Passenger Trains > A dining car question

Back when railroads operated their own passenger trains in the years before Amtrak, were the dining cars expected to turn a profit?  Or were losses just accepted as part of the cost of doing business and building a brand?

pennsy3750 Wrote:
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> Back when railroads operated their own passenger
> trains in the years before Amtrak, were the dining
> cars expected to turn a profit?  Or were losses
> just accepted as part of the cost of doing
> business and building a brand?

I think some viewed the dining cars was a way to influence businessmen to route freight their way.

Money maker - no.

I believe you are correct.   Further, the quality of the food service often influenced the choice of RRif two or more connected the same destinations.  

BrynMawr Wrote:
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> I believe you are correct.   Further, the
> quality of the food service often influenced the
> choice of RRif two or more connected the same
> destinations.  

Thank you for your support on this question.

During the time of ICC regulation, the rate was generally the same (for the same type of lading) between two points for all routes, so railroads could not compete on price in most instances. They had to find other ways to get their share of the traffic. Sometimes service or equipment made the difference, but the overall impression could be the determinant.

I've seen the term "loss leader" applied to the dining cars.  They were known to be losers to the the
bottom line, but an attraction to pull in more passengers to ride the trains.

Amtrak seems to have gone the other way.

Before airline travel became common, big freight shippers
had to travel by train. They naturally equated the railroads 
handling of passengers with their handling of freight.

 

The New Haven was the only railroad that had a profitable dining car service.   This was because of profits from bar cars in the New York commuter zone as well as alcohol consumption on the classy "Merchants Limited" which ran between New York and Boston with a dining car and several parlor cars.  The train departed both New York and Boston at 5:00pm which was classic cocktail time.

raytc1944 Wrote:
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> The New Haven was the only railroad that had a
> profitable dining car service.   This was because
> of profits from bar cars in the New York commuter
> zone as well as alcohol consumption on the classy
> "Merchants Limited" which ran between New York and
> Boston with a dining car and several parlor cars.
>  The train departed both New York and Boston at
> 5:00pm which was classic cocktail time.

Yes, it did, and I was an occasional embiber in those parlor cars.  Finished my second one as
we arrived in New Haven, the first stop.

Also, I believe a greater percentage of New Haven passengers used dining car services than was "typical" on other railroads.  I remember a New York to Boston trip in 1966 and the dining car was mostly full the entire trip (lunch).

 
raytc1944 Wrote:
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> The New Haven was the only railroad that had a
> profitable dining car service.   This was because
> of profits from bar cars in the New York commuter
> zone as well as alcohol consumption on the classy
> "Merchants Limited" which ran between New York and
> Boston with a dining car and several parlor cars.
>  The train departed both New York and Boston at
> 5:00pm which was classic cocktail time.

raytc1944 Wrote:
-------------------------------------------------------
> The New Haven was the only railroad that had a
> profitable dining car service.   This was because
> of profits from bar cars in the New York commuter
> zone as well as alcohol consumption on the classy
> "Merchants Limited" which ran between New York and
> Boston with a dining car and several parlor cars.
>  The train departed both New York and Boston at
> 5:00pm which was classic cocktail time.
I'd have to dispute this statement that the dining car was profitable by itself.  My reason is this:  you have to remember that the upkeep on any passenger car is basically the same and a diner has more upkeep because of all the things in the kitchen.  By itself just selling food and having the large crew to handle the cooking, the serving, the clean up, etc. is expensive.  I will agree that bar cars serving alcohol beverages can be very profitable as with most major restaurants, they make a lot of their profits from the beverages they sell.
As I stated on the other thread below, a dinning car is expensive period and the only food service cars that can possibly make a profit are cars like Food Bar Coaches where the railroad can sell revenue coach seats and then sell some food as extra revenue.
John in White Marsh, Maryland

The New Haven RR probably made money on the diner in the Out of Towners movie!  LOL!

ts1457 Wrote:
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> I think some viewed the dining cars was a way to
> influence businessmen to route freight their way.
>
> Money maker - no.

ts1457, you are most certainly correct.

According to the Preface of "Dinner in the Diner" by
Will Hollister, a great reference for anyone interested
in dining on the rails, Harry A. De Butts, President of
the Southern Railway in the early 1950s to mid 1960s
once said, " There is no way you can lose or pick up
freight customers so fast as by the quality of the meal
or cup of coffee that you provide the traveler" (pg.12)

SR2

 

> were the dining
> cars expected to turn a profit?

Conventional wisdom: there was never
any hope of a dining car turning a profit
on food, on any railroad in the US.

timz Wrote:
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> > were the dining
> > cars expected to turn a profit?
>
> Conventional wisdom: there was never
> any hope of a dining car turning a profit
> on food, on any railroad in the US.

I do not believe that any railroad or Amtrak ever tried to sub-contract the service.  Given the food truck revolution (Sodexo et al even run them now) it would be trivial for Amtrak to bid out the franchise.  I am certain that they could actually get someome to pay them to operate the service for at least the first round.  At that point, freed from union wages and all of Amtrak's overhead, it would be able to see if dining cars can be profitable or not.  Even if they aren't profitable, there are likely quite a few operators that could think they have the secret sauce and keep paying Amtrak for the privilage to loose money. 

Generally, the diners were just considered business overhead. When railroads were obliged to run passenger trains, people would have to be fed. However, the head of food service on on dining car operation told me that there was about 66% in every hard drink sold. And that it was such good business it covered the loss on food service. 

If the bar cars are so profitable then why did Metro North retire them?

They got a new fleet of MU cars and could not justify the publicly financed capital expense of buying new ones at $3 million each. 

Sp1110 Wrote:
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> If the bar cars are so profitable then why did
> Metro North retire them?

Because of the up front expense of purchasing a handful of M8 bar cars.  I'm also sure the whole concept had some management opposed to it due to liability and passenger behavior issues. 

mbrotzman Wrote:
> I am certain that they could actually
> get someome to pay them to operate the service for
> at least the first round.  At that point, freed
> from union wages and all of Amtrak's overhead, it
> would be able to see if dining cars can be
> profitable or not.  Even if they aren't
> profitable, there are likely quite a few operators
> that could think they have the secret sauce and
> keep paying Amtrak for the privilage to loose
> money. 

Boy, I'd love to know who or what enterprise would PAY Amtrak to operate diners. Your math is backwards - assuming Amtrak could contract out that work (I don't know the labor contract as to it's POV on outsourcing), you probably would find several groups that might bid the work. Those bids would be inherently expensive given labor costs, food costs, etc. Where there is some potential money to be made would be a for purchase model, but even that is tenuous at best. 

On the ATSF every dining car was on the food cost percentage system.  Every steward and chef did close accounting of their revenue; how much food was served; how much was condemned (spoiled, out-of-date, etc.); how much was served to employees.  The dining car department looked at these numbers carefully.  They watched the passenger numbers on all trains, and only used enough employees to serve them.  We had "swing" waiters and cooks out of Chicago on #15-16 at FTW.  We were accountable for the dining car that we operated.