KPMG Peat Marwick was selected to develop a ridership demand model for the SEHSR market. This model was created out of the travel demand model developed for a Southeastern High Speed Rail Study. KPMG surveyed thousands of auto, air, bus and rail travelers to find their stated and revealed preferences. These surveys, along with population and other socio-economic data, were then used to determine travel patterns of those located along the Southeast High Speed Rail corridor. The model estimates current demand and projects future travel between cities along the SEHSR as well as along the entire Atlantic Coast for all modes.

Ridership and revenue forecasts for the SEHSR were developed using a five step approach consisting of the following:

• Designation of a study area zone system
• Assembly of travel data describing existing travel volumes by mode and purpose
• Development of service data describing the characteristics of all competing modes
• Creation of future service level scenarios
• Development of a computer based demand model

The ridership and revenue study was broken into two phases. Phase I assumed high speed improvements along the SEHSR only from Raleigh to Charlotte. Phase II of the ridership study determined the increases in ridership and revenue due to a fully operational Northeast and Southeast high speed corridor running from Boston, MA to Charlotte, NC. This chapter summarizes the phase II (full corridor implementation) findings.

9.1 BASE MARKET CONDITIONS AND FUTURE GROWTH

KPMG used the extensive travel survey data collected with its Southeast High Speed Rail study. The study zone consisted primarily of counties that were served by Amtrak's Carolinian and Piedmont trains; that is, from Charlotte to Washington, DC.

KPMG primarily studied the effects of high speed rail on zones in North Carolina. These are the counties of Mecklenburg, Cabarrus, Rowan, Davidson, Forsyth, Guilford, Alamance, Orange, Durham and Wake -- also known as the "Piedmont Crescent." Annual NC intra-state person trips along the Piedmont Crescent between the Triangle (Raleigh-Durham-Chapel Hill metropolitan area) and the Triad (Winston-Salem/Greensboro/High Point metropolitan area) were almost 1.2 million in 1995. Between the Triangle and Charlotte there were over 900,000 person trips and nearly one million person trips between Charlotte and the Triad in 1995. Most of these trips were for personal business and other discretionary travel. The next largest category was business trips, followed by recreation trips, which made up less than 25 percent of all trips within the Crescent. Based upon current trends and experience along the high speed corridor between New York and Washington, DC, business travel will continue to increase faster than other modes for rail. Meeting the requirements of business travelers therefore should be a high priority as rail service improves.

Travel along the Piedmont Crescent will grow at a high rate over the next 20 years as population and employment grow along the corridor. While population and employment will grow in North Carolina by 24 and 31 percent respectively, the growth rate will be 32 percent for population and 40 percent for employment for those counties along the Piedmont Crescent.

9.2 RAIL SCENARIOS AND TEST PROJECTIONS

Future rail service level scenarios were developed in close coordination with Amtrak and NCDOT. In total six service levels were established in addition to the existing ("base") service along the SEHSR. Each scenario tested a unique combination of travel time, frequency and fares. Scenario 1 represents improved running time to a maximum of 79 mph along the corridor. 100-110 mph ruling speeds represent an approximate Raleigh to Charlotte schedule of just over two hours and a Raleigh to Washington, DC schedule of 3 hours 15 minutes. Scenarios 2 through 6 assume that at least two round trip (RT) trains continue north to New York. In addition to improved speed and frequency, two distinct fare levels are tested. "Existing" fares represent the current Amtrak fare structure of around 11 cents per passenger mile. "Enhanced" fares (a 42 percent increase over existing fares) would mean a fare of around 17 cents per passenger mile. Table 9-1 illustrates the ridership and revenue results from the model, with a margin of error of 10 percent.

