Final report of ITS Center project: Travel Virginia.

A Research Project Report

TRAVEL VIRGINIA

Disclaimer

The contents of this report reflect the views of the authors, who are responsible for the facts and the accuracy of the information presented herein. This document is disseminated under the sponsorship of the Department of Transportation, University Transportation Centers Program, in the interest of information exchange. The U.S. Government assumes no liability for the contents or use thereof.

Executive Summary

This report summarizes the results of a fifteen-month study to assess the feasibility of expanding Travel Shenandoah, a pilot rural ATIS service developed for Virginia’s Northern Shenandoah Valley, into a comprehensive, statewide service covering the entire Commonwealth of Virginia.

It describes the concept of an umbrella statewide service, made up of a series of independent, financially viable regional partnerships linked together through a single, central statewide travel information clearinghouse, and outlines the major lessons learned from the pilot Travel Shenandoah regional service that went live on April 26, 2000.

Using seven primary evaluation criteria, it is concluded that the concept of a statewide service is both feasible and potentially of considerable value both to the traveling public and to the Commonwealth of Virginia. The seven criteria include: institutional and legal issues, technical considerations, potential business models, financial feasibility, availability of data, user acceptance, and partnership interest.

A series of recommended Travel Virginia regions are described herein. The boundaries of these regions are determined by a combination of factors including the configuration of the highway system, local government boundaries, established VDOT Districts, State Police Divisions, Virginia Tourism Corporation and State Planning District Commission boundaries, as well as the areas served by local telephone and media companies.

Attention is directed to the major functional and technical issues associated with the implementation of a comprehensive statewide service, together with the legal, regulatory, and procurement requirements that must be met by VDOT and other agencies of the Commonwealth of Virginia in establishing any form of statewide traveler information service.

Based on this analysis, three broad organizational options are discussed as the basis for supporting implementation of a long-term, statewide service. Each option is evaluated against a common set of criteria and a recommended option is identified.

A proposed four-year implementation program is outlined. It discusses alternative business arrangements among regional partners, VDOT, and the central statewide Clearinghouse, and describes a recommended staged program of regional expansion. The program focuses initially on the completion of service along the entire length of the I-81 Corridor in Western Virginia, followed by the I-66 and Route 29 Corridors. These are followed, in turn, by provision of service to the I-64, I-95, and I-70 Corridors, and finally by service to the Coastal areas of Eastern Virginia, the Piedmont, and Southside Virginia.

Table of Contents

Executive Summary *

Table of Contents *

List of Figures *

List of Tables *

INTRODUCTION *

CHAPTER I THE CONCEPT OF TRAVEL VIRGINIA *

CHAPTER II TRAVEL SHENANDOAH: SOME LESSONS LEARNED *

CHAPTER III FEASIBILITY OF A STATEWIDE TRAVEL VIRGINIA SERVICE *

Chapter IV Implementing Travel Virginia: Potential Regions and Service Partners *

Chapter V IMPLEMENTING TRAVEL VIRGINIA: FUNCTIONAL AND TECHNICAL ISSUES *

Chapter VI Implementing Travel Virginia: Legal, Regulatory, and Procurement Issues *

CHAPTER VII IMPLEMENTING TRAVEL VIRGINIA: ORGANIZATIONAL OPTIONS AND A RECOMMENDED APPROACH *

List of Figures

Figure 1.1 Twelve Proposed Travel Virginia Regions. *

List of Tables

Table 2.1 Data Sources for Travel Shenandoah. *

INTRODUCTION

This report summarizes the results of a fifteen-month study to assess the feasibility of expanding Travel Shenandoah, a pilot rural ATIS service developed for Virginia’s Northern Shenandoah Valley, into a comprehensive, statewide service covering the entire Commonwealth of Virginia. The report is divided into nine chapters, each of which is summarized below.

Chapter I, The Concept of Travel Virginia, describes the concept of an umbrella statewide service, made up of a series of independent, financially viable regional partnerships linked together through a single, central statewide travel information clearinghouse.

Chapter II, Travel Shenandoah: Some Lessons Learned, describes the pilot Travel Shenandoah regional service that went live on April 26, 2000, and discusses some of the major lessons learned from its development and initial operation.

Chapter III, Feasibility of a Statewide Travel Virginia Service, assesses the feasibility of extending the pilot Travel Shenandoah service to cover the entire Commonwealth, using seven primary criteria. The criteria used include: institutional and legal issues, technical considerations, potential business models, financial feasibility, availability of data, user acceptance, and partnership interest.

