Building for Customers

Building for Customers Florida High Speed Rail MARKETING PLAN Phase 1 Tampa-Orlando October 2003

Contents Introduction 1 1 A High Speed Rail Vision for Florida 2 2 The Market 3 3 Opportunities & Challenges (SWOT Analysis) 9 4 Service 10 5 Segments and target market 11 6 Pricing 12 7 Marketing Objectives 13 8 Key Strategies 14 9 Tactics & Execution 18 10 Budget Envelope & Master Schedule 21 i

Introduction An innovative approach to building a value-added customer experience for Floridians and their guests Success of the Tampa-Orlando High Speed Rail link will be the result of more than the equipment, stations and route alignments. Realizing the full benefit of this popular travel mode also requires a strategic offering that will optimize the satisfaction of the customers who use it. This plan maps an innovative approach to building a value-added customer experience for Floridians and their guests. An important characteristic of rail transportation is the experiential nature of the service. This drives the need for strategy and policy at the management level to support specific practices and activities at the detailed service delivery level that directly impacts the customer experience. Travel can be viewed as an extension of the customer s experience at the intended destination. Both the travel experience and the destination experience have a significant reciprocal influence on the customer experience and satisfaction. Research has shown that customers' evaluation of transportation services and their decision to patronize them depend equally on what services are provided and on how the operators deliver on various aspects of the trip experience being purchased. That is, the organization and operation of the staff, the information systems, the facility configuration, the station and train environments, and other resources are part of the product the customer is purchasing and are important to satisfaction and repeat patronage. Customers with bad service experiences will tell 11 people and those with favorable ones tell just 6 people. In other words, a company s reputation suffers twice the impact of its failures as opposed to its successes. Positive customer experiences will be critical particularly at start-up for the Florida High Speed Rail project, as there will be a high degree of public and media focus on this high profile initiative and first impressions are difficult to change. The need to deliver service excellence is further driven by the high standards and customer expectations set by Disney and the Orlando International Airport. Standards by which Florida High Speed Rail will be judged by customers will be likely set by their experience with these two organizations. The following are core principles upon which the marketing strategy for Florida High Speed Rail has been developed: The travel experience begins while the customer is still at home and is impacted by each contact point, including his/her trip on Florida High Speed Rail Service Employees are extremely important - key to successful implementation of the desired practices and key to improving levels of customer satisfaction Practices must be supported by policy and infrastructure Senior level commitment to the practices is a major component in assuring sucessful implementation Systematic approach to monitoring results is fundamental Execution and attention to detail are keys to success 1

The state population is expected to double over the next 25 years The Fluor-Bombardier Marketing Plan outlines a clear road map to meet these principles and delivers the final critical component in the start-up of a successful Phase 1 High Speed Rail link. Florida High Speed Rail Program, Phase 1, Part 1 1 A High Speed Rail Vision for Florida Demands on the existing transportation infrastructure and network for the movement of both people and goods in the state of Florida have increased dramatically in the past decade. Current levels of congestion on the highway system is calculated to cost each state resident $620 annually in wasted time and fuel and a total of 4.5 billion hours in lost time that could otherwise be applied to more productive use. And the problem can only get worse with the state population expected to double over the next 25 years. In the year 2000, voters in the state of Florida expressed their vision of future transportation by approving a constitutional amendment mandating the development of a statewide high-speed passenger rail network that would link the state's major population centers. In October 2002, the state invited interested parties to submit proposals for the design, construction and operation of the first proposed phase of the High Speed Rail network, linking the cities of Orlando and Tampa Bay. Fluor and Bombardier, two substantive private corporations with significant combined experience and capabilities in the areas of finance, design, construction, supply, installation, operations and maintenance of high-speed rail networks, joined forces to present a solution that provides the best value and overall solution for the state of Florida and its residents. FLUOR is a registred service mark of Fluor Corporation The Fluor-Bombardier partnership, operating as Florida High Speed Project Holdings Company, is committed to making Floridians' vision of their transportation future a reality by delivering an economic, self-sustaining solution comprised of the following elements: 2

Bombardier* JetTrain* high-speed rail technology - a made in America state of the art, high-speed train set A business, entertainment and tourism hub A project management approach that coordinates and integrates the design, construction, operations and maintenance of the systems civil and systems assets A management plan that facilitates a smooth transition from asset development to asset management from build to operate An operations and maintenance plan tailored to the highest system safety and reliability A marketing strategy and plan that ensures that the needs of project stakeholders and future customers are appropriately addressed, thus maximizing ridership potential and return on investment, while fulfilling the desired reductions in traffic and congestion. 2 The Market 2.1 Size, Growth Rates and Projected Ridership Spread over an area of 66 square miles, Orlando is the biggest city in central Florida. A business, entertainment and tourism hub, Orlando is just 4 miles from Universal Studios and 20 miles from Walt Disney World. Disney s presence, of course, is the primary reason behind the fact that Orlando is the fifth-ranking US destination for overseas travelers. Tampa Bay, located on the east cost of Florida, enjoys an unusually strong and robust economy in comparison to the general US economic doldrums. Recently described as "Wall Street South", the "quality of life" is often cited as one of the factors that have attracted a growing number of businesses to locate in the region. The population of Metro Orlando, encompassing Orange, Seminole, Lakeland and Osceola Counties was estimated at 1.4 million in 2000, projected to grow to 1.6 million by 2005 and to 2.2 million by 2025. The Tampa Bay region was home to an estimated 3.4 million residents in 2000, with approximately 2.2 million located in Hillsborough, Pasco and Pinellas counties. Polk County's population was estimated at 433,000 in 2000. Tampa Bay, Polk County and Orlando are the three metropolitan areas that will host the first proposed phase of the Florida High Speed Rail program. The ridership study commissioned by the Florida High Speed Rail Authority indicated that total corridor population is forecast to increase 33 percent from 2002 to 2025. The Orlando region (Orange, Seminole and Osceola Counties) population is expected to increase by 46 percent over this same period. * Trademark(s) of Bombardier Inc. or its subsidiaries The Tampa Bay Region (Hillsborough, Pasco and Pinellas Counties) population is forecasted to increase by 23 percent and Polk County by 38 percent. 3

