residence

25. 25 The drivers of long distance travel Demographic and geographical factors those in the South West and East Midlands travel more, and those in the WM and northern regions travel less than average long distance travel increases as size of municipality decreases, greatest for those in rural areas the larger the household the less the per capita long distance travel, and least in families with children greater for those living in detached houses....!

26. 26 The drivers of long distance travel Own cost/price and time elasticities – long run car: cost elasticities -0.3 to -0.8, more for holiday/leisure rail: around -0.5 for business and commuting; -1.0 to -1.6 for holiday/leisure/VFR coach: -0.8 to -1.0 air: -0.4 for commuting; around -1.0 for all other car: own time elasticities: -1 to > -2 generally; -2.5 for more distant holidays rail: -0.5 to -0.75 for commuting; -1.5 to 3.0 for all other coach: -1.3 to -1.75 air: around -0.5 across all purposes

27. 27 The drivers of long distance travel Significant cross elasticities – cost/price and time for business travel: ~ 0.2 c/e to rail w.r.t. car travel cost for commuting: ~ 0.2 c/e to rail w.r.t. car travel cost for <150 miles for holiday: 0.4 to 0.8 c/e to rail w.r.t. car travel cost for leisure and VFR: 0.2 to 0.4 c/e to rail and coach w.r.t. car travel cost for business travel: ~1 c/e to rail w.r.t. car travel time for commuting: ~0.5 c/e to rail and air w.r.t. car travel time for holiday: ~1.5 c/e to rail and ~0.5 to coach w.r.t. car travel time for leisure and VFR: 0.7 to 1.0 to rail and coach w.r.t. car travel time; ~1 to coach w.r.t. rail travel time

28. 28 The drivers of long distance travel So what does this mean for the drivers of long distance travel by each mode? by car: income has a moderate effect, as does the cost of motoring. But worsening of travel times does have a significant impact, especially for longer distance holidays, and does divert demand to rail for business travel, and to rail and (less so) to coach for holidays by rail: income has a major effect on business and commuting, and a strong effect on other journey purposes; fares changes have a moderate effect on business and commuting, but a major effect on holiday/leisure/VFR; changes in travel time affect rail similarly. Switching to other modes is modest or non-existent by coach: travel unaffected by income. Coach fares and travel times have significant effect on demand. Switching to other modes non-existent by air: income has a major effect for all purposes; price elasticity moderate for commuting, high for all other purposes; moderate switching between air (proportionately) and car and rail as their travel times change

29. 29 Agenda Introduction Patterns of long distance travel Interpreting the drivers of travel Looking at scenarios to 2030 Conclusions Agenda

30. 30 Agenda Set a base case – with economic, demographic, cost and network assumptions – and project base case to 2030 Identify alternative scenarios Forecast alternative scenarios to 2030 and compare with base case Scenarios to 2030

31. 31 Input Assumptions to 2030 Projections of the population (ONS, GAD) Population by age and gender % population 60+ The number of households Number of 1-adult households 20052030Annual % change % Change Population m58.568.80.65%+18% % population 60+21.2%27.9%1.10%+32% Households m24.831.81.00%+28% 1-adult households16.8%21.8%1.04%+30%

32. 32 Input Assumptions to 2030 Real GDP forecasts (HMT) – average of independent forecasts % growth per annum 2009201020112012 to 2030 April 2009-3.70.32.22.5 February 20082.02.6 2.5 Base case

33. 33 Input Assumptions to 2030 Crude oil price projections (DECC), 2008 US$/bbl DECC20102015202020252030 Scenario 27075808590 Scenario 384102120 Scenario 4103142150 Exchange rate: $1.60/ £ Base case

34. 34 Base Case Assumptions Increase 2009 to 2030 Source/assumptions Petrol prices+27% DECC Car fuel efficiency+23% 1% per year Per km fuel prices+4% as above Motoring costs0.5% other motoring costs constant Journey time (roads)7.5% DfT NTM 2008 Rail fares+28% RPI+1% Air fares-12.5% half of DfT’s assumption

35. 35 Projections 2030 % Change from 2005 CarRailCoachAirTotal Base case30352512634

36. 36 Alternative scenarios Impact on all LDT *Assumptions Constant real rail faresRail fare 0% (+28%)Real rail fares at today’s level Road user ChargingMotoring cost (+0.5%) +21% bus. & comm. +8% other Journey time +3% (+6%) 5p/km business & comm. 2p/km all other purposes Air fares: APD £10Fares +1% (-12.5%)£10 increase Air fares: 25% fallFares -25% (-12.5%)DfT projections 2008 Car: low fuel efficiencyMotoring cost +10% (+0.5%)No improvement in eff. (23%) Car: high fuel efficiencyMotoring cost -10% (+0.5%)DfT: eff. 92% petrol, 43% diesel Motoring costs +1% paMotoring cost +23% (+0.5%)Increase in total motoring cost Low car travel growth0 income elasticity for car travel * % change 2009 to 2030 (base case % change)

37. 37 Projections 2030 % Change from 2005 CarRailCoachAirTotal Base case30352512634 Constant real rail fares28601712035 Road User Charging27482712333 Air fares: £10 APD30362510133 Air fares: -25%30332415435 Car: low efficiency24382712730 Car: high efficiency36312212538 Motoring costs 1% pa19423012826 Low car travel growth12352512620

38. 38 Projections 2030 % Change Base Case CarRailCoachAirTotal Constant real rail fares-1.419.0-5.8-2.50.9 Road User Charging-2.210.32.0-1.5-0.3 Air fares: £10 APD0.21.30.1-10.9-0.4 Air fares: -25%-0.2-1.3-0.112.50.5 Car: low efficiency-4.42.72.20.5-2.8 Car: high efficiency4.7-2.7-2.2-0.53.0 Motoring costs 1% pa-8.85.74.61.1-5.6 Low car travel growth-14.00.0 -10.5

39. 39 Sensitivity Tests Projections 2030 Billion Person Miles CarRailCoachAirTotal Actual 200591.115.06.94.4117.4 Base case30%35%25%126%34% GDP 1.25% pa from 2012 (2.5% in Base case)13%3%23%48%14% Low income elasticities (33% of Base case)24% 25%93%27%

40. 40 Agenda Introduction Patterns of long distance travel Interpreting the drivers of travel Looking at scenarios to 2030 Conclusions Agenda

41. 41 Agenda On reasonable base case assumptions we forecast a 34% increase in long distance travel – 125% by air, 35% by rail, 30% by car and 25% by coach – mostly income driven Universal road charging cuts car demand by 10%, but rail demand is very sensitive (48% growth vs 35% growth) Variations in car fuel efficiency (and cost) affect car travel by + 20%, and a 1% rise in motoring costs especially Air travel very sensitive to APD increases, and fares variations – but still >100% growth for any of the scenarios Coach travel affected by rail pricing and motoring costs lower GDP growth (1.25%) halves the travel growth Conclusions

42. 42 Long Distance Travel in GB some insights and forecasts David Quarmby CBE Member and former Chairman, Independent Transport Commission Transport Planning Society 24 November 2009