Chapter IV, Implementing Travel Virginia: Potential Regions and Service Partners, outlines the possible division of the Commonwealth into a series of Travel Virginia regions. The boundaries of these regions are determined by a combination of factors, including the configuration of the highway system, local government boundaries, established VDOT Districts, State Police Divisions, Virginia Tourism Corporation, and State Planning District Commission boundaries, together with the areas served by local telephone and media companies.

Chapter V, Implementing Travel Virginia: Functional and Technical Issues, discusses the major functional and technical issues associated with the implementation of a comprehensive statewide service. Emphasis is placed on three major topics: data collection and maintenance, the need to expand the initial Clearinghouse concept, and the delivery of services to the end-user.

Chapter VI, Implementing Travel Virginia: Legal, Regulatory, and Procurement Issues, reviews the legal, regulatory and procurement requirements that must be met by VDOT and other agencies of the Commonwealth of Virginia in establishing any form of statewide traveler information service. It includes a brief discussion of the implications of the July 2000 FCC announcement designating 511 as a nationwide telephone number for traffic and related information.

Chapter VII, Implementing Travel Virginia: Organizational Options and Recommended Approach, outlines three, broad organizational options for supporting implementation of a statewide service and summarizes the reasoning behind a specific recommended approach.

Chapter VIII, Implementing Travel Virginia: A Proposed Four-Year Program, outlines a proposed four-year program to implement a full-scale, statewide Travel Virginia service. It discusses alternative business arrangements among regional partners, VDOT, and the central statewide clearinghouse, and describes a recommended staged program of regional expansion. The program focuses initially on the completion of service along the entire length of the I-81 Corridor in Western Virginia, followed by the I-66 and Route 29 Corridors. These are followed, in turn, by provision of service to the I-64, I-95, and I-70 Corridors, and finally by service to the Coastal areas of Eastern Virginia, the Piedmont, and Southside Virginia.

Chapter IX, Recommended Next Steps – A Proposed Eighteen Month Immediate Action Program, outlines a recommended program of activity over the period from October 1, 2000 to March 31, 2002. It includes a basic level of on-going support for the umbrella Travel Virginia program, completion of service south to Bristol along the I-81 Corridor, as well as from Front Royal east to Manassas along I-66. It provides for the immediate implementation of a first-stage, statewide Traffic and Travel Alert service covering all Interstate Highways and State Primary Routes.

CHAPTER I
THE CONCEPT OF TRAVEL VIRGINIA

The Commonwealth of Virginia has been recognized for some time as a leader in the development and application of Intelligent Transportation Systems (ITS) technologies. These technologies improve the safety and operational efficiency of the over 40,000 miles of highways in Virginia.

One aspect of this leadership is reflected in the steadily expanding provision of timely, useful, and easily accessible information to the traveling public regarding current traffic and travel conditions on major commuter routes. The Partners-in-Motion program provides such a service in the metropolitan Washington, D.C. region; a second partnership, led by ITERIS Corporation, is developing a similar service in Hampton Roads.

These two metropolitan initiatives have been complemented by a pilot rural project, covering 150 miles of the Northern Shenandoah Valley in northwest Virginia. Labeled Travel Shenandoah, the service was developed through a partnership of Virginia Tech and the Shenandoah Telecommunications Company (SHENTEL). It provides travelers with timely information on current traffic and travel conditions on the major routes serving the valley, and also comprehensive information on traveler services, tourist attractions, and trip routing. The service, which is designed to be financially self-supporting, went live on April 26, 2000 and has been in successful operation since that date, 24 hours a day, seven days a week.

VDOT’s primary objective in underwriting the Travel Shenandoah program was to demonstrate the feasibility of implementing an advanced traveler information service in a rural area. Emphasis was placed on developing a service that provided value to the traveling public, enhanced the safety and operational efficiency of the highway system, and was financially viable as a long-term business proposition. While the final results of the program are yet to be determined, every indication is that it will be successful in each of these regards.

A second VDOT objective for Travel Shenandoah (assuming that the pilot program was a success) was that the initial implementation in the Northern Shenandoah Valley should serve as a model for the subsequent implementation of similar services in other areas of the Commonwealth. The Travel Virginia program was created to assess the feasibility of such a concept, and to examine the issues likely to be involved.