Employment in the corridor is expected to increase by 46 percent Employment in the corridor is expected to increase by 46 percent by year 2025. The Orlando and Lakeland regions will increase by about 57 percent, the Tampa Bay Region by about 37 percent. Overall, the number of hotel rooms is estimated to increase by about 83 percent between 2002 and 2025. The highest rate of increase is expected in the Orlando Region (about 100 percent). Tampa Bay Region hotel rooms are expected to increase about 46 percent and Polk County rooms by about 22 percent. The Authority's ridership study estimated annual ridership within the corridor between Tampa, Lakeland and Orlando by both local residents and visitors (Greeneway alignment) in 2010 to range from 1,657,000-1,904,000 generating revenues of $27.9 to $29.7 million. This is anticipated to grow to ridership of 2,450,000-2,844,000 and revenues of $41.6 - $44.5 million by 2025. The Orlando market includes a large segment of captive customers. These are customers who purchase bundled transportation and/or accommodation packages. In this case the choice of mode is not made by the traveler but is instead made by the transportation providers and attractions that contract for the services. Major purchasers of service in the region include: Disney, Major Hotel properties and the Convention Center. Ridership and Revenue Forecasts MARKET SIZE BEELINE ALIGNMENT GREENEWAY ALIGNMENT Ridership Revenue Ridership Revenue (Thousands) (Thousands) (Millions) (Thousands) (Millions) AECOM WSA AECOM WSA AECOM WSA AECOM WSA AECOM WSA Intercity Market 1 Tampa Orlando 4,400 4,504 582 453 $14.7 $11.4 484 377 $12.1 $9.3 Tampa Lakeland 3,430 3,427 339 326 $3.9 $3.7 341 326 $3.9 $3.7 Lakeland Orlando 2,780 3,022 275 285 $4.7 $4.8 226 231 $3.8 $3.9 Subtotal 2 10,610 10,953 1,196 1,064 $23.3 $19.8 1,051 934 $19.9 $16.9 Airport Access (Choice Market) OIA Intl. Drive 1,610 1,604 210 266 $2.5 $3.2 N/A N/A N/A N/A OIA Disney 2,950 3,207 462 851 $5.6 $10.2 537 873 $6.5 $10.5 OIA T. Bay & Lakeland 450 464 66 93 $1.6 $2.2 69 97 $1.6 $2.3 Subtotal 5,010 5,275 738 1,210 $9.6 $15.6 606 970 $8.1 $12.8 TOTAL 15,620 16,228 1,934 2,274 $32.9 $35.4 1,657 1,904 $27.9 $29.7 Airport Access (Captive Market) 3 Ridership Revenue (Thousands) (Millions) OIA Intl. Drive 530 $6.4 530 530 $6.4 $6.4 OIA - Disney 2,190 $26.3 2190 2190 $26.3 $26.3 TOTAL 2,720 $32.6 4 Grand Total 2,464 2,804 $39.3 $41.8 3,847 4,094 $54.2 $56.0 Source Ridership Study EXHIBIT 7-1: 2010 Annual Ridership and Ticket Revenue Forecasts by Market 1 Candidate market does not include areas outside of the service area or sub markets not likely to divert traffic to HSR. 2 Intercity market regular commuters using prepaid discount fares includes 3 Captive market from the International Drive area and Disney are estimated based on survey data 4 Revenues are expressed in 2002 dollars 4

