Rail Tourism Strategies For Uzbekistan Railways

RAIL TOURISM
STRATEGIES
FOR
UZBEKISTAN
RAILWAYS
FINAL
REPORT
Prepared by:
HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

2111 Wilson Boulevard, Suite 700
Arlington, Virginia 22201
United States of America
In association with
15 Artillery Lane
London E1 7HA England
For:
Asian Development Bank
6 ADB Avenue, Mandaluyong City, 0401 MM
0980 Manila, Philippines
and
Uzbekistan Temir Yullari
7 Taras Shevchenko Street
Tashkent 700060
Uzbekistan
25 November 2002
TABLE OF CONTENTS
SUMMARY AND CONCLUSIONS......................................................................................... 1
CHAPTER 1
TOURISM IN UZBEKISTAN......................................................................3
CHAPTER 2
EXISTING RAIL SERVICES .......................................................................6
SCHEDULED PASSENGER SERVICES ........................................................................................6
CHARTER TRAINS AND COACHES ...........................................................................................10
CHAPTER 3
POTENTIAL FOR RAIL TOURISM ........................................................ 12
SCOPE AND TARGET MARKET..................................................................................................12
CURRENT TOURIST TRAFFIC......................................................................................................13
TRAVEL INDUSTRY IMPRESSIONS............................................................................................13
TOURIST SURVEY FINDINGS......................................................................................................14
INITIAL ASSESSMENT OF OPPORTUNITIES ........................................................................15
INCREMENTAL IMPROVEMENTS TO UZD SERVICES.....................................................16
NEW SILK TOURIST CLASS.......................................................................................................16
CHARTER SERVICE PRICING ......................................................................................................19
ASIA/CIS RAIL PASS .........................................................................................................................19
CHAPTER 4
IMPLEMENTATION ................................................................................20
APPENDIX 1
TRAIN TIMES ............................................................................................22
APPENDIX 2
INDUSTRY CONTACTS............................................................................24
APPENDIX 3
INVITATION FOR JV PARTNERS...........................................................25
APPENDIX 4
DETAILED SURVEY REPORT.................................................................27
APPENDIX 5
INTERNATIONAL RAIL TOURISM MODELS...................................... 41
NOTE
This Final Report was written by Michael Schabas and Ravshan Sabirov. It reflects comments
received from ADB on the Draft Report. It incorporates findings of the Tourist Passenger Survey,
and some additional information obtained from UTY.
CREDITS
Special thanks to:
Expert Sociological Centre, which carried out the Tourist Survey;
John Armistead, who gave permission for use of photographs from his trip across Uzbekistan by
rail.
/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC
Page i
SUMMARY AND CONCLUSIONS
ourism is one of the largest industries in the world, with tourist spending estimated at more
than $500 billion by Europeans, Americans and Japanese in 2001. Uzbekistan has some
world-class attractions, but almost all tourist travel within the country is by road even though
the key cities of Samarkand, Bukhara and Khiva are all served by rail. There is the potential to attract
many more tourists on to Uzbekistan Railways. This will support development of the tourist industry
in Uzbekistan, and can also generate profits for Uzbekistan Railways (UTY).
Uzbekistan currently attracts about 50,000 international tourists per year, well below historic peaks,
and there is infrastructure in place to support a doubling or even tripling of tourist volumes.
However UZD only carries about 5,000 foreign tourist trips per year on its regular services. This
suggests that less than 10%, and probably less than 5% of tourists use rail.
Rail Tourism takes many different forms in different countries, depending upon the nature of
tourism, the location of tourist sites, availability of rail lines, and other factors. While current UZD1
trains are generally clean and reliable, the standard of accommodation is not acceptable to most
international tourists. Also, UZD does not actively market its services or sell tickets through the
travel industry, and it is therefore difficult for tourists to use services. These problems are typical of a
railway system that is focused primarily on carrying domestic passengers.
Figure 1 Uzbekistan Railways

K A Z A K H S T A N
Nukus
Shimkent
U Z B E K I S T A N
TASHKENT
K Y R G Y Z S T A N
Urganch
Khiva
Bukhara
Samarkand
Andijon
Shahrisabz/Kitov
Turkmanobat
T A J I K I S T A N
Qarshi
T U R K M E N I S T A N
Uzbek Railways
Other Railways
Dushanbe
Termiz
A F G H A N I S T A N
This report examines

successful rail tourism
models from around the
world, and evaluates the
strengths, weaknesses and
opportunities. It then
identifies specific strategies
for developing rail tourism
on Uzbekistan Railways,
and considers
implementation options.
In the short term, UZD
should publish an EnglishRussian timetable, with
basic information about
services, classes of travel,
and how to book tickets.
Cost to produce this, to
distribute to hotels and
travel agents, and to put it
on a Website, can be offset
if it attracts only one additional passenger per day.

The major opportunity is to attract tourists to use rail for journeys between the major cities of
Tashkent, Samarkand, Bukhara and Khiva/Urgench. While it may, eventually, be possible to operate
entire trains for tourists, it will probably be more profitable to carry tourists on existing trains. This
will avoid the need for additional locomotives, which are a substantial part of passenger rail
operating costs. A new, higher class of service can to be offered, with changes to on-board
UZD (Uzbekistan Zeleznica Dorog) is the newly-formed Joint Stock company which operates existing
passenger rail services in Uzbekistan. It is a wholly owned subsidiary of Uzbekistan Temur Yollari (UTY), the
holding company for Uzbekistan Railways.
1
Page 1
accommodation, services, and arrangements for selling through the travel industry. Survey research
indicates that about one-third of tourists would be interested in using rail for travel between cities in
Uzbekistan, and that they would be prepared to pay $50 to $100 each for an overnight luxury train
journey between Tashkent and Bukhara.
Revenues from the new international service, with the working title Silk Tourist Class, might be
$1,500,000 or more within a few years. Some investment will be required, but the payback period
may only be two or three years. The new service will also require new skills and new ways of
working. It is recommended that UTY select a private sector partner and form a joint venture to
exploit this market. This joint venture can be established ahead of or alongside the privatisation of
UZD, which will continue to serve primarily domestic and CIS travellers.
The successful establishment of a joint venture to exploit the tourist market should also increase
private sector interest for investing in other UTY businesses. In 1998, Eesti Raudtee (Estonian
Railways) formed EVR Expres to operate sleeper services to Moscow and St Petersburg. A majority
share was sold to private investors, which operate the service profitably. In 1999, GB Railways was
selected to acquire Edelaraudtee, the domestic passenger and freight railway. In 2001, both
Edelarudtee and the international freight railway and infrastructure company Eesti Raudtee were
successfully privatised with total values of $130 million2. Sale of EVR Expres began the process of
establishing railway law in Estonia, establishing confidence with investors, which is essential to any
successful privatisation.
A smaller opportunity is operation of charter trains, mostly running entirely within Uzbekistan, but
sometimes operating as part of a longer journey such as Moscow Beijing. Currently, UZD quotes
charges for charter services based on a simple cost build-up. It received $40,000 from domestic and
international tourist charter business in 2001, for approximately 60 services. Given the need to cover
costs for dedicated locomotives, and substantial empty stock movements, it is unlikely that UZD
earns significant margins from the charter business and may even be pricing some services below its
costs. Before accepting new charter business, UTY must ensure that charges do indeed cover all
costs, including empty stock and staff movements, opportunity cost of assets, and any risks such as
penalties for non-performance. It may be possible to increase margins, both by quoting prices based
on what the market will bear and by encouraging bookings to make use of empty stock and staff
movements. It may also be necessary to give up some business where customers will not pay enough
to give a reasonable return.
UTY should also consider the possibility to offer a CIS/Central Asia Rail Pass, jointly with other rail
operators in the region. This could generate additional tourist traffic on Uzbekistan Railways with
potentially high revenues per passenger.
The Baltic Rail consortium, which included Rail World Inc and Railroad Development Corporation
(www.RRDC.com) of the USA, and Jarvis Rail of the UK, paid $65m for a 66% share. They also assumed $30
million debt and committed to invest a further $200m in capital improvements and equipment. GB Railways
Estonia paid EEK 100 million, or about $10m for Edelaraudtee, which operates loss-making domestic
passenger and freight services.
2
Page 2
CHAPTER 1
TOURISM IN UZBEKISTAN
Uzbekistan is a significant international tourist destination. Uzbektourism, the state tourism agency,
estimates that approximately 50,000 international tourists visited Uzbekistan in 2001 and a similar
number will visit in 2002. Tourism peaked in 2000 at about 82,500, but fell sharply after September
2001. There are hopes for a full recover next year. The season is limited to about six months by
climate, with very few tourists in the harsh winter or hot summer months. There are about 1,000
hotel and guest rooms in each of the major cities. This suggests that there is capacity for 100,000
tourists or more, based on two nights in each city, which is consistent with evidence that hotels are
operating well below 100% occupancy even during the peak tourist season.
Figure 2 The Registan in Samarkand
The key sites are the cities of Samarkand, Bukhara and Khiva. Samarkand is one of the oldest
continually inhabited cities on earth. There are key monuments dating from the era of Tamarlane,
including the Registan, and Ulugbeks observatory, where key astronomical and mathematical
discoveries were made. Bukhara and Khiva are both ancient walled cities on the Silk Road, the
main overland trade route between Europe and China until the 16th century.
We commissioned a survey of departing passengers at Tashkent Airport, to better understand the
existing tourist market and the potential for rail tourism. We chose an airport departure survey as
almost all international tourists fly into and out of Tashkent. The survey was administered in the
departure lounge by trained interviewers, with survey forms in English, French, German and
Japanese. We were able to survey 108 passengers in late June, and a further 389 in September and
October 2002. The intention was to survey a random sample of departing passengers.
Of the 497 survey respondents:
53% were male, 42% female, 5% no response; mean age 50.4, range 15 to 85
40% were professional/teacher/office worker, 33% retired, 2% students
56% were on package tours, 30% were traveling with other family members, 30% alone
Page 3
77% were on holiday, 23% on business

21% French, 19% Japanese, 14% German, 7% Australian, 5% Belgian, 5% English, 5% USA,
4% India, 3% Israel, 6% other European, 6% other Asian, 3% CIS.
Mean visit length 15 days, mean total trip length 19 days
72% first visit to Central Asia
95% arrived by air. 3% coach or bus, 1.4% car, 0.2% train
visitors took, on average, 1.4 internal flights during their visit.
The sample roughly matches anecdotal descriptions and general impressions of the existing
Uzbekistan tourism market.
Almost all business and holiday visitors to Uzbekistan pass through or stay in Tashkent. Most arrive
by air and stay about two weeks in the country. A small number of tourists are on longer itineraries,
including rail, road, or air travel to a neighbouring country, but for most this is a trip directly from
their home country. For most visitors, this is a once in a lifetime trip and they do not expect to
return. Most spent about US$1500 on the trip, per person.
Almost all tourists, and a significant share of business visitors, go to the key tourist sites in
Samarkand and Bukhara. Khiva is smaller and more remote, yet it still attracts about three quarters
of holiday visitors and more than one in ten business visitors. It would seem that many business
visitors also take the opportunity to see the key tourist sites.
Most travel between the four main cities by road, with most tourists using private coaches or
minibuses.
Urgench, a medium sized Soviet era city, has few tourist attractions of its own. It is mostly used as
a base for exploring nearby Khiva, which has very few hotel rooms.
Termez is near the southern border with Afghanistan, and currently attracts very few tourists. Some
tourists also visit the fertile Fergana Valley, perched in the Himalayas, while some take trips into the
desert, for example around Uchquduq.
Cities visited3
Business Visitors
Holiday Visitors
Tashkent
93.9%
98.7%
Samarkand
50.4%
91.1%
Bukhara
26.1%
85.6%
Khiva
13.0%
73.3%
Urgench
6.1%
53.7%
Fergana Valley
15.7%
8.4%
Termez
11.3%
1.3%
Uchquduq
1.3%
Most tourists liked Uzbekistan and 88% said they would recommend a visit to a friend.
In other respects, opinion was divided:
3 Source: Departure survey of international tourists. For further information see Uzbekistan Rail Tourism
Survey Final Report.
Page 4
54% thought hotels were good, but 30% thought they were better than they usually stayed in,
while 40% thought they were worse. Only 17% rated them as the same.
Likewise, 30% thought hotels were more expensive but 33% thought they were less expensive,
with only 7% rating them as the same.
31% said they spent more than usual on this holiday, with 37% spending less, and only 10% the
same.
In response to open-ended, unprompted questions:
50% commended the people of Uzbekistan, 30% the historic monuments and architecture, 13%
the history and culture, 10% the nature, and 5% the national dishes
18% complained about toilets and hygienic conditions
15% complained about airport and arrival/departure services
9% complained about national dishes.
9% complained about militia control
We also spoke with several tour operators in Uzbekistan and one in England. Uzbekistan is seen as
an exotic destination for the experienced tourist, who has probably already visited many other
countries. Samarkand, Bukhara and Khiva are seen as world- class historic sites, there are local
handicrafts especially in Bukhara, and there is some nature tourism in the desert and mountains
around Fergana valley. However, in
comparison with say India or
Turkey the country lacks
attractions such as beaches,
interesting food or art galleries. It
is therefore unattractive to families
or young adults, who may wish to
combine a variety of serious
sightseeing with relaxation.
The survey results confirmed our
view that there is substantial
growth potential for tourism to
Uzbekistan, subject mostly to the
general impression of security in
the region. There are now direct
flights from most European and
Asian capital cities. Although hotel
and restaurant facilities are not, in
general, luxurious, they are mostly
to an acceptable international
standard and there is ample spare
capacity.
Figure 3 KhivaCity Walls
Page 5
CHAPTER 2
EXISTING RAIL SERVICES
SCHEDULED PASSENGER SERVICES

