Alex Nelson’s eureka moment came to him when he was on the Durham to Newcastle train, stopping at the then defunct Chester-le-Street station.
He recalls that moment in November 1998. ‘The station was all boarded up and derelict and unloved and had this ‘To Let’ sign up.’ He and his partner Steve Robson were running a group travel business, with London being the biggest destination, but many customers wanted to travel by train. He could not meet this demand, as the rail companies would not sell him tickets at less than retail rates.
So they approached train company, Northern Spirit, which was then responsible for the station, with a proposal that they would lease and run Chester-le-Street as an independent station, allowing them to earn commission on the sale of tickets. Northern Spirit agreed, as passengers could still board at Chester-le-Street but their conductors struggled to make all the necessary on-board ticket sales during the nine-minute journey to Newcastle. It also provided the company with a good news story on the reopening of a station. As a result, the company Chester-le-Track was formed to run the station and make a profit from selling tickets to about 250 daily commuters.
An inspired move
Chester-le-Track, in those early internet years of the late 1990s, also registered the domain name nationalrail.com. This was a coup that displeased some people. As Nelson says with a chuckle, one senior train operating company executive described him as a pirate for having snapped up the domain name.
It was an inspired move and became the basis for a thriving internet booking business. These two income streams are interdependent. ‘If we didn’t have the internet side then we wouldn’t earn so much money basically. Also, a lot of the business that we get through the phone comes through people being on the internet site and ringing up for advice,’ says Nelson, who is a director of Chester-le-Track and also has given himself the rather old-fashioned title of station master.
‘The fact we are a real bricks and mortar station that actually exists gives legitimacy to the website. People are much happier booking with us on the website than if we were run out of a council house in Barnsley.’
A better deal
The business now makes more ticket sales over the internet, which has about 15,000 visitors a day, but, under an industry-wide agreement, makes less commission on those sales. Nelson believes Chester-le-Track’s detailed knowledge of fare structures and pricing and the manageable scale of its operation, means it can often get customers a better deal.
‘Other internet sites will guide you towards travelling on specific trains at specific times but on many trains for a day return you don’t need to specify a particular train. If you buy a cheap day return from here to York, for example, you can come back on any train.
Sometimes we break journeys into bits, so for a journey to Birmingham we might sell you a ticket to Derby and then another from Derby to Birmingham where that comes out cheaper. Or we might actually book you to further than you want to go, so again if you want to go to Birmingham we might sell you a ticket to Banbury because that’s cheaper.’
The company struggled at first in the wake of the Hatfield accident and flooding, but Nelson and his team gradually built it up to a point where it had an annual turnover of £1.5m and five employees. In fact, Chester-le-Track became so successful that it took over a second abandoned station at Eaglescliffe, a busier station, at the junction between the Darlington to Middlesbrough service and the Sunderland to York service.
Nelson describes the station as being in the same state as Chester-le-Street 12 years ago – derelict and unloved. It was the only stop on Grand Central’s East Coast route which was unstaffed. Grand Central was keen that it should be manned and a long three-way conversation between the operator, Nelson and Stockton Borough Council was soon underway.
It opened only a few weeks ago, after three long and frustrating years of preparation. The renovation costs of £170,000 were met by Stockton Borough Council, with Chester-le-Track assuming the commercial risk of leasing and running the station.
‘I took a lot of persuading to do Eaglescliffe, I really did. I knew it might be a good thing to do and it certainly helped matters along when Stockton Borough Council said they would fund the conversion of the building, which made the decision easier. Fundamentally when I was deciding whether I wanted to expand, I had to consider that if I didn’t say yes to Eaglescliffe then it would probably still happen and Stockton and Grand Central would probably have found somebody else to do it. They might not have done it as well as my team have done it, but the problem was, I’d be inviting competition and another independent station operator into my home patch.’
A tripartite lease
Eaglescliffe serves 69 trains a day, compared to 22 at Chester-le-Street. At both stations the buildings are owned by Network Rail and there is a tripartite lease between Northern Rail as station facilities operator, Network Rail as the infrastructure owner and Chester-le-Track.
Nelson reckons there are probably about 15 independently run stations in the country, mainly in the Welsh Borders and Lancashire. Eaglescliffe is doing well and Nelson estimates that turnover for the year to March 2013 will be £2.5m. Chester-le-Street has become such a successful operation it attracts even over-the-counter customers from Durham and Tyneside.
He is passionate about the simple ingredients that go into making a good station and rattles off the customer research. ‘The first thing people want is other people. Not only from an information point of view but from a perceived security point of view. They, particularly women travelling on their own, want to see somebody on the station. Second is toilets and three is waiting rooms.’
Nelson prides himself that Chester-le-Track not only provides such time-honoured facilities but is also innovative. It was, for example, one of the first businesses outside London to sell Oyster cards and it has already sold several at Eaglescliffe, from where there are four direct trains a day into King’s Cross.
‘I know a lot about the railways and I enjoy working on the railway and I’m sometimes known as the maverick of the East Coast Mainline,’ says Nelson.