Results from this study show that, if the states of Virginia and North Carolina were to decrease the time between Raleigh and Washington to around three hours, ridership and revenue will increase dramatically along the SEHSR. The faster speeds, however, have a much more dramatic effect on revenue than on ridership. For example, increasing speed on the corridor to 100 mph and adding frequencies increases ridership by over 300 percent, but increases revenue by over 600 percent with enhanced fares. Since the SEHSR should be a commercially successful as possible, high speed service between Raleigh and Washington, DC is extremely important to the success of the corridor in North Carolina.

Table 9-1: Projected Rail Service Scenarios Ridership & Revenues (Year 2015)

Scenarios	Base Scenario	Scenario 1	Scenario 2
	Existing Speed Existing Frequency Existing Fares	79 mph Existing Frequency Existing Fares	100 mph 4 RT Frequency Existing Fares
Ridership
NC Corridor**	134,500	164,600	189,000
NC-NEC/VA†	176,600	320,800	367,700
TOTAL	311,100	485,400	556,700
Revenue
NC Corridor**	$1,699,000	$2,085,700	$2,394,800
NC-NEC/VA†	$8,834,000	$15,903,800	$18,217,200
TOTAL	$10,533,000	$17,989,500	$20,612,000
Scenarios	Scenario 3	Scenario 4	Scenario 5	Scenario 6
	100 mph 6 RT Frequency Existing Fares	100 mph 6 RT Frequency Enhanced Fares	100 mph 8 RT Frequency Existing Fares	100 mph 8 RT Frequency Enhanced Fares
Ridership
NC Corridor**	429,500	399,600	475,800	430,000
NC-NEC/VA†	742,800	639,500	849,700	749,500
TOTAL	1,172,300	1,039,100	1,325,500	1,179,500
Revenue
NC Corridor**	$5,827,400	$9,319,900	$6,430,800	$10,128,300
NC-NEC/VA†	$36,428,600	$54,835,200	$41,450,700	$64,039,800
TOTAL	$42,256,000	$64,155,100	$47,881,500	$74,168,100

* Existing Frequency is one round trip train between Raleigh and Charlotte and one round trip train from Charlotte to New York. In scenarios 2 through 6, half of all round trips continue beyond NC to New York.
** Trips within North Carolina only, including trips on Amtrak’s Crescent between Charlotte and Greensboro.
^† Trips between North Carolina and Virginia and between North Carolina and the Northeast Corridor, including Crescent trips between NC and the NEC/VA and Silver Star trips between Raleigh and the NEC/VA.

9.2.1 EFFECTS OF HIGH SPEED RAIL ON OTHER MODES

A majority of the travel caused by high speed rail will be "diverted" trips; i.e., are trips that otherwise would have been taken via automobile or air. Up to one third of all new travel, however, is from "induced" trips, or trips that otherwise would not have occurred. This shows that the SEHSR will not only reduce the use of busy highways and airports but will also provide travel alternatives that otherwise would not have been available.

9.3 SUMMARY AND RECOMMENDATIONS

Based upon the modeling completed, KPMG Peat Marwick, Amtrak and the State of North Carolina have the following conclusions and recommendations.

Increasing speeds to 100 mph and adding frequencies increases ridership by over 300 percent and revenue by over 600 percent with enhanced fares. Rail ridership would increase dramatically if speeds were increased and travel time reduced along the Southeast High Speed Rail corridor. This indicates that even a non-electrified corridor with speeds between 95 and 110 mph can carry significant numbers of passengers.

Changes in revenue do not always mirror changes in ridership. Scenario 5 has the highest ridership, yet Scenario 6 has the highest revenue. If the objective is to maximize ridership, then lower fares and a high level of service will bring the desired result. If the objective is to maximize revenue, then enhanced fares should be used.

High speed rail has a high level of induced travel. HSR will not only help ease congestion on highways and airports. The study shows that increasing speeds and frequencies along the SEHSR allow people to make trips that they otherwise would not make. This phenomenon, known as "induced travel" shows that a benefit to high speed rail is the increased capacity to the overall transportation network and the increased ability for people to travel.