UZD operates services over several routes within Uzbekistan, and into Kazakstan and Russia.
Details of train timings are provided in Appendix 1. Key internal routes that could be of interest to
tourists are as follows.
Route
Frequency
Departure Arrival times
Tashkent Samarkand Bukhara
Daily
19h 07h (12 hours)
Tahskent Samarkand Termez
Daily
16h 12h (20 hours)
Tashkent Fergana Valley
3 trips per week
18h 12h (18 hours)
Tashkent Samarkand Urgench (Khiva)
4 trips per week
17h 18h (25 hours)
We travelled on the Tashkent Bukhara service, and visited Urgench, Bukhara, Samarkand, Kitov
and Tashkent stations, and the Tashkent City Ticket Office. While train services have been reduced
since independence, our general impression is that the quality of services is of a higher standard
than generally perceived, and potentially acceptable to some international tourists.
Rolling Stock
Most services are operated with typical Soviet-era passenger coaches. These have steel bodies, with
lighting and air conditioning powered by motor-alternator sets. Typically trains have two or three 2berth coupe cars, two or three 4-berth coupe cars, a restaurant car, and five ore more open berth
cars. UTY has recently acquired 10 new passenger coaches built in the Deutsche Waggonbau plant in
Berlin. Although these cars are new, they are in most respects very similar to older cars. There are no
private toilets, with one communal toilet at each end of each car. Some cars are also equipped with
Figure 4 Restaurant car and two -berth passenger coupe
communal showers.
Page 6
Marubeni Corporation has recently completed the refurbishment of works in Tashkent for the
refurbishment of passenger coaches. This facility is modern and includes machine, carpentry and
paint shops capable of restoring existing passenger cars to like new condition. It also has the
capability to carry out modifications.
Reliability
Although we saw no data on train performance, we understand that trains are very rarely cancelled or
seriously delayed.
Cleanliness
We visited the Tashkent service depot and saw train cleaning underway. We also saw trains in Kitov
and Samarkand stations, which had not been cleaned carefully. It seems that trains are clean when
they depart from Tashkent, however, toilets quickly become dirty and smelly. While staff are
supposed to keep toilets clean, this is difficult even if they are motivated to do so. It is not clear what
facilities are used to wash trains where they terminate at Kitov, Bukhara, Termez, Kunus, and
Kongrad.
Food and Drink

Food and drink quality and service was mediocre. It met the basic requirements of hygiene and
nutrition, and the restaurant car had plenty of seats available. Prices were low. The staff wer friendly
but not particularly attentive. There was no printed menu, and a very limited variety of food and
drink available. Window blinds did not operate properly. Most passengers seemed to take their meals
in their coupes, while most passengers in open sleepers had brought their own food.
We understand UZD is awarding a concession for restaurant services on the Tashkent Ufa train.
This could be a positive move. However there is some risk of non-performance when a private
caterer is involved. Railway passengers need to have a high level of confidence that restaurant
services will be available before boarding the train. Caterers also need to be able to make alternative
arrangements if, for example, the usual restaurant car requires maintenance and is unavailable.
Stations
Samarkand, Bukhara, and Urgench station
have been recently rebuilt, and work at Kitov
station is underway. Stations are imposing
structures and reasonably clean. However
toilets are usually dirty and smelly.
Stations are not always well signposted, and
we had trouble finding Kitov station.
Marketing and Distribution

It is difficult to get information about UZD
services and difficult to make reservations or
to purchase tickets. Like most railways, UZD
expects customers to do the work of finding
out about the railway, and coming to the
station or a special booking office to
Figure 5 Train in station. Photo: John Armistead
purchase tickets. Tickets can only be
purchased at train stations within Uzbekistan
or other CIS countries. This compares with other commercial businesses, which advertise their
products and try to make it easy for customers to make a purchase. UZD tickets cannot be
purchased over the telephone, on the internet, or by post.
Page 7
UZD shares a computerised reservation system with other CIS railways. While this allows booking
between any stations in the CIS, it has several limitations. Reservations can only be made 20 days in
advance, with return bookings 40 days in advance. This does not meet the requirements of tour
operators, who normally organise tours 6 to 12 months in advance.
Ticket offices are closed for one hour at lunch. Foreign tourists must pay at special foreign currency
booking windows, which require special staff.
UZD offers very little information, even in Russian, and none in English. No information was
available at hotels. Printed timetable were not generally available At Samarkand station, potential
passengers are actually charged 25 cym for information.
Thomas Cook, one of the oldest travel companies in the world, publish an international rail
timetable, with an updated edition every two months. This is widely available in Britain and used by
tour operators worldwide, with apparently several thousand copies printed. However, information on
UZD services does not appear to be up to date and is not presented in the most useful way. There is
ambiguity about whether trains are show Moscow Time or Local Time. Also, the key Tashkent
Bukhara train is split between two timetables, Tashkent Smarkand and Samarkand Bukhara.
It would seem that a few independent travellers, on average two or three per day, disregard advice
not to travel by train, manage to find their way to the train station at a time when the foreign
currency booking office is open, overcome the language barriers, book tickets, and travel by train
within Uzbekistan or into other CIS countries. However there are probably many more who never
go to the train station, or get there when it is closed, or find that the train they want to use is not
running or is full.
Figure 6 Samarkand Station
As noted above, most tourists come to Uzbekistan in package tours. These companies reserve space
at hotels, on airplanes, and on buses, for say 15 or 20 passengers, and then try to sell the spaces to
individual travellers. While they can confirm space for an individual traveller on flights and at hotels
by phone, email or fax, for rail passengers they must go and purchase tickets at the station like any
Page 8
other customer. This can cause problems where a tour operator has reserved space for say 15
passengers on airplanes, at hotels, and on buses, but can only confirm passengers as they purchase
individual train tickets.
Timings
Train timetables have apparently been designed to maximise utilisation of rolling stock and staff, and
also to suit the needs of local travellers. For example, the Tashkent - Bukhara train departs from each
city at 7PM and arrives at 7AM, allowing a full day of work in each city. The Tashkent Termez,
Tashkent Andijon, Tashkent Khitov, and Tashkent Urgench routes are longer, and so trains
leave earlier to allow a return trip from and back to Tashkent within 48 or 72 hours, with a short
layover.
The current timings are, however, not ideal for tourists. Only the Tashkent-Bukhara and TashkentTermez routes operate daily.
Figure 7 UZD Train near G'allaoroi. Photo: John Armistead
Page 9
CHARTER TRAINS AND COACHES

UZD has a policy of providing charter coaches and trains upon request. It has recently acquired 25
new passenger coaches, essentially to the same design as other UTY coupe cars. We understand these
cars are being used exclusively on charter services.
Prices for charter services are calculated based on a fixed tariff, set presumably to recover
incremental costs with a margin rather than to reflect potential value to customers or their ability to
pay.
We were provided with some examples of how charges are calculated for charter coach services.
One is international, crossing through Turkmenistan and Kazakhstan. The second is entirely
within Uzbekistan.
Urgench Ganjushkino - Urgench
Distance 1309 km
Passengers 54
Rate
9.739 cym / passenger -km
688,419 cym
Tax at 20%
137,684 cym
Sub total
826,103 cym
Return trip
826,103 cym
Coach charter
60,000 cym /day x 5 days
Bedding
910 cym / person x 2
TOTAL
300,000 cym
98,280 cym
2,050,486 cym
Per person
37,971 cym
Tashkent Bukhara Samarkand Tashkent

Distance 1204 km
Passengers 36
Rate
13.08 cym / passenger -km
Discount 15%
567,009 cym
(85,051 cym)
Tax at 20%
96,392 cym
Sub total
578,350 cym
Coach charter
30,000 cym /day x 4 days
Bedding
330 cym / person
TOTAL
120,000 cym
11,880 cym
710,230 cym
Per person
19,728 cym
The rates, per passenger km, are set according to a printed tariff, which is denominated in Swiss
Francs and apparently used by most or all CIS railway administrations. To calculate the rate payable
by the customer, this is converted into Uzbek Sum (cym) at the current exchange rate. This might
explain why a higher rate is charged, per passenger km, for the trip within Uzbekistan.
It is not clear why a 15% discount is then applied to the domestic trip. This may be a discount
offered by UZD for wholly domestic trips, where it has freedom to set the actual rate. For
international journeys the fare must be hared with other CIS railways on an apportioned basis, and it
may not be so easy to agree deviations from the standard tariff. It is not known whether UZD offers
this discount selectively or to every customer.
Page 10
The coach charter price appears to be calculated at a rate of 30,000 cym per day for a 40 person
coach, with two coaches required for the 54 passenger group.
It is not clear why bedding is charged at 910 cym per person each way on the Urgench Ganjushkino
trip, but only 330 cym per person for the 4 day domestic journey.
We were also provided with some information as to the number of passenger carried on charter
trains and chartered cars. We have not yet been able to verify this information and it is possible that
it is not correct.
1/2001 11/2001
Foreign passengers in
chartered trains or coaches
Passengers
Revenues
Revenue per passenger
Domestic in chartered trains or

coaches
466
4,912
$34,000
53.000,000 cym
$72
10,789 cym
Altogether UZD handled about 60 charter services in 2001, mostly domestic but also 7 to Moscow
and 1 to Minsk.
However, any tariff structure has advantages and disadvantages.
A tariff structure has some advantages:
Fares are easy to calculate;
It is fair, in that all passengers making similar journeys are charged similar amounts;
Easily shared between UZD and other CIS railways, on an apportioned basis.
However a tariff structure also has some disadvantages.
If it is too simple, it may not reflect all costs. In some cases, the quoted price may be below
incremental costs, so that UZD loses money by carrying the traffic. For example, coaches may
be scarce at busy times of the year, or it may be necessary to move a carriage empty to suit a
charter customer;
It will not maximise revenue. Customers have varying need to travel and willingness to pay. For
many customers, the tariff price may
be a bargain, and they would be
willing to pay much more. If UZD is
to be profitable, it needs to charge
what the market can bear.
Figure 8
Booking Office Clerk in Urgench Station
However, for some customers the

tariff may be too high, so that trips
are not made, or are made instead by
bus or car. For these customers,
UZD should consider offering
discounted prices provided it can still
cover its incremental costs.
Further analysis is required to determine
whether UZD makes a profit on charter
services. However, our initial impression
is that charges are very low, and that total
revenues could be increased by raising
fares.
Page 11
CHAPTER 3
POTENTIAL FOR RAIL TOURISM
SCOPE AND TARGET MARKET