2.2 Current Travel Options Orlando International Airport is a major port of entry for international visitors in the continental United States 2.2.1 Air Orlando International Airport served approximately 25 million domestic and 1.7 million international passengers in 2002. It is ranked 15th largest airport in the US; 24th in the world. Its focus on customer service has earned it a first place ranking in Customer Satisfaction amongst US airports and it is also ranked the world s 4th most convenient airport. There are more than 450 flight arrivals and 450 departures daily, with scheduled non-stop service available to 68 domestic and 25 international destinations. It is a major port of entry for international visitors in the continental United States. At the time of the Florida High Speed Rail Authority s ridership study, air travel between the Tampa and Orlando markets was limited to one flight per day, with mid-morning departure from Tampa and an early evening return from Orlando. FAA records indicate that there were an estimated 20,000 person trips (oneway) in the year prior to September 11, 2001. Of these trips, 16,000 were for connections to other flights, while 4,000 represented true origin to destination travel between the two markets. Airfare Tampa-Orlando expedia.com search results One Way Return Adult Child 2.2.2 Road Network Personal Vehicles Metro Orlando is served by a well-developed road network. Florida s Turnpike and Interstate 4 bisect in Metro Orlando and other major state roadways include U.S. 441, 17/92, 27 and 192. Toll roads include State Road 528, State Road 408 and State Road 417, a 100-mile beltway encircling Metro Orlando. The 12.5-mile Osceola Parkway links the international airport to major attractions and six regional arterial highways. Department of Transportation traffic counts reveal that intercity travel between the Tampa and Orlando markets was approximately 69,200 vehicles in 2000 and is forecasted to grow to 74,000 by the year 2010. 2.2.3 Private Operators $177 N/A There are more than 40 private operators that cater specifically to the tourist market, moving visitors between the airport, local hotels and area attractions by bus and van. The largest of these is Mears, who is also the current operator of the Disney bus system. $274 N/A 5

The current ground transportation offering includes taxis, towncars, limousine services and buses 2003 Mears Tariff to Orlando International Airport Adult One Way Adult Round Trip Child One Way Child Round Trip Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 ORLANDO INT'L DOWNTOWN, INTERNATIONAL AIRPORT HOTELS S. ORLANDO DRIVE LAKE BUENA VISTA, WALT DISNEY WORLD HWY. 192 W. $ 9.00 $14.00 $14.00 $16.00 $22.00 $14.00 $24.00 $24.00 $28.00 $40.00 $ 6.00 $10.00 $10.00 $12.00 $18.00 $10.00 $17.00 $17.00 $20.00 $31.00 KISSIMMEE, E.S. 27 & 1-4. HWY. 192 east of S.R. 535 WINTER PARK, MAITLAND Mears also markets a SuperPass product that further bundles airport transfers with unlimited transfers between Disney attractions in Mears zones 3 and 4. Other representative transportation providers include Murray Hill Transportation Group, Prestige TownCar and AccessLine Transportation. 2003 Mears SuperPass Adult Child $59.00 $70.00 $81.00 $92.00 $103.00 $52.00 $63.00 $74.00 $85.00 $96.00 Additional Nights available at $11.00 3 Nights 4 Nights 5 Nights 6 Nights 7 Nights Murray Hill Transportation Group From Orlando Int'l Airport Magic Kingdom Resorts & Kissimmee 192 Animal Kingdom & All-Star Resorts All Other Disney Resorts Universal Studios Downtown Orlando International Drive One Way Round trip $50.00 $90.00 $50.00 $90.00 $45.00 $80.00 $45.00 $80.00 $45.00 $80.00 $40.00 $75.00 Prestige TownCar Orlando International Airport Transfer Rates Hotels & Resorts International Drive / Convention Center Area Lake Buena Vista * After $5 Off Coupon for Internet Reservations AccessLine Transportation Prestige TownCar Round Trip Family of 5 Shuttle or Bus Per Person $80.00* $25.00 $80.00* $28.00 $80.00* $28.00 Compare to Others Round Trip International Drive / Convention Center Area $80.00* $28.00 $90.00 Hwy 192 Area To UCF Hotels Downtown Orlando International Drive Hotels Universal Studios Hotels Lake Buena Vista Hotels Disney Resorts Maingate Area Hotel - Hwy 192 Additional Passenger $35.00 $65.00 $40.00 $75.00 Up to 4 Passengers. Includes meet and greet at the baggage claim and road tolls. Taxi One Way Round trip $40.00 $75.00 $40.00 $75.00 $45.00 $75.00 $45.00 $75.00 $45.00 $80.00 $ 5.00 $10.00 $65.00 $80.00 $90.00 6

2.2.4 Public Transit High Speed Rail will draw from the auto trip market, particularly for intercity trips The public transit agency, Lynx, serves Orange, Seminole and Osceola counties. Lynx offers an extensive public transportation system recognized for its innovation in service design and delivery. In addition to conventional services the Lynx Lymmo is a branded bus service that operates on a three-mile dedicatedlane system in downtown Orlando. Lymmo service is available free-of-charge to customers. 2.3 Competitive Analysis Metro Orlando is served by a range of transportation options. Visitors traveling to and from Orlando can do so via the extensive highway network that connects it to all major metropolitan centers. Air travel is accommodated by a choice of domestic and international carriers, operating out of Orlando International and several other airports. Local travel options include both public and private transit service operators (Disney s manages its own transit fleet), shuttle and taxi services, and personal automobiles. The availability of High Speed Rail Service in the marketplace can be seen as both a source of competition and complimentary to existing transportation options. High Speed Rail poses no direct competition to international or interstate air travel, but will compete directly with air travel in the common markets that it serves. Air travel may provide faster flight plan times, but once airport access, check-in, security and baggage claim wait times are factored in, the total travel time by rail is very competitive. For example gate-to-gate travel time between Tampa and Orlando is approximately 45 minutes. An additional hour and 20 minutes needs to be factored in to arrive at total air trip travel time for direct flights. At the current service level one non-stop flight per day- air service does not pose a significant threat to High Speed Rail, nor does it constitute a significant source of potential new riders. High Speed Rail will draw from the auto trip market, particularly for intercity trips. The Florida High Speed Rail Ridership Study team estimated the uncongested travel time between the Tampa and Orlando markets (Downtown Tampa to Orlando International Airport) in 2000 to be 82 minutes increasing to 91 minutes during peak periods. Travel time during these periods is projected to increase to 84 and 99 minutes by 2025. Rail travel times of approximately one hour are very competitive with private vehicles and transit alternatives even when transfers are factored in. Travel by rail also allows customers to take advantage of amenities and facilities and make more productive use of their travel time. 2.4 Economic Environment The dominant feature of the economic landscape is tourism. Metro Orlando is home to many popular tourist attractions, including Walt Disney World, Disney- MGM Studios, Epcot, Disney's Animal Kingdom, Universal Studios Florida, Universal Studios Islands of Adventure, and Sea World of Orlando. 7

