Tuesday, January 29, 2013

Heathrow Notes

We flew from Barcelona to London today and observed a number of things in the process of getting from our plane to our hotel near Paddington.

1. Non EU passengers are required to show their passports, although it is not entirely clear what purpose that accomplishes. The line for doing so took about half an hour to get through. My rough estimate, based on two different calculations (one from the number of people in the line, one from the rate at which they were being processed), was that the line used up about fifty person hours per hour. Assuming that’s the average for twenty hours or so a day, it comes to a thousand person hours a day. Valuing the average traveler’s time at ten dollars an hour, that is ten thousand dollars a day worth of waiting time. To be fair, many of those people, including us, have checked luggage, so some of the time would be spent waiting for luggage if it was not spent waiting to have someone glance at their passports, so call it five thousand dollars a day of wasted time. The airport functions 365 days a year, so upwards of a million and a half dollars a year.

Eliminating that waste would not require more person hours of checking, since  in any case they have to check everyone’s passport. It would require the airport to put more people on at busy times, fewer when not many passengers are coming through. I find it hard to believe that the cost of such an arrangement would come to anything close to the value of the time saved.

2. There are three ways of getting from Heathrow to Paddington station. The very slow (and inexpensive) way is by tube and takes an hour or so. The very fast (and expensive) way is the Heathrow Express. The intermediate solution is Heathrow Connect, which takes about half an hour to make the trip—fifteen minutes longer than the express—and costs about ten pounds less. No doubt there are passengers who are happy to pay ten pounds to save fifteen minutes, but I suspect they are in the minority.

Coming through the airport, there are lots of signs for the Heathrow Express, none or almost none for the Connect. The ticket machines that sell tickets for both are labelled “Heathrow Express,” although when you use them they give you a choice. Only by speaking to an airport staff person did we discover that in order to get to the Connect from Terminal 5, where we came in, we had to take the Express (at no cost) to Terminals 1-3 and transfer there to the Connect.

The Express was about one tenth full when it departed for Paddington. I think it is pretty clear that those responsible are doing their best to get people to use it instead of the much less expensive and only slightly slower alternative. The Express runs more frequently than the Connect, every fifteen minutes instead of every half hour, which saves some additional time—but that is a decision made by those running it, and presumably part of the reason it runs mostly empty.

My calculations on the passport line assumed that passengers valued their time at ten dollars an hour. If we figure that the Express saves fifteen minutes of travel time and, on average, seven and a half minutes of waiting, the total saving is worth about four dollars and costs about sixteen. One could make the tradeoff look better by assuming a higher value for time, but that would make the passport line look correspondingly worse.

The common element that explains both observations is that decisions on running the airport are being made by people who put very little value on either the time or the money of the airport’s customers.

To close a negative post with a little sunshine, Barcelona was well worth visiting. Our hotel was somewhat less expensive than the one we are going to in London and somewhat nicer. The food was reasonable and tasty. The old cathedral is a lovely medieval building; the adjacent cloister has been crossbred with a cathedral interior and the combination works. Much of the city architecture is nineteenth century gothic, obviously inspired by surviving real gothic buildings and very attractive. The weather was pleasant. The one disappointment was that the permanent exhibit of the Maritime Museum was closed—it’s apparently being redone—so I didn’t get to see the replica of the galley in which Don John of Austria won the battle of Lepanto.

Obviously  I will have to come back.

17 Comments:

At 8:31 AM, January 29, 2013, Anonymous Anonymous said...

No offence, but I think that you need to get out a bit more. Too much analysing, not enough enjoying

 
At 8:32 AM, January 29, 2013, Blogger David Friedman said...

I enjoy analyzing.

 
At 8:54 AM, January 29, 2013, Blogger lelnet said...

I would assume that the valuation of the users' time is going to be more accurate by the folks providing transportation than the folks processing passports.

After all, using their transport services is entirely optional. You can take the tube. Or a taxi. Or a car service. Or rent a car. Or make internet friends with a Londoner who you think can be relied on to come and pick you up. If you are genuinely unhappy with the official airport transit options, you can decline to use them, is the point.

Decline to use the passport line, on the other hand, and your only alternative is to forego whatever purpose brought you to England (either because you don't go to England, or because you do go, but you rush past passport control, get arrested, and go to prison, which presumably would preclude proceeding with your planned itinerary, whatever that might be).

Even when run by the government, services which have effective private-sector substitutes tend to at least seriously consider the needs and desires of their users. Those which have no substitutes, on the other hand, tend not to.

 
At 11:08 AM, January 29, 2013, Blogger Lucilyn labajo said...

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At 4:48 PM, January 29, 2013, Anonymous Norm said...