Rail tourism ranges from short trips lasting under one hour on preserved railways to long haul
trans-continental journeys extending over several days (and nights).4 Rail tourism is travel by rail for
its own sake, even where it may be slower and more expensive than other modes. This makes rail
unusual among transport modes. Transport operators are usually concerned with carrying the offered
traffic as cheaply and quickly as possible. Rail tourism operators are concerned with generating
traffic, often enhancing the product so as to be able to charge higher prices. The usual transport
policy issues of capacity and cost-effectiveness often do not apply. Sometimes it even makes sense to
run the train slower so as to increase the sightseeing potential or to offer more appropriate arrival
and departure times.
This study concentrates primarily on use of rail by tourists for travel within Uzbekistan. There are
several reasons for this:
Travel within
Uzbekistan is most
likely to generate
substantial income
for Uzbekistan
Railways and
contribute to its
financial viability.
The geography is
such that Tashkent
is very close to the
Kazakh border, and
most of the revenue
from long distance
travel to Uzbekistan
is shared with other
CIS railway
administrations;
Uzbekistan already
attracts substantial
numbers of tourists
who travel to Tashkent, Samarkand, Bukhara and Khiva, all of which are served by rail. There is
less risk in developing an existing market as compared with establishing a new one.
Figure 9 Bukhara Medressa and the Ark Fortress
The Government of Uzbekistans visa policy suggests some caution about development of
tourism, particularly where it might increase social tensions.
Air is more suited than long haul rail to carry older, higher spending serious tourists, who
usually want to limit total holiday length to a maximum of two or three weeks.
The existing Uzbekistan tourist market, which can be characterized as middle-aged, affluent, serious
sightseers, are unlikely to be attracted to a long train journey to Uzbekistan. However, international
experience suggests that this market would be interested in using rail for shorter, daytime or
overnight journeys within Uzbekistan.
See Rail Tourism Concepts, provided in Appendix [ ] for discussion of successful rail tourism businesses
around the world.
4
Page 12
Rail travel can be preferred for several reasons:

It is safer, particularly where roads are bad or run through a hostile environment (for example
across the desert)
It is more pleasant, because of the ability to walk around, use a toilet, or sit at a table for a drink
or meal
It offers variety to the travel experience, with exposure to another side of local life
It is an opportunity for genuine contact with local residents either at stations or on trains
Rail is particularly attractive for half-day or all-day journeys where roads are poor and there are no
intervening tourist sights. Where sleeper trains can be used, rail can offer an efficient alternative both
in cost and time to a long daytime journey and an overnight hotel stay.
There may also be some potential to encourage more use of rail for travel to Uzbekistan, and indeed
across the CIS. However this would require cooperation of other CIS railway administrations and
was considered to be beyond the scope of this technical assistance programme. Long haul rail, as it
operates in Europe, America, and Australia, attracts the young and the old, who have time to spare.
The young backpacker market is typically aged 18 to 30, including university students, while the
older market comprises affluent retired people. Although backpacker spend is lower, on a per
person-night basis, this is a large and potentially valuable market. The backpacker name is
misleading, as most come from affluent families, and often carry credit cards and even mobile
phones. Long haul rail tourism travel to Uzbekistan and around the CIS could be the subject of a
further study.
CURRENT TOURIST TRAFFIC

Currently, there is very little use of rail by tourists within Uzbekistan. In May 2001, UZD sold 703
tickets to foreigners, earning about $10,000. 5 This suggests rail is currently used by less than 5% of
tourists for travel within Uzbekistan.
We were not able to obtain any data on international tourist travel by rail to Uzbekistan. There are
three trains each week to and from Moscow, and weekly services also from Almaty, Ufa, and Irkutsk.
These trains are heavily used, but almost entirely by CIS residents. Anecdotal evidence6, and
observation of an arriving train from Moscow at Tashkent Main Station, suggests that few
international (non-CIS) passengers use train to travel to Uzbekistan.
There are a few long haul charter train trips each year, run by European operators, which are routed
via Uzbekistan often as part of a longer Trans-Siberian trip.
TRAVEL INDUSTRY IMPRESSIONS

Most tourists to Uzbekistan travel with inclusive tour packages7. This means all travel, hotels, and
most meals, are selected in advance by a tour operator. The tour operators sell their packages to tour
retailers in the home countries, in particular Germany, France, Japan, Netherlands, Britain and USA.
These figures are based on hard-currency ticket sales, which will include all non-residents e.g. diplomats who
may not be tourists.
6 John Armistead (see website http://www.johndarm.clara.net/silkroute/part2.html ) does not report
encountering any other international tourists on his rail journey from Moscow to HongKong via Uzbekistan.
7 Industry sources quoted a figure of 80%. This is roughly consistent with the survey, which reported 56% in
packages, but in a sample including 23% business travelers.
5
Page 13
Tour operators and retailers build their reputation by satisfying tourists, who then recommend a
company to friends. While there are few tourists who make repeat visits to Uzbekistan, many tourists
will purchase another trip from the same tour retailer. The views of tour operators are therefore
decisive in whether tourists to Uzbekistan even consider travel by rail.
We spoke with five tour operators, and with managers of major hotels in Urgench, Bukhara,
Samarkand and Tashkent. We also spoke with other persons in the travel industry, including hotel
front desk (concierge) staff. Most of these people never use the train and have had no experience
with the train for many years. We also spoke with travel agents in Britain who specialize in tours to
Asia. The general view is that train services have deteriorated since independence, and they
discourage people from using trains in Uzbekistan.
We spoke with tourists who had recently used trains in Kazakstan and other neighbouring countries.
Fares are very low, but the quality of accommodation is also perceived by tourists and by tour
operators as poor.
A few tour operators book passengers onto overnight trains for a segment of their holiday, and some
occasionally charter entire trains for special excursions. However most tour operators do not
consider rail services to be good enough for international tourists.
TOURIST SURVEY FINDINGS

As indicated above, we commissioned an interview survey of departing passengers at Tashkent
Airport, to better understand the existing tourist market and the potential for rail tourism. Survey
results confirm the view that many tourists would like to travel by rail as part of their visit to
Uzbekistan. About 28% of survey respondents express an interest in taking a luxury train between
two cities, for which they would be willing to pay an average of $49.
Two-thirds of respondents had travelled by rail on holiday, in the past three years, and 40% said they
had done so within the past year. 47% said they considered taking a train in Uzbekistan, although
apparently none of the 497 respondents had actually done so.
Respondents were asked why they had not used the train on this trip.
Do not like trains
Did not answer
Not enough time to take the train
Prefer other transport
Other reason
10% (of all respondents).

33%
4%
2%
3%
Did not know there was a train

Was not included in package tour
Was told that the train was not good
Train times were not suitable
Did not know how to buy tickets
20%
11%
11%
8%
7%
TOTAL:
rail.
109% indicating that about 9% of respondents gave more than one reason for not using
Considering that Uzbek Railway sleeping compartments currently are hotel rooms without private
toilets, we asked tourists whether they would consider staying in a hotel without private toilets. Two
thirds of respondents said they would not.
In a separate question, all survey respondents were asked how much they would pay for an overnight
luxury train between Tashkent and Bukhara. This question more specifically described the route and
Page 14
service, which would replace what for most tourists is an all-day road journey which they re-trace on
their return to Samarkand. 43% responded positively, again suggesting a willingness to pay $50 on
average. However there was a bimodal distribution, with about a third of respondents (14% of all
tourists, or potentially 7,000 per year or about 35 per day through the tourist season) suggesting they
would pay $100 or more.
Question 26: How much would you be willing to pay for an overnight luxury train trip between
Tashkent and Bukhara, with dining car, private air conditioned cabins with private shower and
toilets?
Per person, US
Dollar
Frequency
Percentage
5 - 14
11
2.2%
15 - 24
22
4.4%
25 - 34
28
5.6%
35 - 44
13
2.6%
45 -54
56
11.3%
55-64
1.2%
65 - 74
1.4%
75 - 84
1.4%
85 - 94
100
48
9.7%
150
1.4%
190
0.2%
200
0.8%
250
0.4%
300
0.2%
500
0.2%
Nothing
64
12.9%
Nobody will want
0.2%
NO ANSWER
218
43.9%
Total
497
100.0%
Median
Second Peak
INITIAL ASSESSMENT OF OPPORTUNITIES

We have considered a wide range of possible improvements to attract more tourists onto
Uzbekistans railway services. We are proposing five specific initiatives:
First, we are recommending certain incremental changes to improve the marketing and delivery of
existing passenger rail services. Theses will attract more tourists, but will also benefit some domestic
travellers.
Second, we are proposing creation of a new class of service intended for international tourists.
Page 15
Third, we are proposing that a new company be created to promote and operate the new class of
service. This company would be a joint venture with a private-sector partner, and would operate
separately from UZD.
Fourth, we are recommending a review of pricing for charter train services, to increase profit
margins for UTY. We are not recommending that UTY take a more active role in promotion of
charter trains.
Fifth, we are proposing that UTY, together with other passenger railways in Central Asia and the
CIS, consider joint marketing and introduction of a tourist rail pass on the model of Eurailpass.
INCREMENTAL IMPROVEMENTS TO UZD SERVICES

Some tourists will be prepared to travel on existing rail services, if arrangements for booking berths
and purchasing tickets can be improved.
Improved Information
UZD should produce an up-to-date timetable with train information, in English and Russian. This
can be printed and distributed to tourists through hotels and travel agents, and posted on the web.
UZD marketing departments should also ensure that up-to-date information is provided to Thomas
Cook and other publishers of international train timetables.
Cost to produce the timetable and distribute it widely should be about $5,000 per year, which will be
recovered if it results in one additional tourist passenger per day.
Ticket Sales by Telephone, Fax and Email

UZD should establish a system to sell tickets to tourists who may communicate by telephone, fax, or
email. Tickets would be sent by post. UZD would levy a service charge, perhaps $5 per transaction,
which should cover costs.
NEW SILK TOURIST CLASS

Our research indicates that international tourists expect and can pay for a higher standard of
facilities in their hotels, so most will want a higher standard of accommodation on the train. More
specifically, two-thirds would not be willing to stay in a hotel without private toilets, and presumably
would look at a train much the same way.
The current rail tourism market seems too small to support the cost of operating entire trains
between the major cities. However, it should be possible to provide special coaches to carry
international tourists, coupled to existing trains. This has the advantage of lower costs, as trains
would share existing locomotives and timetable paths. Although UZD trains are often fully booked,
UZD could provide additional capacity at relatively modest incremental cost. It is not worth doing
this, at current fare levels. However it could worthwhile at the higher fares that international tourists
appear to be willing to pay.
Most tourists to Uzbekistan travel on standard itineraries. Rail can be most valuable where it
combines:
Overnight accommodation
Meals, ideally dinner and breakfast
Transport between two major sites (for example, Tashkent and Bukhara)
Passive sightseeing, out the window of the train in the evening and early morning.
Independent tourists and package tour operators currently pay $50 to $100 per person for these
elements of a tour, and can be expected to pay a similar amount for a rail journey that combines
them altogether.
Page 16
Tourists come to Uzbekistan to experience the culture and sites. Rail can provide another type of
experience and contact with Uzbek people. This suggests that tourists will not want to use a rail
service if it is entirely isolated from the domestic passenger rail services, and that tourists can share
the same stations as other passengers.
This strategy has two other implications.
Tourists will board at existing stations, and will mix with local passengers at least on the station
platforms. This can be a selling feature, as tourists who come to Uzbekistan are generally
interested in seeing the people as well as the historic sites.
Services will need to be reasonably compatible with existing train times, so as not to compromise
the efficiency of UZDs existing passenger operations.
Tashkent Samarkand is served by trains to further destinations, and departures are mostly in the
middle of the night. In any case the road journey is fairly short, and through fertile and interesting
scenery.
The Tashkent - Bukhara train is potentially more useful, allowing an overnight journey including a
twilight dinner. departure. However the 7AM arrival is too early for tourists, who would prefer to
sleep a bit later and have breakfast before sightseeing. Hotels cannot usually let arriving visitors into
their rooms before mid-morning at the earliest, as rooms must be cleaned after other guests depart.
Tashkent Urgench is served by a weekly train, departing Tashkent Saturday afternoon, and also by
through services to Nukus departing Monday and Thursday. The 24-hour journey including an
overnight journey followed by a day travelling through the desert is potentially attractive to tourists.
Tour operators should be able to devise tours that match the thrice-weekly train service with twice or
thrice-weekly international flight schedules.
UTY should establish a Joint Venture company to offer a new, higher quality rail product. The
working title for this is Silk Tourist Class.
Key features would be:
New or refurbished cars, with private toilets and showers in 2-berth coupes (as is standard in
USA and Australia);
Restaurant/lounge car, offering a choice of food, drinks and snacks;
Silk Tourist Class cars would operate coupled to existing UZD services. Passengers would board
at existing stations and cars would be hauled by the same locomotives;
Specially recruited and trained staff who would keep trains clean and who would provide
dedicated service to passengers;
Spaces sold through a new reservations system, separate from the UZD/CIS system. This would
allow more flexibility, as discussed below.
Higher fares would be charged for Silk Tourist Class, perhaps $60 per person in a 2-berth
coupe, and $40 in a 2 berth coupe for the Tashkent Bukhara route.
Silk Tourist Class will require new investment, new skills and new ways of working. It will also serve
a very different market, one that UZD barely penetrates. We think this service can be best delivered
by a new joint venture company, owned by UTY and private sector partners.
Sleeping Cars
Existing 2-person coupes, with two narrow berths on either side of a table, provide inefficient use of
space. They are essentially four-berth coupes with the upper berths missing. Upper and lower berths
Page 17
on one side could provide the same sleeping space, while the space on the other side could be used
to create private toilets and showers. See Appendix 5 for plans of the sleeping compartments on
Australias Great Southern Railway.
While the resulting compartments are narrower and less comfortable for eating and drinking, the
philosophy is that passengers mostly do this in the restaurant/lounge car which is designed to offer
comfortable space also for socialising and which has large windows for viewing the country.
Initial estimates are that it will cost about $45,000 per car, or about $5,000 per 2-berth coupe, to
refurbish the existing coupe cars and equip them with private toilets and showers. Assuming they are
used 100 nights per year, the investment will pay back in 1 year with a $25 fare premium.
Rolling stock refurbishment can be done in the existing Tashkent Coach Rehabilitation Workshop..
Restaurant /Lounge Cars