The development of the High Speed Rail system in the market will help fuel economic growth The region hosted more than 39.12 million U.S. visitors and 2.86 million of overseas visitors in 1999 and enjoyed an estimated 23 million overnight tourist visitors in 2002, which is projected to grow to 27 million by 2005. Metro Orlando has approximately 107,000 hotel rooms - the second largest concentration of hotel rooms in the U.S. In addition to hosting a significant number of vacationers, the hotels also benefit from a robust convention and trade show market. The Orlando/Orange County Trade and Convention Center, the nation s second largest meeting facility, houses more than 2.1 million feet of exhibit and meeting space and more than 3.6 million people are estimated to have attended meetings and trade shows in 2001. The region has enjoyed relatively healthy economic and employment growth. While this is fuelled in large part by the tourism sector, the region is also home to a number of high tech, aerospace and manufacturing businesses, the University of Central Florida and other post-secondary institutions. Regional employment stood at 857,000 in 2002 and is projected to grow to 928,000 by 2005. Disney is the region s largest private-sector employer (53,000) followed by Florida Hospital (12,808) and Universal Orlando and Orlando Healthcare (12,000 each). The largest public sector employer is the Orange County Public School system (25,000), followed by the State of Florida. The development of the High Speed Rail system in the market will help fuel economic growth. The economic benefits of High Speed Rail to Florida have been documented in several recent studies. For the period corresponding to the capital program for the Beeline Alternative the following economic benefits are generated for Florida businesses and residents. $2.5 billion in business sales $813 million in employment earnings 6,790 jobs during the five-year construction phase For the 30 year analysis period for continuing operations the benefits are: $4.8 billion in business sales $1.7 billion in employment earnings 1,230 permanent jobs over 30 years operations and maintenance For the period corresponding to construction activities near station sites, the economic impacts for the state of Florida are estimated as: $1.2 billion in business sales $375 million in employment earnings 2,780 jobs over a five-year period of phased development The estimated impacts for the capital program, operations and maintenance, and construction activities in proximity to stations are additive. Thus the total impact results in $2.9 billion in employment earnings in year-of-expenditure 8

Estimated economic impacts - $2.9 billion in employment, $8.5 billion in sales by Florida firms (current) dollars. Sales among Florida firms total $8.5 billion in year of-expenditure (current) dollars. These impacts result from the direct expenditures to implement and operate the proposed service and other impacts that occur as high quality rail service draws economic activity to the corridor and higher valued land use results from development and redevelopment activities. 3 Opportunities & Challenges (SWOT Analysis) 3.1 Strengths Speed Frequency Travel Time (direct access) Convenience High levels of customer service and access to amenities Traditional allure of passenger rail services High level of public support 3.2 Weaknesses Fixed link system Perception of cost, particularly relative to automobile use Dependency on other services for trip integration Need for passenger transfers 3.3 Threats Ridership impact of Disney decision to maintain its own transit services between the airport and resorts Limited political support 3.4 Opportunities Development of partnership and alliances with other transportation service providers, resorts and attractions and the travel industry to deliver a seamless, integrated customer travel experience Unique Florida brand Opportunity to showcase emerging technologies and last mile service delivery alternatives 9

