B.C. Ferries is proposing a major reworking of its fare system and an overall software upgrade that would let passengers book travel in advance without having to pay a reservation fee, with the option offered first on Vancouver Island-Vancouver routes.

Similar to what we see in the airline industry, customers would be able to buy discounted fares for off-peak travel times and be able to book in advance for free, B.C. Ferries announced today. Initiatives will be phased in under the scenario that would see passengers make more online bookings and have the ability to compare fare prices.

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An enhanced travel card is also proposed. Frequent customers would see special offers based on their travel habits.

If the wide-ranging proposal to modernize the fare system and upgrade digital services is approved by the B.C. Ferries Commissioner, the initiative would start in 2017.

“B.C. Ferries has heard from our customers that they want more flexibility in how they book travel in the future, more certainty at the terminal that they will be able to board the sailing they want, and more opportunities for discounted fares,” Mike Corrigan, B.C. Ferries’ president and chief executive officer, said in a statement.

“We plan to invest in information technology and e-commerce systems that will meet those goals while incrementally increasing traffic and keeping fares lower than they would be under the current business model.”

Critics have blasted B.C. Ferries for continuing fare hikes and recently introduced service cuts that they say resulted in the loss of millions of potential passengers and has harmed B.C.’s tourism industry. Fewer trips hurt coastal communities dependent on these services, they say.

The B.C. Ferry Commission is asking for public comments on the proposals by the end of December.

B.C. Ferries’ 55-page application to the commissioner states: “This strategy envisages a change to the current business model on reserveable routes. Today, customers purchase their fare on departure, and some guarantee their space by paying an additional reservation fee in advance.

“In the future, customers will be able to pay the full applicable fare in advance, without paying a separate reservation fee, and will have access to discounted fares subject to availability.”

The plan could increase traffic by three to five percent and generate a positive “net present value” ranging from $10.5 million to $33.5 million over a 13-year period, or 10 years from when it comes into effect, B.C. Ferries said. NPV is the difference between present value of incoming cash and outgoing cash and is used to evaluate the profitability of an enterprise.

B.C. Ferries says its Fare Flexibility and Revenue Management Strategy and the Digital Experience Strategy would modernize the way it sets pricing, sells travel, and manages capacity utilization of sailings.

Shorter waiting times, improved customer service, and operational efficiencies are all anticipated, B.C. Ferries said.

These initiatives would “drive significant increases in traffic, online/self-serve transaction volumes and revenues, while improving the overall customer experience,” the application states.

New digital technology with an easy-to-understand website would be necessary to introduce proposed initiatives. The current website is outdated, rigid and inflexible, and cannot support the new strategies . A “new web platform will provide commercial strength, multichannel, secure e-commerce software that will offer an intuitive purchase experience through a device of the customer’s choosing – mobile, tablet or computer,” B.C. Ferries said.

B.C. Ferries would be better able to match its capacity with customer demand, thus reducing the number of extra sailings that are put on as another cost-cutter, it said.

Beefing up its e-commerce web offerings is expected to bring in more money for the organization. B.C. Ferries predicts that the website would handle more than 70 per cent of all fare revenue on certain routes.

In the 2014 fiscal year, the current website had an average of 505,000 unique visitors every month and more than 1.4 million total visits each month, it said. “However, online revenue totalled $10.3 million, accounting for only 1.8 percent of total B.C. Ferries tariff revenues.” Compare that to the airline industry, which sells more than 98 per cent of its passengers online, the report said.

The favoured digital package consisting of a full software upgrade would generate more revenue through higher traffic levels and an increase in onboard spending, the application said.

cjwilson@timescolonist.com

To view the application: http://www.bcferrycommission.com/reports-press/whats-new/opportunity-to-comment-on-bc-ferries-proposed-fare-flexibility-and-digital-experience-initiative/