Existing restaurant cars can be improved to provide a more memorable tourist experience. This
would include:
Soft, low level lighting to allow a better view outside in the evening
Curtains to replace the window blinds
Table cloths
Printed menus in English and Russian, with attractive descriptions of the food and drink
available
Comfortable seating
A separate lounge area, with informal seating for drinking, meeting other travellers, or reading
A more varied menu, with salads and sweets to encourage customers to stay longer and spend
more.
Relation to UZD Trains

Initially, Silk Tourist Class cars would operate together with existing UZD trains, being pulled by the
same locomotives and stopping at the same stations. Eventually, they might be wholly separate trains.
However the costs of providing separate locomotives would greatly reduce or eliminate the potential
for Silk Tourist Class services to be profitable.
In commercial terms, Silk Tourist Class would be a separate train coupled to an existing UZD train.
Timings
We propose that train timings be adjusted, where possible, to better suit tourists. This will of course
sometimes mean that they do not suite existing passengers quite so well, however we think modest
trade-offs are possible.
Specifically:
The Tashkent Samarkand Bukhara and Bukhara Samarkand Tashkent trips would depart
earlier, probably 18: 00 from Tashkent and 17:00 from Bukhara, to allow a Samarkand stop
before midnight. This would make it attractive for use by Bukhara Samarkand and Tashkent
Samarkand passengers, for dinner only, arriving in time to check into a hotel in Samarkand.
Train arrivals times would be later, around 08:00, to allow breakfast on the train before arrival.
This could be achieved by running trains more slowly overnight, or even stopping them for an
hour or two on a siding. This has been common practice on some short overnight routes in
North America, and allows passengers a period of undisturbed deep sleep.
Reservations System and Fares

A new reservations system is required, separate from the system operated by UZD/CIS railways.
Key features would be:
Page 18
Ability to take bookings up to 12 months in advance (as compared with 40 days currently)
Pre-booking capacity for tour operators
Integration with travel industry hotel and airline reservation systems
Booking by independent travellers over the internet/web, with secure payment by credit card
Market pricing, with fares reviewed and adjusted to match demand and maximise revenues
These requirements are simple to specify but difficult to deliver. The system used by Great Southern
Railway required 12 months to develop and cost almost $2 million. More complicated systems for
AMTRAK and VIA Canada were even more expensive.
CHARTER SERVICE PRICING

Further information and analysis is required to determine whether UZD makes or loses money on
charter services, and whether higher or lower prices should be charged to some customers. This is
outside the scope of this report.
ASIA/CIS RAIL PASS

In terms of security and attractiveness to tourists, Central Asia is in a similar position to western
Europe after the second world war. As restrictions are eased, there will be growing interest in travel
through the region. While older travellers are likely to continue to prefer inclusive package tours and
quality hotels, youths and students will seek the adventure of travelling by train. There is the
opportunity to introduce a range of Asia/CIS Rail Passes, aimed at regional and international
tourists. This will facilitate and encourage use of rail by tourists, especially youths and students.
UTY could commence discussions with other regional rail operators as to their interest in establish
such a pass. If there is interest, a special dedicated team should be established, similar to Rail
Europe, to develop, promote, and manage the pass system. It might be appropriate to seek assistance
from Rail Europe in the development of the Asia/CIS rail pass.
Figure 10 Bukhara Station
Page 19
CHAPTER 4
IMPLEMENTATION
This sections sets out the steps to establishing a new joint venture company to develop and operate
the Silk Tourist Class concept.
Selection of Joint Venture Partner

UTY Working Group
A specialized working group should be formed to recommend the JV partner. The working group
should include a qualified lawyer, and one or two senior managers experience in passenger rail
operations.
The tasks of the group will include drafting the invitation, evaluating responses, meeting with
prospective bidders and clarifying any outstanding issues.
Invitation to potential partners

An invitation for joint-venture (JV) partners should be published in the European railway and
business press. Appendix 3 shows the text that was published in the Financial Times (London)
inviting bidders for the Estonian passenger rail joint venture. With minor changes the same text
could be used.
Content and preparation of bids

Bidders should be asked to describe in their proposals:
Business strategy
Financial projections
Staffing plan
Responsibilities of UTY
Responsibilities of the private partner (bidder) including financial commitments
Previous experience of the partner in rail tourism
Bidders should be offered at least two meetings with UTY/UZD officials during the preparation of
their bids. Bidders should also be offered basic information about UZD passenger services.
The Working Group will evaluate the proposals that have been received. They may ask one or more
bidders to attend a meeting to clarify any outstanding issues. The Working Group will then select the
most attractive commercial proposal or proposals for further approval by UTY management.
Top management of UTY shall be responsible for final selection of the JV partner. UTY may
establish a special Tender Committee for this purpose.
Establishment of Joint-Venture
Development of Charter and Constitutive (JV) Agreement
The prospective JV partner should draft a Charter and Constitutive (JV) Agreement, which will be
negotiated and agreed with the UTY Working Group. Documentation for registration of the JV shall
reflect the interests of both parties. The Joint Venture agreement would need to set out, among
other things:
UTYs contribution of rolling stock, with terms for refurbishment in the Tashkent Coach
Rehabilitation Workshop and for regular cleaning and maintenance
Provision of track and station access by UTY
Haulage by UTYs locomotives as part of UZD trains, at times to be agreed
Provision of skills and investment by the private sector partner
Page 20
Responsibility of the private sector partner for reservations system, marketing, and management
Method for sharing of costs and revenues between the partners.
The JV shall have the status of an independent enterprise, and shall have freedom in its commercial
and financial activities. This will enable it to be integrated into the market economy of Uzbekistan
and neighbouring countries.
Approval of JV by UTY management and other constitutors

The proposed Charter and JV Agreement shall be reviewed by UTY lawyers and other experts. After
legal assessment, the JV documents will be submitted for signature to UTY management and to
business partners. Simultaneously the Chief Executive of the JV will be appointed.
Registration of JV in Uzbekistan Ministry of Justice

The new JV shall be registered in the Ministry of Justice of Uzbekistan in accordance with the
standard registration procedures for juridical persons in the territory of the Republic. After receipt
of registration certificate office premises will be formed, a stamp (seal) will be received, bank
account will be opened, and trade mark of JV will be registered.
Page 21
APPENDIX 1 TRAIN TIMES

See the table below., which has been compiled from various sources and is believed to reflect train
services withinUzbekistan in July 2002.
NOTES
Departure and arrival times are shown local time, rounded to the nearest hour using the 24h clock.
Day of departure is shown as 1= Monday, 2=Tuesday etc 7=Sunday.
Where arrival time is on a following day, this is show as +1 or +2 etc.
Key trains are show from Kazakstan and Tashkent to Samarkand. All services also operate in the
reverse direction, usually with similar timings.
There are additional local services in the Tashkent area.
Trains 222 and 254 may now be routed by the new all-Uzbek route, running from Samarkand via
Uchquduq to Urgench, and missing Bukhara and Turkmenabad. Turkmenistan Railways may operate
other replacement services linking Turkmenabad to Bukhara.
Train 268 is apparently operated by Tajikistan Railways. It runs from Dushanbe to Khujand and
Kanibadam, which are both in Tajikistan, via Termez, Qarshi and Samarkand.
Train 280 runs beyond Termez to Denov, the last major town before the border with Tajikistan on
the route to Dushanbe.
Trains 658 and 660 link Tashkent to the Fergana Valley, crossing through Tajikistan. Train 658
operates via Namangan to Andjon. Train 660 operates via Margilon to Andjon.
Kazakstan Railways operates daily overnight services Almaty Tashkent, and services west from
Kungrad to Beyneu and Aksarayskaya.
There are also trains from Samarkand to Khujand in Tajikistan, some local services in the Tashkent
area and between Samarkand and Bukhara, and occasional services to Turkmentistan and Iran, and
to Volgograd via Astrakhan. Some services run beyond Termez to Dushanbe in Tadjikistan.
Page 22
Train Number
200
282
222
254
268
280
662
658
660
666
Moscow
Tashke
nt
Irkutsk
Tashke
nt
Ufa Tashke
nt
Almaty
Tashke
nt Nukus
Tahskent
Kungrad
Kanibadam
Dushanbe
TashkentTermez
Tashkent
Samarkan
d- Bukhara
Samarkand
- Bukhara
Samarkand
- Qarshi
Tashkent
Andijon
Tashkent
Andijon
Tashkent
Kitov
Trips per
week
Moscow
23h
16h Daily
19h Daily
18h 2
18h 4,5
20h 3,5
12h 3
09h 6,7
Irkutsk
21h
Almaty
18h
Ufa
TASHKENT
09h
18h +3
23h +4
14h +1
15h +1
17h 1,4
Andijon
Samarkand
20h?
24h
Bukhara
05h 2,5
Turkmenobad
18h
22h
01h
17h
07h 1-7
23h
16h
03h
20h
09h
Urgench
Nukus
18h 7
Kungrad
23h 2,5
Qarshi
22h
Termez
10h+1
12h +1
Kitov
Hours per trip
11h 4,6
67
96
29
48
29
20
12
Page 23
18
39
15
APPENDIX 2 INDUSTRY CONTACTS

Uzbekistan Temir Yullari Personnel and Facilities (Visited)
Uzbekiston Temir Yullari - Vladimir Yakovlevich Bakholdin Deputy Chairman (Passenger) 7 T.
Shevchenko Str Tashkent 70060. +998 71 136 44 31 F 133 6924 roadlaw@online.ru
UTY Headquarters Tashkent - Mr. Gaspadin Sultanor, Marketing/Restructuring Department
Tashkent Passenger Rail Depot Manager and Technical Manager
Tashkent Passenger Ticket Office Mr. Baktiar Polatovitch
Urgench Railway Station Deputy Station Manager
Samarkand Railway Station Mr. Makhmudov Station Manager
Kitov Railway Station
Bukhara Railway Station
Tashkent Railway Station
Hotels (Visited)
Urgench Jayhoon Hotel
Bukhara Palace Hotel - Ralf Poth General Manager 8 Navoi Str 705016 Bukhara tel +99 865 223
0024 fax 223 5119 mobile 718 0560 buchara@bu.uzpak.uz Mr. Poth is employed by Inpro Hotel
Management Gmbh
Farkhad & Mayas Guest House, Bukhara
Afrosiyab Hotel Samarkand - Farkhad Houdoyarev Manager
Melika Hotel Samarkand
Hotel Orient Star Samarkand
Melika Hotel Tashkent
Tashkent InterContinental Hotel Mr. Kees Kramer Manager 107 Amir Temur Street Tashkent
700084 +998 71 120 70 00 f 6161 kees_Kramer@interconti.com
Inbound Tour Operators