4 Service The US Federal Railroad Administration selected Bombardier to develop a non-electric, high-speed locomotive specifically for the American market 4.1 Service Description The Tampa-Orlando High Speed Rail link will feature Bombardier JetTrain technology. JetTrain technology is the product of a joint development partnership with the US Federal Railroad Administration (FRA). The FRA selected Bombardier to work with them in a public/private partnership to develop a nonelectric, high-speed locomotive specifically for the North American marketplace. A key objective was to develop a meaningful alternative to the unsightly and often cost-prohibitive practice of electrification of railroad right-of-ways. The highly successful outcome of this initiative was a jet-engine powered locomotive capable of sustained operating speeds of 150 mph. This uniquely American solution has it all - sustained high speed and rapid acceleration with noise levels at trackside less than or equal to electric powered systems. All passenger cars and services are fully ADA compliant. Bombardier JetTrain technology is designed for America, made in America, and already certified to US safety and ADA standards. Speed: This system will be capable of operating on an unconstrained alignment at speeds in excess of 120 mph, meeting the requirements of Florida s constitutional amendment. The Tampa-Orlando High Speed Rail Service will achieve an operating speed of 125 mph using Bombardier s JetTrain technology. Bombardier JetTrain is the only FRA Tier II compliant high-speed rail technology in the world Safety Standards: The interlocking controller and the ATP system will provide fail-safe measures for the signaling and control equipment. The interlocking controller incorporates dual-channel redundant system architecture to assure reliability of critical safety systems. Infrastructure safety measures include provision of vehicle barriers, as appropriate, along the guideway and roadway, providing safety to motor vehicle traffic. Passenger safety measures at stations will include railing and gating to promote safe movement in the vicinity of the station and on the train platform. The Tampa-Orlando High Speed Rail Service will meet all federal safety standards in design, construction, operation, and maintenance phases. Performance Standard: The major performance features include: Opening service with 14 daily round trips between Tampa and Orlando International Airport and not less than 8 shuttle roundtrips per day, exceeding the required minimum of 12 daily round trips A technology and train configuration (consist) that accommodates 288 exceeding the required minimum passenger capacity of 250 passengers per consist Service hours from 6 a.m. until 11 p.m. A consideration for increased service above minimum levels in order to optimize ridership and revenue 10

High Speed Rail will serve the needs of distinct customer groups Station Locations: Stations are planned for Tampa, Lakeland, Disney, Orlando and the Convention center [subject to final alignment choice]. Table below identifies the station locations for each alternative alignment and also shows the trip times as determined by Train Performance Calculator (TPC) analysis. For a trip from Tampa to Orlando, with a one minute station stop at intermediate stations, Train Performance Calculator analysis determines a trip time of 58 minutes from Tampa to Orlando International Airport via the Greeneway corridor (Designated Alignment C) and 63 minutes via the Beeline corridor (Designated Alignment D). The Tampa-Orlando High Speed Rail Service proposed technology and Operating Plan will deliver a system travel time that is less than the Authority s requirement for a 1-hour 10-minute maximum travel time between Tampa and Orlando International Airport, including stops. Train Performance Calculator Analysis of Trip Times Station to Station Tampa to Lakeland Lakeland to Disney area Disney area to Orlando International Airport (Designated Alignment C) Disney area to Convention Center (Designated Alignment D) Convention Center to Orlando International Airport (Designated Alignment D) Total TPC Trip Time (Alignment C) Total TPC Trip Time (Alignment D) Trip Time (min) 20.0 22.6 13.8 6.9 10.5 58.4 63.0 5 Segments and target markets High Speed Rail will serve the needs of several distinct customer groups including intercity travelers, commuters, tourists, business travelers, groups and air travelers, amongst others. 5.1 Intercity The Authority's ridership study revealed that the intercity travel market, which comprises of trips made within the proposed corridor between the Tampa, Orlando and Lakeland centers would represent over 60 percent of anticipated ridership, with the connection between Tampa and Orlando accounting for about 30 percent. This market comprises a mix of local residents and visitors, traveling for a variety of purposes including work commuting, business travel and vacation/recreation and personal business. 5.2 Airport Access The other significant market opportunity for High Speed Rail lies in trips made to/from the Orlando International Airport by air passengers traveling to destinations outside of the rail corridor. A large proportion of these trips are expected to be generated by the Disney properties and the other attractions in the International Drive area. A significant demographic feature of this segment is the number of children and families. 11

Key determinants of the High Speed Rail fare structure are revenue optimization and the distinct characteristics of the market segments While the frequency of rail service delivered to these individual markets will not be differentiated, given their unique travel, information and other needs and varying degrees of price sensitivity, elements of the High Speed Rail marketing mix such as fares, fare distribution channels, information, connecting transportation services etc. will have to be tailored for each of the segments. 5.2.1 Choice The Airport access market can be further divided into Choice and Captive customers. Choice customers are those travelers who are currently making their own choice of mode of travel to and from the airport. This segment is estimated at approximately 5 million travelers with an average of plus or minus 2 million customers expected to use either the Beeline or Greeneway alignments. 5.2.2 Captive The actual values of these markets are dependent on negotiations with entities and providers currently providing this service. If agreement can be reached with International Drive entities allowing the HSR operator access to all their captive markets, ridership on the Beeline alternative will increase to between 2.5 and 2.8 million riders generating total annual revenues of $39 to $42 million. If agreement can be reached with Disney allowing the High Speed Rail operator to access all their captive markets, the total potential ridership on the Greeneway alternative would increase to between 3.8 and 4.1 million riders generating total annual revenues of $54 to $56 million. 6 Pricing 6.1 Pricing The proposed full fare of $46.40 for service between downtown Tampa and the Orlando International Airport was developed based on elasticity analysis and market pricing theory. The speed and amenity offering of the High Speed Rail Service easily supports this fare level for the Choice market. Comparable air travel between Tampa Bay and Orlando, depending on airline restrictions and policies, ranges from $145 to $270, inclusive of all taxes and fees. For travel by automobile, the Florida High Speed Rail Authority's ridership study estimated a cost of $0.36 per mile for business travelers. This makes the comparable cost of traveling the 84 miles between Tampa and the Orlando International Airport by automobile roughly at $30. 6.2 Fare structure Key determinants of the High Speed Rail fare structure are revenue optimization and the distinct characteristics of the market segments. Fare Sensitivity Analysis shows that Choice customer fare revenues are optimized at rates of 60 percent higher than the base level fares used in the Authority s Investment Grade Ridership Study. 12