Travel Virginia is a family of 10-12 inter-connected, regional traveler information services that are linked together through a common, statewide Traveler Information Clearinghouse. The basic concept of which is to provide users with convenient access to a uniform set of timely, accurate travel information for all parts of the Commonwealth. The intent is that the service be as financially self-supporting as possible, following the model of Travel Shenandoah. Figure 1.1 depicts the division of the Commonwealth into
an illustrative set of twelve possible Travel Virginia regions.

Figure 1.1 Twelve Proposed Travel Virginia Regions.

Each regional service would be the responsibility of a local partnership, made up of a combination of both public and private sector organizations. The partnerships would commit to collect and maintain up-to-date information on tourist attractions and traveler services in their region, and to relay this information to the central clearinghouse where it would be verified and combined with data from other sources into a single, integrated statewide database. Information from this database, including up-to-date information on current traffic and travel conditions, would be relayed back to each partnership in real time. The partnerships would then be responsible for disseminating the information to the traveling public via a variety of different distribution modes. The structure is illustrated in Figure 1.2.

Figure 1.2 Statewide Database Structure.

The intent is that each partnership would be a financially self-supporting enterprise, responsible for providing the services outlined above to a pre-agreed upon set of standards. In return for doing so, each local partnership would have the right to generate revenues from a range of ancillary activities, sufficient to support its operation and yield an acceptable level of profit.

The precise nature of the services involved will necessarily vary from region to region, dependent on the characteristics of the region and the core-business interests of the partners. In general terms, however, it is intended that the information provided to the traveling public and the set of delivery modes involved will parallel those implemented as part of the pilot Travel Shenandoah project. These are summarized in Figure 1.3.

Figure 1.3 Services and Delivery Modes.

Users are to be provided with the ten basic forms of service illustrated in Figure 1.3. These services are to be delivered via a mix of eight delivery modes, also listed in Figure 1.3. While the services and delivery modes will be tailored to meet the requirements of each region, the intent is that a common core of information will be available to users at all times for all regions. This common core will then be supplemented by additional information unique to each region. Similarly, it is intended that users will be able to access the service whether they are simply planning a trip for six months hence, are about to depart, are already traveling in their vehicle, or are stopped at some intermediate point along the way.

As noted above, data on local tourist attractions and traveler services will be collected, maintained, and regularly updated by each of the local partnerships for its region. These data will be complemented by additional regional and statewide information collected and maintained by the central Clearinghouse. This will include continuously updated information on traffic and travel conditions throughout the state, as well as additional statewide tourist and related data and the information needed to maintain and operate the Travel Virginia on-line shopping and reservation services.

Information in the Clearinghouse database will be updated at different intervals, appropriate to the type of data involved. Information on traffic and travel conditions, for example, will be updated continuously. Information on forthcoming events and attractions will be updated either weekly or monthly. And information on food and lodging establishments, tourist attractions, and other traveler services will be updated at least once every six months.

Users of the service will be able to access any of the eight basic delivery modes free of charge from any point within the Commonwealth and elsewhere. The only exception will be tailored Travel Alert services, designed to be delivered via pager, fax, or e-mail to specific groups of users who opt to contract for the service for a small monthly fee.

Information on any given region will be available to users located in any other region. Thus a user in Hampton Roads, about to leave on a trip to Winchester in the Northern Shenandoah Valley, could use the service to check on road conditions on a number of routes linking the two areas. Alternatively, this person could use the service to make a hotel reservation in Winchester, obtain directions to several local businesses, or check on concerts or sports events in Washington, D.C. that might justify a diversion on the way home.

The bulk of the development effort associated with the Travel Virginia program will be focused on the rural regions and the smaller urban areas of Virginia. In the case of both the Northern Virginia and Hampton Roads regions, emphasis will be placed on linking the Travel Virginia service to the metropolitan traveler information services that are either already in existence or are under development.

The service will be designed to provide information of value to multiple market segments, including both the traveling public and those offering services to such travelers. Examples include: people planning a future trip, travelers checking conditions prior to departure, travelers en-route, potential tourists, visitors to the area who are unfamiliar with the surroundings, local businesses providing services to the traveling public, commercial vehicle operators, local residents, state and local government agencies, emergency service providers, and persons needing help. Thus, the service will be designed and operated so that it provides a convenient, easy to use means of linking persons desiring a service with those in a position to provide it.

The focus on providing services of value to multiple market segments is critically important to the long-range financial viability of the concept. Just as the nature of the services provided will necessarily vary somewhat from region to region, so also will the structure of the revenue producing activities.

conventional banner advertisements, tailored information pages, web sites and audio announcements, structured search services (both web-based and telephone-based), special promotions, and commissions on electronic shopping sales and reservations.