Chotqal Tours - Valentin Sadykov botiz-uzb@hotmail.com amco-botiz@yahoo.com 7 Beshterak
Street Tashkent 70060 +998 71 268 9342 F 268 9343 (interviewed)
Orient Voyages - Fattaev Shakuri Deputy Director. Also major tour coach operator. 14 Orzu
Machmudova Stre 703000 Samarkand T +998 662 33 00 M 38 18 10 (interviewed)
Sairam Tourism Rustam Mirzaem, Director General. Major inbound tour operator. 13-a
Movariunnahr, Tashkent 700060 T +998 71 133 35 59 F 120 69 37 silkroad@sairamtour.com.uz
(interviewed)
Silk Tour Limited - Saad Al-Haire Deputy Director. 1 Kuy Saray Sq. Samarkand 703057 T +998 662
331 735 F 311 735 H 33 76 77 M 38 44 66 (or 33 44 66?) silk@naytov.com www.silktour.uz
(interviewed)
Sitara, based in Islamabad, Pakistan, and specialising in package tours throughout central Asia
including Uzbekistan, Turkmenistan, Kazakhstan. www.sitara.com. Retail partners in Australia,
England, Germany, Austria, Netherlands, Switzerland, Italy, Canada, USA, Japan. (Website visited
only)
Global Travel , Anne Kooistrahof 15, 1106 WG Amsterdam Z.O. Holland
+31 20 696 7585 / 697 6202 email goldentrains.wxs.nl. Specialists in rail trips around the world.
Operate frequent trips (more than 20 in 1999) via Trans-Siberian railway. Have operated occasional
trips via Uzbekistan. Some trips are in coupes on regular scheduled services, some are in former
Politburo cars with shared toilet and shower facilities. (advertises in Thomas Cook timetable, not
contacted)
Lernidee Reisen Gmbh, Dudenstrasse 78, 10965 Berlin Germany. Advertises in Thomas Cook
timetable that cheap saloon coaches can be attached to any regular train starting from 6 people only.
Steppes East Limited, Castle Eaton, Swindon, Wiltshire SN6 6JU England +44 1285 810 267
www.steppeseast.co,uk Paul Craven, Genreal Manager (interviewed)
Travelwise Limited. Fortis Green Road, London N10 www.travelwiseuk.co.uk (Interviewed)
Page 24
APPENDIX 3 INVITATION FOR JV PARTNERS

Advertisement inviting proposals for joint venture company with Estonian Railways, posted
26/05/1998 in the Financial Times (London).
Page 25
Full Text of the Financial Times Announcement of 26 May 1998 (as shown on previous page)
CONTRACTS & TENDERS
Joint Stock Company Eesti Raudtee (AS Eesti Raudtee) announces
A COMPETITION
for finding an investor for establishing a company for providing nternational railway passenger
transportation services jointly with AS Eesti Raudtee
1. AS Eesti Raudtee acting pursuant to the "Reorganisation and Privatisation Scheme and Guidelines
for the State Enterprise "Eesti Raudtee" as approved by the ordinance no 442-k of the Government
of the Republic of Estonia of June 11th, 1997 shall establish a company for providing international
railway passenger transportation services (hereinafter: the Company").
2. The Company shall be established by AS Eesti Raudiee together with an investor (hereinafter;
"The Investor") as chosen on the basis of the present competition (hereinafter: "the Competition).
3. The Company shall be established in accordance with Estonian law with the decisive majority
(more than 50% of the votes determined by the shares) of votes belonging to the Investor.
4. The Competition shall be implemented pursuant to the terms and conditions set forth by the
Resolution of the general meeting of the shareholders, acting through the Minister of Transport and
Communications, of AS Eesti Raudtee of April 13th. 1998 (hereinafter "the Terms and Condition
of the Competition").
5. AS Eesti Raudtee shall, upon the formation of the Company, transfer to the Company as an inkind contribution, assets necessary for organising international passenger transport and conclude an
agreement for the utilisation of necessary railway infrastructure.
6. Upon the establishment of the Company, AS Eesti Raudtee and the investor shall conclude a
Shareholders' Agreement which shall, in compliance with the Terms and Conditions, set forth the
duties of the shareholders vis a vis the company..
7. Information on the Terms and Conditions of the Competition and the terms and conditions for
the establishment of the Company as well as the procedures therefore shall be delivered as a
standardised package in Estonian and English languages to the address indicated by the applicant
within three (3) days after the payment of 8,000 Estonian Kroons or 1,000 Deutsche Marks to the
bank account of AS Eesti Raudtee no 112023S719 in ihe Eesti Hoiupank, code 650. The sum
mentioned hereabove shall not be returned upon the closing of the Competition. Information on
the Terms and Conditions of the Competition shall be made available upon a written request
therefore to the address here below;
AS Eesti Raudlee
36 Pikk Street, suite 310
Tallinnil EEOIOO, ESTONIA
phone,+37261 58 508/telefax:+372 6 1587110
8. All natural persons or corporations existing under private law, except such persons in which more
than one-third of the votes determined by the shares or stock are held, directly or indirectly, by the
Republic of Estonia or any local government unit of Estonia. Shall be deemed qualified to
participate in the Competition.
9. The tender' shall be presented pursuant to the Terms and Conditions of the Competition in a
firmly sealed envelope marked as "Competition; International Passenger Transportation Company"
addressed to 36 Pikk Street, Tallinn EEOIOO, Estonia, the Chancellery of AS Eesti Raudtee.
10. Only the tenders that have arrived to the address indicated in Section 9 hereabove by 14:00 hours
August 1st 1998, Estonian time, shall be considered as participating in the Competition.
Page 26
APPENDIX 4 DETAILED SURVEY REPORT

The Tourist Survey was conducted by Expert Centre for Social Research, Tashkent, under the
direction of Arslan Joldasov.
1. Survey Questionnaire
The survey form was designed jointly by GB Railways and the Exper Centre for Social Research, and
translated into English, German, French and Japanese.
Page 27
2. Survey Distribution
Survey forms were given to international tourist passengers at Tashkent Airport Departure Lounge,
at the conclusion of their stay in Uzbekistan. Forms were not given to business travellers (initially,
but see below) or to tourists who had stayed less than 2 nights, for example in transit. Forms were
not given to Uzbekistan citizens. Where two or more people in a family were travelling together, only
one form was given to each family group.
Questionnaires were self-completed, and completed questionnaires were collected prior to departure.
Questionnaires were numbered in sequence, according to date, entered, processed and calculated.
Page 28
The survey was started according to the following schedule:

30.05 07.06.02 preparing and translating of the questionnaire
07.06 - 14.06.02 signing of the permission in the airport
14.06.02
training of the interviewers
14.06 - 26.06.02 first stage of fieldwork
First phase of the work was concluded in the preparing, updating and translating of the
questionnaire to three languages: German, French and Japanese. It occupied 8 days.
Interviews began on June 14th because signing of the permission took 8 days, contrary to our
expectations. Besides, administration of the international airport Tashkent agreed to permit the
working on the territory of airport only on the condition that just airport staff will carry out the
questioning.
During the first phase of the work we faced an unexpected problem - a very few quantity of tourists
visited Uzbekistan during this period. In view of this situation, it was decided to interview also
businessmen visiting Uzbekistan. Altogether, we have got during first stage 108 filled out
questionnaires - 50 questionnaires are filled out by businessmen and 58 by tourists. Thus, for 12 days
of twenty-four-hour work in airport covered 54 flights we have received only 58 tourist
questionnaires.
As explained to us by the tourist agency CAT Ltd., where we applied for receiving faster result,
this situation is caused by two reasons:
Terrorist attacks in America on the 11 of September reduced very much the quantity of
tourists visiting Central Asia;
June and July are the hottest months in Uzbekistan and the number of tourists is the least in
this period of year. The most favourable seasons for tourist trips in Uzbekistan are April
May and August October. .
The survey was stopped in June and continued since mid of September until the end of October.
During this time 392 passengers were interviewed. Three interviews were rejected because they were
unreadable for translators.
Flight number
201
London
231
Frankfurt
233
Frankfurt
Date of interview
Month
Number of
questionnaires
Frequency
Day
6
6
10
10
10
10
10
10
6
6
21
25
8
11
18
20
23
29
24
25
5
4
5
19
3
1
1
4
12
1
6
10
10
18
8
15
1
26
10
10
22
42
13
44
Page 29
Flight number
Date of interview
Month
Number of
questionnaires
Frequency
Day
10
6
6
6
6
10
10
10
10
10
10
10
10
10
29
18
21
25
24
4
8
11
15
18
20
22
25
29
3
2
3
7
1
8
25
37
20
3
2
7
18
4
24
6
10
10
10
6
6
10
10
10
18
8
22
31
20
24
3
24
9
4
4
1
15
1
1
6
1
2
445
Amritsar
10
24
10
10
463
10
30
501
Peking
10
11
11
6
6
6
10
10
21
19
26
2
9
4
1
1
10
1
6
10
6
10
10
10
10
10
6
6
10
10
6
17
14
20
3
4
9
10
24
17
20
3
10
26
11
20
7
19
1
1
2
33
4
3
22
9
1
251
Paris
301
Tel-Aviv
303
Tel-Aviv
3529
421
Delhi
423 Delhi
505
513
Seoul
525
Osaka
527
Osaka
531
Bangkok
533
137
9
15
13
31
63
38
Page 30
Date of interview
Flight number
Month
Bangkok
Day
10
10
6
10
10
10
10
6
6
10
6
6
6
553
Kuala Lumpur
7610
779
NO ANSWER
Number of
questionnaires
Frequency
2
30
19
9
14
23
25
25
25
22
20
24
25
2
1
3
2
10
1
1
1
1
2
2
5
16
Total
16
1
4
23
497
Survey Analysis
For precise wording of each question, see the survey form reproduced above.
Questions 1 8. 18 20 and 29 30 were designed to gather basic facts about the tourists and their
trip in Uzbekistan, to validate the survey sample and for analysis using cross-tabulations. The results
are consistent with expectations, suggesting that the survey has been carried out properly and that a
reasonable sample has been surveyed.
Q1. Are you traveling alone or with other family members?
Code
1
2
Description
Frequency
350
147
Percentage
70,4
29,6
Valid
NO ANSWER
Not asked
129
18
350
Percentage
26,0
3,6
70,4
Mean
Min
Max
2,2
2,0
5,0
Alone
With family
Q1_1. How many people, including myself, in your family group on the trip?
Code
99
Description
Frequency
Note that as the average group size was 2.2, we actually surveyed about 650 tourists. The survey was
done over 8 weeks, during the tourist season, when we would expect that about 16,000 tourists
visited Uzbekistan.
Some 350 respondents were not accompanied by family members, while about 300 were traveling
with family members. Note that some people would be traveling with friends who were not however
family members.
Q2. Is your trip for work or holiday?
Page 31
Code
1
2
Description
Frequency
Work
Holiday
115
382
Percentage
23,1
76,9
107
95
68
34
23
23
23
21
16
29
31
13
7
7
Percentage
21,5
19,1
13,7
6,8
4,6
4,6
4,6
4,2
3,2
5,8
6,2
2,6
1,4
1,4
479
18
0
Percentage
96,4
3,6
0,0
Q3. What country do you live in?

Code
1
2
3
4
5
6
7
8
9
10
11
12
13
99
Description
France
Japan
Germany
Australia
Belgium
England
USA
India
Israel
Other European countries
Asian countries
CIS countries
Other countries
NO ANSWER
Frequency
Q4_1. How many days long is your visit in Uzbekistan?

Code
99
Description
Frequency
Valid
NO ANSWER
Not asked
Mean
Min
Max
15,5
1,0
1095,0
90% were staying less than 13 days in Uzbekistan, while 10% stayed more than 60 days.
Q4_2. How many days is your entire trip?
Code
99
Description
Frequency
Valid
NO ANSWER
Not asked
Mean
Min
Max
367
130
0
Percentage
73,8
26,2
0,0
18,7
2,0
365,0
Q5. What other countries are you visiting on the trip?