A technology plan will be prepared for the system that will optimize integration The commuter fares provide a significant discount over the full fare. The commuter fare represents the average per-trip cost of a weekly or monthly pass and compares favorably with the Florida Department of Transportation estimate of $17.50 for travel by conventional rail, based on Amtrak's fare calculation formula of a $9 fixed rate plus $0.108 per mile between the two markets. The commuter fare will be available only to authorized local residents. For the Captive market, Orlando International Airport to Disney, a net $12 fare is anticipated. High Speed Rail Fare Matrix Choice Customers Station Pairs Full Fare Commuter Fare Tampa-Lakeland $24.00 $ 8.40 Tampa Disney Area $40.00 $14.00 Tampa I Drive $43.20 $15.20 Tampa - OIA $46.40 $16.40 Lakeland Disney Area $28.80 $10.00 Lakeland I Drive $32.00 $11.20 Lakeland - OIA $35.20 $12.40 Disney Area I Drive $16.00 $ 5.60 Disney Area - OIA $19.20 $ 6.80 I Drive OIA $19.20 $ 6.80 6.3 Fare distribution The nature of the Tampa-Orlando market mandates the need for a multi-channel distribution system for ticket sales including pre-sales, packaging, on-line services, in-property sales and station ticket vending machines. The establishment of a robust on-line reservation and purchase system will allow access to ticket sales for both individuals and agents. A technology plan will be prepared for the system that will optimize integration with existing legacy systems of attractions and operators in the region and provide maximum flexibility. The choice of fare technology will also permit the authorization of local vs. guest travelers and permit differential tariff structures. Consideration may be given to designing a system of reciprocal ticketing privileges with one or more transportation operators including airlines, major attractions, the local transit authority, Amtrak and private operators. 7 Marketing Objectives 1. To support the achievement of ridership and revenue targets 2. To establish a strong brand for the Tampa-Orlando High Speed Rail Service 3. To deliver a customer centric service design and operating environment that will achieve consistent customer satisfaction ratings in the high 90 s 4. To differentiate between the customer segments to be served in this market 5. To optimize the number and diversity of partnership arrangements with regional attractions, transportation providers and business enterprises 6. To identify and exploit non-fare revenue opportunities 13

8 Key Strategies Champ Car driver Mika Salo welcomes the Bombardier JetTrain Florida 2003 Tour 8.1 Branding & Positioning Bombardier JetTrain clearly demonstrated the value of branding at the highly successful launch of the new technology in Washington DC in October 2002. Further evidence of the power and momentum that can be created around a strong brand was seen during the Florida JetTrain 2003 Tour. Building on an alliance with PK Racing Cart Champion Mika Salo, a series of media events were staged in Miami, Orlando and Tampa, following Mika s podium finish at the Grand Prix Americas in Miami on September 28, 2003. Drawing on market research and best practices a unique brand will be developed for the Florida High Speed Rail Service. The new brand will leverage the appeal of High Speed Rail Service, showcase the Florida offering and salute the vision of the people of Florida in entering this new era of transportation. 8.2 Customer Centric Service Design One of the key strategies to ensuring project success will be a customer-first focus. This will be enabled primarily through the detailed analysis of customer contact points. In order to better understand the distinct needs of different customer segments, it is useful to closely examine the anatomy of a trip by highspeed rail. This is completed from a customer s perspective through the development of a Transaction Chain - an inventory of all the potential contact points between customers and the service. Each of these customer contact points is then examined from four distinct perspectives, summarized as follows: Understand the customers needs at the contact point Design the service and experience to deliver service quality at the contact point Deliver the service and experience effectively and efficiently Discover from the feedback and responses Application of this detailed and thorough methodology ensures that customer needs at each contact point of a customer's travel experience (pre-trip, trip and post-trip) are understood; infrastructure, service, policies & procedures are designed in response to identified needs and appropriately delivered by staff and other applicable delivery mechanisms in a consistent manner; and customer response and feedback monitored to ensure continuous improvement and keep pace with evolving needs and expectations. Perhaps as critically, the focus on the customer facilitated by this process also functions as the basis for coordinating and integrating the efforts of all of the 14

