May 29 (Bloomberg) -- The London-Scotland sleeper train known as the Deerstalker Express because of its popularity among Britain’s gentry will get a hotel-style makeover in a bid to boost bookings from foreign tourists and business travelers.
The Caledonian Sleeper will be revamped by Scottish luxury hotel chain Inverlochy Castle Management International with a menu from Michelin-starred chef Albert Roux as Serco Group Plc takes over the service next year in a 15-year franchise deal.
Unprofitable for decades, the operation is being spun off from the larger Scotrail business in an effort to establish it as a viable enterprise. Serco’s winning bid will see a fleet of 72 railcars introduced at a cost of 100 million pounds ($167 million), providing compartments with showers, a brasserie-style club car and airline-style pod beds in cheaper seated carriages.
“The sleeper is already a wonderful service which with a bit of loving care, investment and innovation can gain market share from the car, airlines and daytime rail,” Serco Chief Executive Officer Rupert Soames, who joined three weeks ago, said in an interview. Soames has been a regular user of the train in his previous post as CEO of Glasgow-based Aggreko Plc and as a means of reaching a property near Fort William, one of three Highland termini the sleeper serves from London Euston.
The existing service counts Scottish lairds and members of parliament as customers, a clientele which helped stave off moves to close it under previous owners. Scottish Nationalists who run the country’s government had planned to shut the route before opting to split it from Scotrail, whose operator FirstGroup Plc also bid, as did Deutsche Bahn’s Arriva unit.
The overnight service provides two trains a day in each direction, the 11-hour Highland Sleeper, which splits into three to serve Fort William, Inverness and Aberdeen, and the eight-hour Lowland Sleeper to Edinburgh and Glasgow.
Interior design of the new trains will be led by Fort William-based ICMI, which runs hotels including the Inverlochy Castle near Ben Nevis, Britain’s highest mountain, where suites cost as much as 695 pounds per night over the summer months. The contemporary railcars will feature traditional Scottish fabrics and textiles, according to Serco.
The new rolling stock, part-financed with 60 million pounds of funding from the Scottish government, will be built by Spain’s Construcciones y Auxiliar de Ferrocarriles SA and serviced by Alstom SA. Channel Tunnel operator Groupe Eurotunnel SA’s GB Railfreight unit will provide locomotives and drivers.
Hook, England-based Serco, which will run the sleeper from next July with existing stock before new trains arrive in 2018, anticipates revenue of 800 million pounds over the span of the franchise, including 180 million pounds in state subsidies.
A Scottish vote for independence in a Sept. 18 referendum wouldn’t have any impact on the Caledonian Sleeper, Serco said. The Scottish Government said in November that cross-border trains would operate as now, and ruled out any moves to take services into public ownership until after franchises expire.
While Serco businesses include London’s Docklands Light Railway, Northern Rail and the Merseyrail commuter franchise, Soames -- who took over after Britain’s biggest government outsourcing provider was barred from some contracts after overcharging for electronic tagging -- said its experience from the NorthLink ferry service is more relevant to the sleeper.
Journey times from Aberdeen to Orkney and Shetland are similar and the ships are equipped with pod bed-seats from first-class airline cabins that will feature on the train. Early boarding offered for the shorter Orkney trip, which departs later in order to arrive at a more social hour, will also be made available to rail passengers on the Lowland route.
Serco’s Great Southern Rail unit also runs Australia’s Indian Pacific, Overland and Ghan long-distance luxury trains.
About 60 percent of the 270,000 annual Caledonian Sleeper passengers travel on business. Serco, awarded the contract by Transport Scotland, aims to boost both corporate and leisure bookings with an improved reservation system, uniformed hosts who will welcome guests, a “virtual concierge” application and better Wi-Fi and power-charging access, Soames said.
“It’s just so much more attractive than getting up at 4 a.m. to join the check-in queue at Luton airport,” he said.
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