Code
1
2
3
4
5
6
7
8
9
10
11
Description
Uzbekistan only
Kyrgyzstan
Turkmenistan
Kazakhstan
China
Thailand
Malaysia
Russia
Tadjikistan
European countries
Other Asian countries
Frequency
199
53
46
46
42
16
13
13
12
19
39
Percentage
40,0
10,7
9,3
9,3
8,5
3,2
2,6
2,6
2,4
3,8
7,8
Page 32
12
13
14
98
Many
Countries of Middle East
Other countries
NO ANSWER
4
11
12
109
0,8
2,2
2,4
21,9
Most people appear to be on a two week trip, mostly in Uzbekistan with a short stop in one other
country.
Q6. Is this your first visit to Central Asia?
Code
1
2
Description
Frequency
Yes
No
360
137
Percentage
72,4
27,6
473
1
7
11
4
1
Percentage
95,2
0,2
1,4
2,2
0,8
0,2
485
295
357
406
212
18
5
50
3
Percentage
97,6
59,4
71,8
81,7
42,7
3,6
1,0
10,1
0,6
For most people, this is their first visit to central Asia.

Q7. How did you enter Uzbekistan?
Code
1
2
3
4
5
9
Description
Frequency
Airplane
Train
Car
Bus
Coach
NO ANSWER
Q8. What places have you or will you visit on this trip?
Code
1
2
3
4
5
6
7
8
99
Description
Frequency
Tashkent
Khiva
Bukhara
Samarkand
Urgench
Termez
Uchquduq
Ferghana valley
NO ANSWER
As the survey was conducted at Tashkent Airport, it is not surprising that most respondents arrived
in the country by air and most visited Tashkent. Most also visited Samarkand, Bukhara, and Khiva.
Q29_AGE. Age
Code
99
Description
Frequency
Valid
NO ANSWER
Not asked
455
42
0
Mean
Min
Max
50,4
15,0
85,0
Percentage
91,5
8,5
0,0
Q29_GENDER. Gender
Code
1
2
9
Description
Male
Female
NO ANSWER
Frequency
265
207
25
Percentage
53,3
41,6
5,0
Page 33
Q30. Occupation
Code
1
2
3
4
5
6
7
9
Description
Student
Retired
Professional worker
Teacher
Other office worker
Factory worker
Other
NO ANSWER
Frequency
Percentage
12
150
114
21
64
10
118
8
2,4
30,2
22,9
4,2
12,9
2,0
23,7
1,6
Q18. What countries did you visit on your last three trips (not including this trip)?
Code
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
99
Description
USA
Russia
China
France
Italy
Germany
England
Spain
Turkey
Switzerland
Former socialist countries of Europe
Other countries of Europe
Uzbekistan
Kazakhstan
Asian countries of CIS
Other countries of CIS
Thailand
India
Vietnam
Iran
Other countries of Asia
Countries of North America (except USA)
Peru
Other countries of South America
Morocco
Egypt
Other countries of Africa
Countries of continent of Australia
Other (Arctic, Bali island)
NO ANSWER
Frequency
65
55
53
42
37
33
33
32
23
14
31
76
25
23
30
23
35
17
15
23
133
27
18
40
18
18
71
27
5
68
Percentage
13,1
11,1
10,7
8,5
7,4
6,6
6,6
6,4
4,6
2,8
6,2
15,3
5,0
4,6
6,0
4,6
7,0
3,4
3,0
4,6
26,8
5,4
3,6
8,0
3,6
3,6
14,3
5,4
1,0
13,7
Tourists to Uzbekistan are, in general, seasoned travelers who have already been to many other
countries.
Q19. How many internal flights did you take within Uzbekistan on this trip?
Code
96
97
99
Description
Valid
None
Many countries (without name of country)
NO ANSWER
Not asked
Mean
Min
Max
Frequency
336
156
1
4
0
Percentage
67,6
31,4
0,2
0,8
0,0
1,4
1,0
7,0
Page 34
Tourists took, on average, 1.4 internal flights suggesting most travel was done by road.
Q20. Are you on a package tour, including all hotels and internal transport?
Code
1
2
9
Description
Frequency
Yes
No
NO ANSWER
277
205
15
Percentage
55,7
41,2
3,0
Assuming that only tourists would use package tours, not business travelers, more than 70% of
tourists are on a package tour.
Questions 9 22, 25, and 27 explored satisfaction with the tourist experience in Uzbekistan,
traveling habits and preferences of the tourists.
Q9. The hotels you stayed in were generally:
Code
1
2
3
9
Description
Frequency
Good
Variable
Bad
NO ANSWER
271
171
30
25
Percentage
54,5
34,4
6,0
5,0
While most tourists were happy with the quality of hotels, a significant share were not.
Q10. Were hotels, on average, better or worse than where you usually stay when you travel?
Code
1
2
3
9
Description
Frequency
Better
Worse
Same
NO ANSWER
147
196
84
70
Percentage
29,6
39,4
16,9
14,1
Q11. Were hotels, on average, more or less expensive that when you usually travel?
Code
1
2
3
9
Description
Frequency
More expensive
Less expensive
Same
NO ANSWER
149
165
34
149
Percentage
30,0
33,2
6,8
30,0
340
157
0
Percentage
68,4
31,6
0,0
Q16. How much do you expect to spend on this trip per person (in pounds)?
Code
99
Description
Frequency
Valid
NO ANSWER
Not asked
Mean
Min
Max
1049,2
12,0
9690,0
Q17. Is this more or less than you usually spend on a holiday?

Code
1
2
3
9
Description
More
Less
Same
NO ANSWER
Frequency
155
185
52
105
Percentage
31,2
37,2
10,5
21,1
Page 35
Question 10, 11, 16 and 17 indicated that most tourists were staying in hotels that were either better
(and more expensive) or worse (and less expensive) than they were used to. This suggests that
Uzbekistan needs to develop a wider diversity of hotel types, to serve a range of budgets. Some
people want to pay less, and get less, while others would be happy to pay more.
Q22. Would you stay in a hotel without private toilets and showers?
Code
1
2
9
Description
Frequency
Yes
No
NO ANSWER
155
336
6
Percentage
31,2
67,6
1,2
As we suspected, the majority of tourists were not interested in staying in a hotel without private
toilets or showers.
Q25. Would you recommend a visit to Uzbekistan to a friend?
Code
1
2
9
Description
Frequency
Yes
No
NO ANSWER
438
40
19
Percentage
88,1
8,0
3,8
A high proportion of departing visitors would recommend travel to Uzbekistan to a friend.

Q27. How many days did it take to get your visa to visit Uzbekistan?
Code
97
99
Description
Valid
Obtained by travel agent
NO ANSWER
Not asked
Frequency
217
228
52
0
Mean
Min
Max
Percentage
43,7
45,9
10,5
0,0
16,6
1,0
360,0
Questions 21, 23, 24,26 and 28 were designed to determine propensity to use a train in Uzbekistan,
specifically the Silk Tourist Class product.
Q21 CODE. What would you like to do or have done during your holiday?
Code
1
2
3
4
5
6
7
8
99
Description
Ride a camel in the desert
Helicopter flight over Samarkand
Take a luxury train between two cities
Visit the zoo in Tashkent
Trip in mountains
Trip to Aral sea
Visit of Termez and Ferghana valley
Other
NO ANSWER
Frequency
204
142
140
130
3
3
3
47
203
Percentage
41,0
28,6
28,2
26,2
0,6
0,6
0,6
9,5
40,8
This question confirmed that there is significant interest in use of rail. Rail was of more interest than
a trip in the mountain or to the Aral Sea. Note that respondents had not been told that the
questionnaire was focused specifically on use of rail.
People were asked to give their willingness to pay for each suggested activity.
Page 36
Q21 SUM_1. How much would you be willing to pay for ride a camel in the desert (USD)?
Code
0
99
Description
Frequency
Valid
Not interesting
NO ANSWER
Not asked
95
92
17
293
Mean
Min
Max
Percentage
19,1
18,5
3,4
59,0
24,6
1,0
300,0
Q21 SUM_2. How much would you be willing to pay for helicopter flight over Samarkand (USD)?
Code
0
99
Description
Frequency
Valid
Not interesting
NO ANSWER
Not asked
76
60
6
355
Mean
Min
Max
Percentage
15,3
12,1
1,2
71,4
52,7
5,0
500,0
Q21 SUM_3. How much would you be willing to pay for take a luxury train between two cities
(USD)?
Code
0
99
Description
Frequency
Valid
Not interesting
NO ANSWER
Not asked
85
44
11
357
Mean
Min
Max
Percentage
17,1
8,9
2,2
71,8
49,2
1,0
250,0
Q21 SUM_4. How much would you be willing to pay for visit the zoo in Tashkent (USD)?
Code
0
99
Description
Frequency
Valid
Not interesting
NO ANSWER
Not asked
73
54
3
367
Mean
Min
Max
7,1
1,0
50,0
Percentage
14,7
10,9
0,6
73,8
Q21 SUM_5. How much would you be willing to pay for trip in mountains (USD)?
Code
0
Description
Valid
Not interesting
Not asked
Mean
Min
Max
Frequency
Percentage
2
1
494
0,4
0,2
99,4
100,0
100,0
100,0
Page 37
Q21 SUM_6. How much would you be willing to pay for trip to Aral sea (USD)?
Code
0
99
Description
Frequency
Valid
Not interesting
NO ANSWER
Not asked
Percentage
1
1
1
494
Mean
Min
Max
0,2
0,2
0,2
99,4
100,0
100,0
100,0
SUM_7. How much would you be willing to pay for visit of Termez and Ferghana valley (USD)?
Code
0
Description
Frequency
Valid
Not interesting
Not asked
Percentage
1
2
494
Mean
Min
Max
0,2
0,4
99,4
200,0
200,0
200,0
Q23. Did you consider taking a train while visiting Uzbekistan?

Code
1
2
9
Description
Frequency
Yes
No
NO ANSWER
232
250
15
Percentage
46,7
50,3
3,0
53
19
103
48
52
41
35
11
16
166
Percentage
10,7
3,8
20,7
9,7
10,5
8,2
7,0
2,2
3,2
33,4
Q24. Why you did not take the train?

Code
1
2
3
4
5
6
7
8
10
99
Description
Train is not included in tour
Few time to take train
Do not know about train
Do not like train
Was told it was not good
Trains times were not suitable
Did not know how to buy tickets
Prefer other transport
Other
NO ANSWER
Frequency
A high proportion almost half did consider use of the train while in Uzbekistan, but were
discouraged or unable to do so for various reasons.
Q26. How much would you be willing to pay for an overnight luxury train trip between Tashkent
and Bukhara with dining car, air conditioned compartment with private toilet and shower?
Code
0
98
99
Description
Valid
Nothing
Nobody will want
NO ANSWER
Not asked
Mean
Min
Max
Frequency
214
64
1
218
0
Percentage
43,1
12,9
0,2
43,9
0,0
66,1
5,0
500,0
Page 38
Almost half responded positively to a more detailed descriptioin of a luxury train between
Tashkent and Bukhara.
Q28. When did you last travel by train when on a holiday?
Code
1
2
3
4
9
Description
Earlier this year
Within past 3 years
Within past 5 years
More than 5 years ago
NO ANSWER
Frequency
203
126
26
83
59
Percentage
40,8
25,4
5,2
16,7
11,9
Indeed, many tourists said they had used rail on another recent holiday, and there was a high
correlation between recent use of rail on holiday and willingness to pay. 329 of 497 respondents had
used rail within the last year or the last 3 years, when on holiday, and were willing to pay on average
about 70 for the suggested rail journey.
Q26 x Q 28
.How much would you be willing to pay for an overnight luxury train trip between Tashkent and Bukhara?
Statistics
Answered
214
mean
min
max
Total
66.1
5.0 43.1%
500.0
Nobody will
NO
want
ANSWER
Nothing
64
12.9%
1
0.2%
Total
218
43.9%
497
100.0%
Last travel by train during a holiday

86
Earlier this year
mean
min
max
62.0
5.0 42.4%
250.0
mean
min
max
72.1
5.0 50.8%
250.0
31
15.3%
64
Within past 3 years
mean
min
max
50.6
10.0 65.4%
100.0
mean
min
max
72.6
5.0 42.2%
500.0
8.7%
mean
min
max
67.1
10.0 20.3%
300.0
51
13
26
100.0%
35
42.2%
5
8.5%
126
100.0%
19.2%
15.7%
203
100.0%
40.5%
15.4%
12
NO ANSWER
41.9%
35
More than 5 years ago
0.5%
85
11
17
Within past 5 years
83
100.0%
42
71.2%
59
100.0%
Detailed analysis revealed many other interesting characteristics of the survey respondents, which
may or may not be representative given the modest survey sample.
While 77% of respondents were on holiday, 52% or 12 of the 23 Americans said they were on
business. This is explainable by the reluctance of Americans to holiday in the region, and the
presence of US government and military personnel in Uzbekistan.
Page 39
Some 81% or 17 of the 21 Indian respondents were on business.