High Speed Rail Service delivers what customers want various disciplines and activities involved in the project. Architects, engineers, accountants, planners, front-line and security staff, among others, develop an understanding of the interdependency and impact of their respective roles in shaping the customer experience at any given contact point, and ultimately their influence on ridership and revenue. A customer trip on the Florida High Speed Rail Service can be broken down into three constituent phases: Pre-Trip Phase - During this phase, the need to travel is generated by a precipitating event or planned activity. Customers may consider and evaluate a range of transportation options, either on their own (websites, call centers, printed materials) or through a third party (travel agent, tour operators, resort or hotel). Ensuring that Florida High Speed Rail Service is included in a customer's consideration set is a critical requirement at this stage. At this stage, typically customer needs are for information on attributes such as service levels, fares, schedules, required transfers and trip times. Assuming that High Speed Rail Service provides a good match with the criteria set by the customer, a reservation/ticket purchase transaction is completed and the next phase of the trip is ready to be initiated. Trip Phase - A trip by High Speed Rail will require the customer use a complimentary mode of transportation to access a rail station and, in most cases, then travel from a station to their ultimate destination. While the customer experience on the High Speed Rail Service itself is important, a poor experience with a connecting mode could negatively influence the customer's perception of their subsequent High Speed Rail trip - underscoring the need to ensure the development of a seamless, integrated network of transportation services. While using the High Speed Rail system, customers' safety and security, information and creature comfort needs will have to be addressed through a combination of elements including, courteous, knowledgeable and trained staff, directional and instructional signage, and station and train amenities. Post-trip Phase - The successful completion of the journey does not automatically signal the end of the customer experience with the service. In some instances, there may be the need to follow up on credit card billings, process refunds, locate and return lost property and manage customer feedback (both positive and negative). 8.3 End to End Service - Baggage Handling A significant number of passengers will travel with luggage, which will affect the customer experience and could have an impact on station dwell times and schedule adherence. A Baggage Handling Plan will be developed to ensure that baggage handling procedures support customer satisfaction and minimize the time required for loading and removing luggage. The latest in automated and technology-enabled handling systems will be investigated in the development of this Plan. 15

8.4 Employee Support and Training A customer centric service design and operating environment Employees are the foundation of service success. Great employees can work around equipment deficiencies, inevitable system shortcomings and a diverse customer base great employees make great companies. Front-line employees will play a key role in assisting, directing and providing information to customers, while ensuring consistent and reliable service delivery. However, in order to effectively do so they must be equipped with the appropriate tools, policies and processes and given support for their efforts to satisfy the needs of customers and deliver customer service. In a market where Disney sets the bar for customer expectations, the importance of well-trained, knowledgeable and efficient staff cannot be overstated. 8.5 Advertising & Promotion Working from the foundation of a compelling and memorable brand High Speed Rail will be marketed using a variety of online, print and partner marketing programs. 8.6 Customer Information 8.6.1 Signage Directional and information signage, that delivers a mix of static and dynamic real-time data, will compliment the efforts of front-line staff and help customers effectively and efficiently access and use the system. 8.6.2 Real time information In an increasingly wired, and wireless, society there is growing expectation that service providers will have the capability to assemble and disseminate real-time schedule information. The proliferation of cell phones, PDAs, laptops and other mobile communication devices provide an opportunity for the High Speed Rail Service to deliver real time service information (delays, cancellations etc.) and for customers to elect to receive information through a preferred, or multiple devices. 8.7 Enhanced Amenity Package There are a wide range of amenities that could be considered both on-board the trains and at stations that will enhance the customer experience. For business travelers, wireless internet capability, business service centers and stress-relieving massage and spa services would take service beyond the boundaries of standard rail service offerings. Vacationing families could choose from a variety of onboard entertainment options (games, movies, designated play areas and close encounters with resort characters) to keep their young charges occupied for the duration of their trip. On-line grocery services would allow arriving visitors to complete their shopping and be met at their holiday accommodation property 16

with the groceries. The nature and extent of offerings should be determined through research, consultation and customer feedback. Assessing customer needs and identifying the key drivers of customers' satisfaction 8.8 Research & Monitoring Achieving ongoing customer satisfaction and loyalty requires a range of activities including an in-depth understanding of customers, an alignment of business processes around the customer, and the creation of innovative tools and systems to support employees in the provision of high quality service delivery. Research provides an objective foundation for assessing customer needs and identifying the key drivers of customers' satisfaction. It facilitates the establishment of performance benchmarks and standards, which then provides a basis for continuously monitoring and charting progress and assessing the effectiveness of initiatives and activities undertaken. Customers will be the primary source for gathering information on key attributes such as service reliability, personal safety, employee presentation and helpfulness, condition of equipment and facilities, and quality and availability of customer information. Operating statistics including on time performance, car availability, fare compliance etc. will be standardized and aggregated into regular reports. Once performance standards are established, all personnel will have the responsibility of operating to standard, and in the case of non-conformance developing action plans to remedy the deficiencies. 8.9 Community Consultation High Speed Rail will represent a significant asset to the communities it serves. As such, it should reflect the character, values and aspirations of its host communities. There is significant value in encouraging public participation through consultative processes in several components of the project, including branding and identity. This will facilitate community engagement and foster a sense of ownership of the system, which will impact pre-disposition to use, trial and sustained use by residents. Similar consultative processes should be undertaken with respect to the design and construction of stations and other project infrastructure. The impact of new facilities on the face of a community and in particular the negative impacts associated with construction (noise, traffic etc.) are often a significant source of concern and conflict for local residents. A complete community consultation plan will be completed to identify and address community and stakeholder concerns and generate mutually agreeable solutions. 17