It is possible that the unions have tied up the management by requiring pay for a full shift even if someone works a short shift. If true keeping staff numbers reasonaable would force them to spread the pain to the public in the form of waiting. My limited understanding of public transportation is that part of the reason I see so many empty (sometimes literally, other times with one or two passengers) buses is that drivers are paid certain minimums for showing up at all and there is no marginal labor cost for them to drive a few hours longer.

A similar situation occurs when roads are torn up. It appears that those doing the work do not value the public's time at all. If they did there would be larger crews or tighter scheduling, both probably increasing costs only slightly.

I believe part of the reason for these things is that only a small percentage of people (I guess less than 10%) enjoy analyzing as illustrated by the first two comments. I spent 12 years on a school board and the culture of that organization was not to analyze or estimate inconveniences quantitatively (lots of anecdotal remarks though). I and at times another tried to impart more of this kind of thinking but we didn't succeed.

 
At 10:24 PM, January 29, 2013, Anonymous William H. Stoddard said...

They have a replica of Don John's galley? Cool! I read Chesterton's long poem about that battle in my teens and it made a lasting impression on me as narrative; in fact I think it might have helped prepare me to appreciate the battle scenes in The Lord of the Rings.

 
At 3:13 AM, January 30, 2013, Blogger David Friedman said...

I owe my love for Chesterton's "Lepanto" to Frank Meyer, who recited it to me forty-some years ago. At this point I think two of my children know the poem by heart, probably a little better than I do.

 
At 8:28 AM, January 30, 2013, Blogger Gallé said...

Good post, Mr Friedman, I rarely see articles or posts about the cost of interacting with the state. People usually assume the cost is in the taxes paid, forgetting that it takes several working days per citizen to interact with the state, mostly for matters that are really just about data processing.

I've been looking at various solutions to this, one of them being that online companies would take on the role of interface between citizens and states.

Think of a Groupon for taxpayers, effectively. The interfacing company makes a deal with various states to enable its customers to get x number of services in return for y amount of tax.

Conditional in that deal would be that customers get to go through a line where the passport checking is done by machine processing customer data. If anything unusual shows up, the customer would be redirected to a human-to-human routine, where their passport and data are checked by passport control the way they are now.



 
At 9:56 AM, January 30, 2013, Anonymous Anonymous said...

I also enjoy reading David's analysis.

On a more mundane note, I don't travel much but did this last winter. I was informed at the hotel I stayed at in a major US city that hotels "do not offer free breakfast", which surprised me (previous hotels I've stayed at offered free breakfast). There was a snazzy looking restaurant on the first floor which might explain their decision not to offer a free one. Is it true in Europe that there are no gratis breakfasts at the hotels?

 
At 12:09 PM, January 30, 2013, Blogger Milhouse said...

Free breakfast at hotels is common at smaller, budget hotels, which do not have restaurants; it is never offered by the big "good" hotels where SF cons are held. Those hotels are geared to the business traveler on an expense account, and incorporate restaurants at which they expect you to have breakfast. The smaller budget hotels also often have laundry facilities; the bigger and expensive ones never do, and their concierges tend to have no idea where to find a nearby place with a reasonably priced service laundry. Nor do they usually know anything about how to get there by public transport. Also, the expensive hotels usually charge for WiFi, though this is becoming less common now, while the cheap hotels have offered free WiFi for years.

And no, it's not true in Europe. I've only stayed at one European hotel, which was not top of the range, and it did have a free breakfast. I know that in Israel (which is culturally more European than anything else) all the big hotels have free breakfast, and it's a huge spread that obviates any need for lunch! (Non-guests can also pay just for breakfast.)

 
At 5:50 PM, January 30, 2013, Blogger David Friedman said...

On this trip, we stayed at six different hotels in Europe—three budget hotels which we were paying for, three much fancier hotels provided by people I was giving talks for. Five of the six provided a free breakfast—a fairly simple English breakfast for the budget hotels in London, a very luxurious breakfast for the fancy hotels in Zurich, Milan, and Madrid. The one exception was a very nice budget hotel in Barcelona, where breakfast was 9 Euros. We preferred to get a few pastries elsewhere, so I don't know how good the hotel breakfast was.

My experience in the U.S. is that cheap motels have low quality free breakfasts while what I think of as middle level motels, such as Hampton Inn, have pretty good free breakfasts. I'm not sure what the pattern is for expensive hotels in the U.S.

So far as the reason, I've been told that free breakfasts became common as a result of changes in IRS rules which made it harder to deduct meals as expenses while still letting you deduct the cost of a hotel room. I don't know if that is correct or not.

I've long been puzzled over the pattern with regard to internet connectivity. Low and mid-level motels provide it for free, expensive hotels generally charge extra for it.

 
At 1:16 AM, January 31, 2013, Blogger Milhouse said...