Average (mean) length of stay was 18 days, but for Americans it was 55 days and for Indians 58
days.
50% of English, and 60% or more of French, Japanese and Belgians were visiting only
Uzbekistan on this trip. More than 80% of Americans and Germans, and 100% of Australians
were visiting at least one other central Asian country. Curiously, nobody reported that they had
visited Afghanistan.
65% of English and 40% of Americans had been to central Asia before. For more than 80% of
other European and Japanese, this was their first trip to the region.
9% of Americans entered Uzbekistan by car.
97% of Australians but only 4% of Americans made it to Khiva
24%of Japanese and 30% of English rated hotels as good. 61% of English and 52% of
Japanese said hotels were worse than they were used to staying in
90% of Japanese would stay in a hotel without private toilets and showers, as against only 31%
overall.
Page 40
APPENDIX 5 INTERNATIONAL RAIL

TOURISM MODELS
Rail tourism takes many different forms in different places around the world. This depends upon the
nature of the tourist market, characteristics of the railway network, and also the attitude of the
railway company to tourist passengers. There are more than a hundred passenger rail businesses in
the world, and each is different. This section will consider some of the railways where tourist
revenue is an important part of the business. In each case we will consider the tourist offer, and how
it is marketed, packaged, and priced.
We divide rail tourism models into five
main models
InterCity mostly daytime routes in
western Europe, operating many
journeys per day with tourists carried
together with other passengers
Long Haul mostly overnight routes in
North America, Australia, Africa. While
some still perform an important
transport function, air is often cheaper
as well as faster.
Cruise Trains special trains for
tourists, not usually operated to a
regular timetable.
Preserved Railways short railway
routes used almost entirely by tourists
for sightseeing
Figure 11
Family Dinner on the Indian Pacific, Great Southern
Railway, Australia
Tourist Cars special cars offering a

higher standard of accommodation for
international tourists but sharing locomotive power with regular trains serving a local transport
function.
.
This classification is somewhat arbitrary and some services straddle more than one category. While
we consider railway services in many countries and of many types, we do not attempt to cover all of
the hundreds of rail services around the world that are used by tourists.
InterCity Railways
In Western Europe there are frequent intercity passenger services to a high standard. Most of these
trains operate during the daytime but some longer routes run overnight.
Inter-city services are operated mostly for use by domestic travellers, but they are also actively
marketed also to international tourists through special sales channels. Typically, tourists contribute
5% to 25% of total revenues. The railway companies incur little additional cost as most European
trains operate to frequent timetables and have empty seats except at peak times. So tourist income
goes mostly to profits (or to reduce losses).
Various tactics are used to attract tourists onto the railways, and to maximise revenues from them.
Advertising
European railways are marketed directly to tourists through print advertising in magazines,
newspapers, and travel brochures. The railway companies place advertisements individually but also
jointly with each other and in conjunction with national tourism development agencies. Railway
companies jointly advertise through Rail Europe, and offer special tourist tickets such as Eurailpass,
which is described below.
Page 41
Ticket Sales Offices

European Railways provide special travel centre booking offices at major railway stations, with
multi-lingual staff. These offices provide maps and timetables, and often also offer hotel and airline
booking services.
European Railways also sell some tickets through travel agents, paying commissions of 5% to 10%.
Travel agents do not make much money at this rate, given the low value of rail tickets compared with
hotels and air tickets, and some agents refuse to participate.
Internet Ticket Sales

The Internet is a very effective way to provides accurate, up to date information about train services
and to sell tickets without paying commission costs. Most European railways offer train information
and ticket purchase on the internet.
Some of the sites are very sophisticated, with journey planners which calculate the fastest and
cheapest routes between stations. The Swiss and Italian websites even cover international journeys
and some connecting bus services.
Rail Passes
Beginning in the 1960s, the European Railways introduced a system of tourist rail passes, which
allow unlimited travel across the network for a fixed period of time.
Rail Europe developed the rail pass concept and markets it on behalf of more than 60 railway
companies. It advertises in Europe and America, and produces a timetable showing key trains for
travel across Europe.
The EuRail pass is aimed primarily at American and Canadians. It can only be purchased in the
travellers home country before beginning the holiday. It has proved very attractive as tourists do not
need to worry about changing money or
purchasing tickets for each journey from
a local ticket office where English might
not be spoken.
The Inter Rail pass is aimed at European
youths and students. It can be used by
anyone under 26, and can be purchased
within Europe but cannot be used in the
country of residence. It allows second
class travel in all countries other than the
country of residence. This pass
encourages European students to explore
the continent by rail.
There are more than 30 different passes
available, with validity in individual
countries or groups of countries, and
with different durations. Cheaper passes
are available for youths and for persons
over 60 years old. Children can travel free
with an adult pass holder. Some passes
include free or discount travel also on
ferries and mountain railways. EuRail
passes are sold through Travel Agents,
Figure 12
Inter-Rail pass validity
who are paid commission of 10% or
higher. They can also be purchased on
the internet with a credit card. See
www.RailEurope.com
Page 42
Table 1 Selected European Rail Passes

PASS
VALIDITY
PRICE
Eurail Pass
All members of the European Union except

Great Britain, plus Norway and Hungary
$918 for 30 days, First Class
East Europe
Flexi Pass
Poland, Czech, Slovakia, Hungary, Austria
$220 for 5 days within one

month, First Class
Balkan Flexi
Pass
Bulgaria, Greece, Macedonia, Romania,

Turkey, Serbia and Montenegro
$152 for 5 days within one

month, First Class
BritRail Pass
Unlimited travel within Britain
$599 for 15 days, First Class
Inter Rail Pass
All Eurail pass countries plus Britain, Turkey

and Morocco
$365 for 30 days8, Second

Class
In 2001, income from the BritRail pass, which is valid on most trains in England, was about $21
million. Income from all EuRail and InterRail pass products is estimated at substantially more than
$100 million.
Rail pass income is shared between the participating train companies on an agreed system, usually
based on independent surveys of how tourists actually use their passes. A substantial share (at least
10%) of rail pass income is used to cover costs of marketing the passes to the international travel
industry.
Although the rail passes certainly perform a valuable social function, they are commercial products
and generate additional net income for the railway companies. While the passes offer some savings
compared with purchasing individual tickets if they are used every day, research indicates that the
passes generate substantial additional income for the railways.
Market Pricing
While most railways still charge fares based on a tariff (a fixed rate per kilometre), British and French
InterCity railways adopted market pricing many years ago. Fares are set to maximise revenues, with
the highest fares for open tickets, which can be purchase immediately before departure and used
on any train. Table 1 shows some of the fares offered for London Manchester, a 320 km distance
with a journey time of about 2h 45 minutes. There is one train every hour on this route, from early
morning until the late evening.
Table 2 Sample London Manchester Fares
TICKET TYPE
PRICE9
RESTRICTIONS
First Class Open One-way
$175
None; includes meals
Second Class Open One-way
$99
None
Saver Second Class Round-trip
$76
Cannot be used on busiest trains
Advance Purchase Round Trip
$30 to $45
Purchase 7 days in advance
Note that the cheapest round trip ticket at $30, or $15 for a one way trip, is less than one-tenth the
First Class fare. This is similar to the differential on long-haul commercial airlines.
The First Class fare includes on-board at-seat meal service, and is aimed at business travellers and is
priced to compete with airplane fares. Open tickets can be used on any train without reservation,
and also allows free stopover at intermediate stations.
Saver tickets are intended to attract passengers who want flexibility but do not need to travel at the
busiest times. This helps to reduce overcrowding on peak trains, spreading traffic through the day.
8
9
Priced in Euros, converted at 1 = $1.

Fares in Sterling are converted at 1.5 to the US Dollar.
Page 43
Cheaper tickets are subject to special restrictions including advance booking requirements and
penalties for cancellation or refund. Computer reservations systems are used to limit the number of
the cheapest tickets, so as to ensure that space is always available for the high-fare business travellers.
Train companies adjust the number of seats available at each price every day.
These are only a few of the fares that are offered; there are more than 20 different fares available for
travel London Manchester. There are also further discounts available to students, children travelling
alone or as part of a family group, and persons over 60 years of age. Since there is very little business
travel on weekends, passengers with other tickets can upgrade to First Class once on the train, for a
payment of $5 to $15 depending upon the train and if space is available. This makes more space for
second class passengers, while generating additional revenue for the train company.
The objective is to maximise revenues, by getting as much money as possible from each traveller,
while giving discounts as required to attract passengers who might otherwise travel by car or bus, or
simply not make the trip at all.
There is still government regulation of fares. In Britain, train companies are required under the
terms of their franchise agreements to reduce the off-peak return fare by 1% per year (after
inflation) since 1999. They are also required to offer tickets for children at 50% of the full fare.
Discounts are also available to students, people over 60 years, and families, who must purchase an
annual discount card. However other fares are unregulated.
Inclusive Package Products

Some European railways now sell
travel as part of packages including
hotel accommodation and theatre
tickets. These inclusive packages
are mostly aimed at local
(domestic) residents, and encourage
additional short holiday breaks at
times when the railway has spare
capacity. Usually the railway
company is able to negotiate
discounts on tickets and hotels,
offering a total package price that is
only slightly more than the rail fare.
Since the passengers purchasing
the package would probably not be
Figure 13
Glacier Express, Switzerland
travelling at all, the net benefit to
the railway company is substantial.
Packages usually require purchase
at least a week in advance and have
restrictions on refunds, to ensure that they are not used by travellers who would travel by rail in any
case.
Service Enhancement for Tourists

Swiss railways operate panoramic observation cars on several routes. These operate on routes and
in trains that also still perform a transport function. On some routes the observation cars are open to
all first class passengers. However, on some routes special supplements are charged.
The Glacier Express operates daily through the summer months between the two tourist resorts of
St Moritz and Zermatt. The 290km journey on narrow gauge railways, mostly above 1000m
elevation, takes 8 hours.
See www.Rhb.ch
Page 44
Chapter Title or Date
REPORT TITLE
Long Haul
Many countries run long-haul sleeper services. Depending upon the wealth of the population, and
geographic characteristics, the transport function of some services and to varying degrees they
now mostly carry tourists.
European Sleeper and Motorail Services

European railways continue to operate extensive overnight sleeper services between major cities.
Most routes are operated with sleeping cars built before 1970, with a washbasin and running hot
water in each cabin, and shared toilets at the end of each car.
Spain, Germany, Austria, and Sweden have introduced new sleeper cars on certain routes, with
private toilets and showers in each compartment.
Motorail services, with private cars carried on the train, operate on more than 100 routes especially
in the summer. These are used mostly by Europeans travelling south for their holidays. For a holiday
more than 2 weeks in length, it can be cheaper to bring a car than to hire one.
USA Long Haul

Until the 1950s, the USA had very extensive passenger railway services. Most were built and operated
by private companies for profit.
With the growth of air travel, and improvements to the roads, long distance railway services lost
passengers. They tried to compete by offering improved accommodation, including reclining sleeper
seats (similar to First Class airline seats, with more space and leg rests), 2 and 4 person sleeper berths,
and 2 person cabins sometimes with private toilets and showers. They also introduced glass-roofed
observation cars, and promoted their services as a tourist adventure as well as a way to travel
across the country.
However, the railways still moved into losses and were mostly taken over by the Government.
Services were greatly reduced in the 1970s and 1980s.10 However, some routes have found a new role
as tourist destinations. For tourists, these trains are a hotel, a sightseeing tour, and a restaurant all in
one.
AMTRAK is still run as a government department. There has been some investment in new trains
and new marketing and reservations systems. However, it makes substantial losses due partly to
inefficient operation and restrictions. For political reasons AMTRAK must still attempt to serve
transport markets, making frequent stops
and operating with inflexible workforces
not always well trained in customer service.
There is currently a debate in the USA as to
whether to maintain AMTRAK in its
current form, or whether to break it up or
privatise it.
South Africa Special Cars

South African Railways operates a network
of sleeper trains linking major cities. These
are now branded Shosholoza Meyl - A
Pleasant Experience. They serve mostly
budget travellers.
Most journeys are overnight, the longest
being Pretoria Johannesburg. Trains have
two tier cabins (2 and 4 bed) and 3 tier
cabins (3 and 6 bed). There are shared
Figure 14 Coach Class on the Indian Pacific, Australia.