9 Tactics & Execution Electric powered 'Station Cars' encourage environmentally friendly station access solutions There are four critical success factors in meeting the Florida High Speed Rail Authority s ridership and revenue projections. 9.1 Intermodal Coordination 9.1.1 Traditional Services A trip on Florida High Speed Rail will typically represent just one segment of a customer journey, which will be initiated and possibly completed on another mode of transportation. In order to ensure that the High Speed Rail Service provides a seamless customer experience, a range of intermodal services that customers can transfer to/from at the stations will be established. Taxi or shuttle service, public transit, rental or privately owned vehicle and bicycles represent some of the travel options that will considered for integration at the stations. 9.1.2 Innovative Services There is also the opportunity to consider the development of new products and services such as Station Cars. For example, a family that arrives at the Orlando Airport for vacation would typically rent a conventional car for their sole use. A station car program would locate vehicles at stations" (station car facilities) at all major attractions, the airport, Florida High Speed Rail stations, and the major hotels. The family would rent a station car (four/five seat cars and minivans) only when they need travel to a destination not immediately accessible from a Florida High Speed Rail station. When they are not using a vehicle, other families could be using it, thereby reducing the cost of use for an individual family, while helping to reduce the number of vehicles on the road. The same shared-use principle could just as easily be applied to residents traveling for business or other purposes along the Tampa to Orlando corridor. 9.1.3 Schedule and Fare Integration In addition to ensuring that customers have a range of intermodal connections to choose from, it is equally as important that their travel experience is integrated and seamless. Air/rail code sharing is emerging as a new practice in the United States and Europe. Code sharing is a commercial agreement between two operators that allows one to put its two-letter identification code on the flights or trips of the other as they appear in computerized reservations systems and in the Official Airline Guide. Customers will be able to fly on an airplane from their home town to a city served by High Speed Rail and then continue on the train to their final destination using the air carrier s ticket designator. This will allow customers to have the benefits of a single ticket to destinations not previously available on their airlines network. Companies that share codes typically coordinate schedules to minimize connection times as well as provide additional customer services, such as one-stop check-in and baggage checked through to the final destination. Potential code share partners will be identified as one of the means of addressing this success factor. 18

9.1.4 Baggage Handling The future is easy. Direct-to-hotel concierge services, direct-to-airline baggage check in systems and web-enabled vacation package booking Given that many customers will be traveling with luggage, baggage handling procedures and protocols will be established to reduce the level of passenger effort in transferring luggage to/from the train. Options under consideration include direct-to-hotel concierge services and direct-to-airline baggage checkin systems such as those in current use by Disney properties, Cruise Ship Operators and the Hong Kong rapid transit system to the airport. This has been an area of significant development in the past ten years with a range of tested and supported technology solutions now available that deliver authentication, security and tracking of pieces. 9.2 Partnerships In addition to the need for partnerships with other transportation service providers as described above, there is significant opportunity to develop relationships with organizations in the travel and hospitality industry that will generate awareness, induce trial and facilitate sustained use of the High Speed Rail Service. Joint sales and marketing programs, including reciprocal ticket sales, website links and special packages that include High Speed Rail tickets and/or passes will be pursued with local area resorts, hotels and attractions. Similar relationships will be fostered with convention planners and the new convention centre. Discounts for the bulk purchase of tickets and passes for visiting convention delegates, or preferably the development of an integrated convention participants ID that also functions as a pass to use the service could serve this niche market. Many of the visitors to area resorts and attractions use the services of tour operators, travel agencies and increasingly internet brokers, such as Expedia.com, to plan and purchase their vacation packages. Most of these packages consist of air travel and hotel accommodations, but may also include "ground transfers". Where possible and applicable, negotiations will be pursued to include High Speed Rail transfers in these packages. 9.3 Service Reliability Passenger Guarantee The largest potential market segment and target for High Speed Rail Service comprises local residents traveling the Orlando/Tampa Bay corridor for commute, business and other purposes. Whether the need is to catch a connecting flight, attend a scheduled business meeting or start a day's work, time sensitivity will characterize many customer trips. Service and travel reliability will be key to successfully addressing these customers' needs. There are several factors that will contribute to and have an impact on service reliability and consistency. 19

9.3.1 Safety & Security Policies and Procedures Great companies turn mistakes into opportunities to 'wow' the customer In the post 9-11 environment, there is a heightened awareness of the need for safety and security protocols, particularly in the transportation sector. A direct impact has been an increase in check-in and security requirements at all airports. This has resulted in increased travel time for air customers. A plan to ensure passenger security on Florida High Speed Rail with the least impact on boarding times will be developed. 9.3.2 Service Recovery No matter how good, or how well planned a service is, mistakes will happen. The great companies are those that know what to do when service failures occur and how to turn them into opportunities to increase customer satisfaction and loyalty. A detailed Service Recovery Plan that includes provisions for alternative travel arrangements and customer compensation, and that is well understood by staff and can be deployed with minimal delay will be developed for the Florida High Speed Rail Service. The three fundamental elements of the plan are: Develop listening posts to find out customers problems with the service. Train, empower and give employees tools to accept and respond to complaints. Implement systems that lead to speedy recovery and prevent problems from reoccurring in the future. Service failures provide a unique opportunity to demonstrate a commitment to customer service. As evidence, it has been shown that of customers that experience a service related problem, if it is solved promptly, 95 percent will come back. 9.4 Customer Driven Service Design A key strategy in ensuring project success will be a customer first focus. This will be enabled using a detailed analysis of customer contact points and in the structure and focus of the system facilities, operating company and operations philosophy. Customer research will be a key input to service design and to service delivery. 20