There's nothing puzzling about it: the big hotels are geared to the businesss traveler on an expense account; their employers will gladly pay the $10 a day or whatever it is for them to get connected and productive, so why not charge? The hotels that are competing for customers who are paying their own way offer free WiFi because if they don't people will go elsewhere, and it's not as if it costs them very much.

 
At 3:15 AM, January 31, 2013, Blogger Tim Worstall said...

"Eliminating that waste would not require more person hours of checking, since in any case they have to check everyone’s passport. It would require the airport to put more people on at busy times, fewer when not many passengers are coming through. I find it hard to believe that the cost of such an arrangement would come to anything close to the value of the time saved."

This has been a political football just recently. I can't remember the exact details of how and why but it is something to do with the inability of public sector management and unions to get along. Or see the customer as being the person subject to the service rather than the people providing it.

As to the why of it at all: One of the sub-groups within the EU is "Schengen". The is passport free travel between certain countries. Yesterday I came back from the Czech Republic to Portugal via Germany. The airlines checked my passport, to see that I was indeed me as named on the ticket. But no one else.

The UK is not part of Schengen so all people crossing the border (EU citizens and UK alike) have to show their passport.

There's just a different queue for UK and EU and then another one for all non-EU.

 
At 11:16 AM, January 31, 2013, Blogger David Friedman said...

To Milhouse:

My guess is that many more business travelers stay at the mid-level hotels, were Wi-fi is free, than at the very expensive ones. And, in any case, "the consumer isn't price sensitive" doesn't explain why the hotel charges for internet connection instead of simply charging more for rooms.

At a slight tangent, I wonder what the effect will be on hotel practice of more and more people being able to connect to the internet at reasonable speed through their cell phones.

 
At 10:34 PM, February 02, 2013, Blogger Milhouse said...

The thing is that the people at big companies who approve and pay out on travelers' expense accounts aren't really price-insensitive. They'd like to cut down on expenses. It makes them look good, and they disapprove of waste. So a room price that's $20 cheaper sounds good to them. But if the traveler then spends $10 for internet access and $10 for breakfast, those seem reasonable. I mean, the guy needs to get online to do his work. And he needs to eat. So they'll approve that extra $20, while feeling good about having saved some money on the room.

 
At 4:35 PM, February 03, 2013, Blogger Blogowitz said...

Tim Harford looked at the question of internet in hotels a while back
http://www.slate.com/articles/arts/the_undercover_economist/2007/02/minibar_economics.single.html

The case of Express/Connect/Tube/car seems like it might be understood as well as price discrimination as indifference. Plenty of people who go in and out of Heathrow value their time at well over £10/hr. On average, between the greater frequency and shorter trip, you're saving 22.5 minutes per trip. (I make that trip a lot and generally take whichever one arrives first.)

Also, in defence of the UK Border Agency, they have an automatic eye-scanning entry gate for frequent travellers. It's a great system and suggests that they're not entirely indifferent to people's time (if maybe not as good about it as they might be).

 
At 1:49 PM, February 10, 2013, Blogger Michael said...

My parents (who are in their seventies, and have civil service pensions of the sort that nobody of my generation will have, and are therefore comfortably well off) stayed in a nice hotel in Malaysia recently, which did charge for internet access. My parents paid for internet access for one day, and were informed immediately by the staff of the hotel that the internet access would be complimentary for the remainder of this stay. Essentially the hotel staff figured out that they were the sorts of people who were paying for the hotel with their own money, and the charge for the internet was therefore waived.

As for passports, Britain has chosen to be outside the Schengen zone that has abolished such checks for most people in western Europe. They have done this for rather base political reasons. "We must be tough in our defence of our borders". It doesn't achieve anything, but it sounds good on the evening news, so they do it. It doesn't matter how much time it wasted or how much money it costs, because it isn't the politicians that are paying it.

The situations with trains is even worse from Gatwick airport. There are two train services from Gatwick airport to Victoria Station: the "Gatwick Express", and the regular "Southern" service. They take exactly the same route, except that the Southern Service (which costs about half the price) stops at about two extra stations and takes five minutes longer. All the signs at Gatwick Airport point you to the Gatwick Express. Londoners generally know about both services, and get the cheaper service, but foreigners who have just arrived are confused and often take the more expensive service. Or they buy a ticket for it and then get on the next train to Victoria, whichever service it might be. Ticket inspectors are used to this, and have the authority to exchange the wrong ticket for the correct one and adjust the fare. This leads to the slightly absurd situation in which passengers are told that they are on the wrong train and are therefore given half their money back after previously buying a ticket. (Regulation requires that any ticket machine sell all tickets for any train company - even ones that do not operate the ticket machine in question).

 

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