Most passengers are young travellers and students
10 Note that there are some intercity services, mostly in the northeastern USA and eastern Canada, which do
continue to compete with airlines.
HARRAL WINNER THOMPSON SHARP LAWRENCE, INC
Page 45
toilets at the end of each car. Most two-tier cars also have showers.
Typical fares are:
Johannesburg Durban 722km $14 (3 tier) to $21 (2 tier).
Pretoria Capetown 1,600km $30 (3 tier) to $45 (2 tier).
There are air-conditioned restaurant cars on most trains.
Recently, South African railway have introduced Premier Classe, which is aimed more up-market
and at domestic tourists. They describe it as follows:
For the more selective travellers Shosholoza Meyl now offers Premier Classe
accommodation. The Premier Classe is a unique way to experience the Africa of
a bygone era. An era of gracious living and timeless elegance.
The Premier Classe coaches are connected to the Pretoria to Cape Town
scheduled service. It leaves Pretoria and travels via Johannesburg every Thursday
and returns from Cape Town every Tuesday.
Fare is $120 per person, based on two persons sharing a cabin. This is about 4 times the fare for
regular services, but only 15% of the fare on the luxury Blue Train, a luxury cruise train described
below.
Long Haul Australia

Great Southern Railway was formed in 1997 by GB Railways to privatise three long distance services
operated by the Australian National (Government) railways. Like VIA and AMTRAK, these routes
were originally established for a transport function but air travel is now faster and often also cheaper.
The longest route is the Indian Pacific, which runs twice each week over 4,000 km between Perth on
the Indian Ocean and Sydney on the Pacific Ocean. It has the longest straight section of track in the
world, over 400km without any curve or gradient. Most of the route is across desert, similar to
western Uzbekistan.
In Government ownership, the Australian rail services lost money, for many of the same reasons as
AMTRAK and VIA. GSR upgraded facilities, retrained staff, modified and extended timings and
routes, and actively marketed the trains through the travel industry. GSR is now profitable.11
GSR owns a fleet of 150 passenger
coaches, and employs about 300 staff to
provide services on trains and at
stations. More than 90% of passengers
are tourists, although there is still some
use as a transport service between
Melbourne and Adelaide. Great
Southern Railway offers reclining
sleeper seats, and cabins without and
with private toilet and shower. Seats are
popular with budget travellers, especially
backpackers. The most popular and
profitable class is the cabins with private
toilet. There is a small market for the
sleepers without private toilets, and
GSR is unable to make use of all its cars
of this type even when the other classes
are fully used.
Figure 15
First Class on the "Indian Pacific"
Note that Australia has some other long distance routes that remain in ownership of the State governments.
Overnight trains between Sydney and Melbourne are operated by the State Government of New South Wales,
while trains within Queensland are operated by the Queensland Government Railways. There is also a weekly,
luxury train service on the Queensland coast operated by a joint venture.
11
Page 46
Figure 16
Australian Sleeper Cabin Plans
Daytime as Seats
Night as berths
Each compartment has private toilet/washbasin/shower in a single cubicle. The basin and toilet
fold out from the wall unit.
GSR pays commercial rates for access to the track running through four different states. In the State
of Western Australia, the track is owned by the State but operated under a long lease by West Rail
Limited, which is controlled by Genesee & Wyoming Railway, a company traded on the USA
NASDAQ stock exchange. In South Australia, the track is owned by the national (Commonwealth of
Australia) government, which operates the track through a Government agency Australian Rail
Track Corporation. In Victoria, the track is owned by the State but operated under a long lease by
Freight Victoria, another private company associated with Rail America, which is also traded on the
USA NASDAQ stock exchange. In New South Wales, the State government owns the track and
operates it directly, although some track maintenance activities are provided by private contractors.
Page 47
GSR hires locomotive haulage from National Rail Corporation, a company which operates mostly
long-distance freight trains. National Rail was privatised in 2001. 12
Luxury Trains and Cruise Trains

Several train services have been established as luxury tourist experiences. They are not operated as
part of national or local rail transport systems, and tickets are not usually sold directly by the railway
companies.
Venice-Simplon Orient Express

The most famous and probably most profitable is the Venice Simplon Orient Express (VSOE). This
operates every week from March to September. Most trips are between London and Venice, but
some trips now also run via Prague and Vienna, and beyond Venice to Rome. A few trips operate to
Istanbul. See www.orient-express.co.uk
The Orient Express uses rolling stock built in the 1920s, some of which originally operated on the
London Paris Istanbul route. The cars have been restored to a high standard. Accommodation is
in cabins usually with an upper and lower bunk, which converts to seats, and a washbasin with hot
and cold water.
Passengers are offered a super-luxury level of on-board service, with waiters wearing tuxedos and
serving champagne and lobster. Passengers pay about $2,000 each for a 36 hour journey across
France and Italy. Return tickets are offered at about 150% of the one-way fare. The Orient Express
attracts about 13,000 passengers each year, with revenues of about $20 million. Operating cost
information is confidential, but is estimated at about $15 million. This train operates within the
densest and most valuable tourist market in the world, attracting passengers from England but also
from America and other countries who are prepared to pay a very high price for a unique travel
experience. Many Orient Express passengers travel from London to Venice, stay one night in
Venice, and then fly straight back to London. For these passengers the rail journey is more important
than the destination.
Other VSOE services

VSOE has established similar luxury rail
services linking Bangkok and Singapore, the
Eastern & Oriental; and along the coast of
Queensland Australia, the Great South
Pacific Express. VSO has also acquired the
Cuzco Macchu Picchu and Cuzco Lake
Titicaca railways in Peru, which it is
developing for the tourist market.
Blue Train
A standard of service similar to the Orient
Express is offered on the Blue Train, which
is operated by the South Africa railways. It
runs weekly between Cape Town and Pretoria,
with some trains running through to Victoria
Falls. See www.bluetrain.co.za
Figure 17 Dinner on the Blue Train, South Africa
National Rail does not have a monopoly in the locomotive haulage business, and faces competition from the
freight operating divisions of Freight Victoria and WestRail, and also from at least three (3) other freight
operators who do not operate any track.
12
Page 48
The Blue Train uses steel cars, which are believed date from the 1950s and 1960s, but have been
recently refurbished. Most sleeping compartments include private showers or private baths. Fares are
$660 to $990 per person for the 28 hour journey between Cape Town and Pretoria, including all
meals.
Al Andalus Spain
Spanish National Railways operates a cruise trains following a 7 day itinerary between Seville,
Granada and Cordoba, with daytime stops and sightseeing tours. Some of the coaches were
originally built in the 1920s, for use by the British royal family. Cars are described as having state of
the art toilet and shower facilities.
Most nights are spent on the train, but hotels are also used
Fares are about $2,000 for the seven day tour, including most meals and sightseeing excursions.
Nostalgie Orient Express
Lernidee Reisen of Germany operates several trips per year over the Trans-Siberian railway,
sometimes via Uzbeksitan. They use special rolling stock furnished in a historic style. Fares are
about $4,500 per person for a 16 day tour, including meals and side trips. See www.lernidee-reisen.de
Hotel on Wheels India

Indian Railways have begun a new service with special trains operating between major tourist centres.
Trains operate mostly in the daytime, with meals on board. Passengers sleep in hotels at major tourist
centres.
Cruise Trains in Uzbekistan

Sairam Tours, based in Tashkent, expects to operate six charter trips in 2003, from Tashkent to
Kirgizstan and then via Samarkand and Bukhara to Urgench, using trains hired from UZDs.
Preserved Railways
There are numerous small, private, profitable tourist train operations. Typically, these operate roundtrip daytime journeys over short sections of railway with remarkable scenery. Often, steam
locomotives are used to add to the tourist effect. A few examples follow:
The White Pass and
Yukon Railway
operates every day
through the summer
from the port of
Skagway, Alaska to
White Pass, a distance
of 44km. It is used
mostly by tourists
arriving on cruise
ships. Fare is about
$80 per person.
Figure 18
White Pass & Yukon, Canada and Alaska
The Mount
Washington Cog
Railway in New
Hampshire, USA,
charges $44 for a 5km journey. Some trips are steam operated.
The Napa Valley Railway operates the Wine Train over a 31 km route in California. Return
fare is $85, however most passengers purchase packages including meals for $110.
Page 49
The Jungfraubahn operates 9km from Kleine Scheidegg in Switzerland to the summit of the
Jungraujoch, at an elevation of more than 3,000 metres. The fare is approximately $20 per
person.
Page 50
Rail Travel Websites

www.gsr.com.au
Information and on-line booking for Australias long distance tourist trains. Try booking two places
on the Indian Pacific from Perth to Sydney, in Gold Kangaroo Class.
www.thetrainline.com
Timetable information and on-line booking for more than 1,000 daily train services in Great Britain.
Wide range of discount fares available. Try booking two seats from London to Hull. To get fares
information, you will need to register.
www.angliarailways.co.uk
Detailed information and limited on-line booking for one of Britains intercity and regional rail
companies.
www.sbb.ch
Timetables and on-line booking for Swiss railways. Includes train services into Italy and Austria.
www.eurostar.co.uk
Information and online booking from London to Paris, Brussels, and other destinations.
www.amtrak.com
Information and online booking for long distance train services in the USA. Includes various special
discount and promotional tickets, some only available for purchase on the internet.
www.vjv.com
Voyages Jules Verne, an travel agency specialising in exotic holidays including the Venice Simplon
Orient Express and the Al Andalus.
www.orient-express.com
Information and on-line booking for the various luxury trains and hotels operated by Orient
Express.
www.whitepassrailroad.com
Information about the tourist railway in Canada/Alaska
www.rhb.ch
Information about the Swiss mountain railways including the Glacier Express.
www.royalindiantrains.com
Royal Indian Trains, agents for the Palace on Wheels excursion trains.
Page 51

Rail Tourism Strategies For Uzbekistan Railways

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RAIL TOURISM

HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

TRAIN TIMES ............................................................................................22

INVITATION FOR JV PARTNERS...........................................................25

DETAILED SURVEY REPORT.................................................................27

INTERNATIONAL RAIL TOURISM MODELS...................................... 41

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

SUMMARY AND CONCLUSIONS

Figure 1 Uzbekistan Railways

This report examines

if it attracts only one additional passenger per day.

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

Figure 2 The Registan in Samarkand

77% were on holiday, 23% on business

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

Figure 3 KhivaCity Walls

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

EXISTING RAIL SERVICES

SCHEDULED PASSENGER SERVICES

Departure Arrival times

Tashkent Samarkand Bukhara

19h 07h (12 hours)

Tahskent Samarkand Termez

16h 12h (20 hours)

Tashkent Fergana Valley

3 trips per week

18h 12h (18 hours)

Tashkent Samarkand Urgench (Khiva)

4 trips per week

17h 18h (25 hours)

Figure 4 Restaurant car and two -berth passenger coupe

Food and Drink

Marketing and Distribution

Figure 6 Samarkand Station

Figure 7 UZD Train near G'allaoroi. Photo: John Armistead

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

CHARTER TRAINS AND COACHES

9.739 cym / passenger -km

60,000 cym /day x 5 days

910 cym / person x 2

Tashkent Bukhara Samarkand Tashkent

13.08 cym / passenger -km

30,000 cym /day x 4 days

330 cym / person

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

Domestic in chartered trains or

However, for some customers the

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

POTENTIAL FOR RAIL TOURISM

SCOPE AND TARGET MARKET

Figure 9 Bukhara Medressa and the Ark Fortress

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

Rail travel can be preferred for several reasons:

CURRENT TOURIST TRAFFIC

TRAVEL INDUSTRY IMPRESSIONS

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC

TOURIST SURVEY FINDINGS

10% (of all respondents).

Did not know there was a train

Nobody will want

INITIAL ASSESSMENT OF OPPORTUNITIES

/ HARRAL WINNER THOMPSON SHARP LAWRENCE, INC