Figure 1.4 Revenue Sources.

These sources will again inevitably vary in relative importance from one region to the next, and will in many cases be supplemented by additional sources unique to each region. In all cases, more than one revenue source, and preferably several, will need to be identified if the regional service is to be financially viable.

It is anticipated that the precise composition and focus of the partnerships will vary considerably from one region to the next, depending on the characteristics of the local area, the services to be provided, and the potential benefits that local organizations see in participating.

In the case of potential public sector partners, for example, benefits might take the form of increased tourism through improved marketing of the region, associated growth of local businesses and enhanced local economic development, improvements in highway safety and related services to the traveling public, and the ability to respond more rapidly to emergency situations.

The interests of potential private sector participants will be driven mainly by the role that participation in the service might play in increasing their existing revenue base and profitability. In most cases, this is likely to be achieved if their participation takes the form of an incremental addition to an established business, which builds upon and expands an already successful business operation, rather than through the creation of a totally new line of business.

Examples might include using participation as a Travel Virginia partner as a way to help build market share for an existing, related line of business or to simply accelerate the growth of an established revenue stream. In appropriate circumstances, it may offer the opportunity to create a new, low-cost source of revenue that represents a logical addition to an existing business and that takes advantage of existing, sunk-costs in infrastructure investment or brand identification. In a limited number of cases, participation by a private sector organization may be seen simply as a useful community service or an opportunity to build market visibility.

In the case of Travel Shenandoah, the service was built around the model of a dominant local telecommunications partner, SHENTEL, which in turn had established business relationships with multiple other telecommunication providers. Given the importance of telecommunications to the whole service, it is likely that in a local telephone company will play a leadership role in other regional partnerships. This does not have to be the case, however. Other potential local partners include: local newspaper, radio and television companies; local Internet service providers; major employers with large commuting workforces; large educational institutions; and major commercial tourist attractions.

CHAPTER II
TRAVEL SHENANDOAH: SOME LESSONS LEARNED

The initial model for Travel Virginia is the pilot demonstration service launched in April 2000 in the Northern Shenandoah Valley under the title Travel Shenandoah. Developed over a period of approximately eighteen months by a team from Virginia Tech and SHENTEL, Travel Shenandoah has proven to be an invaluable learning experience. This chapter briefly describes the current service and outlines some of the major lessons learned from its design, development, and initial operation.

Travel Shenandoah is a real-time traffic, travel condition, and tourism information service for Virginia’s Shenandoah Valley. The service went live on April 26, 2000.

The area covered by the service is illustrated in Figure 2.1. It stretches roughly 150 miles from north to south, straddling the I-81 Corridor from the Virginia/West Virginia line in the north to the town of Lexington in the south. From east to west, the coverage area is roughly 50 miles wide at its greatest point, stretching again from the West Virginia border in the west to the eastern border of the Shenandoah National Park. The area covers 14 counties, the Shenandoah National Park, roughly 250 miles of three major Interstate routes, and some 500 miles of state primary routes.

Figure 2.1 Travel Shenandoah Map.

The service was developed originally as a rural ITS operational test, sponsored jointly by the Virginia Department of Transportation (VDOT) and the Virginia Tourism Corporation (VTC). It was designed and developed by the Virginia Tech Transportation Institute (VTTI) and the Shenandoah Telecommunications Company (SHENTEL), as a public-private partnership. The same partnership is operating the service during its initial 15-month demonstration period. Slightly less than 50 percent of the total cost of the development and demonstration of the service has been contributed by VDOT. The balance has come from other sources, including a major contribution from SHENTEL.

The service (please see Figure 1.3) provides tourists and prospective visitors, travelers, truckers, and local residents with easily accessible, up-to-date information on current road and traffic conditions, tourist attractions and upcoming events, food and lodging, traveler and emergency services, trip routing, and on-line shopping and reservations. Information may currently be accessed via the Internet, voice actuated mobile or landline phone, pager, or cable television. Over the next year the delivery modes are being extended to include automated links to VDOT changeable message signs, cooperative highway advisory radio services, and counter-top terminals and kiosks.

Information is available to the user both on request and via "push" Travel Alerts, designed to warn travelers of accidents or other hazardous conditions as they occur. These alerts are provided continuously and at no charge to the user via the Internet, wireless telephone, cable television, and a tailored subscription pager service.

Data are obtained from some 35 different sources and verified and entered into an integrated, digital database maintained at a central statewide Clearinghouse at VTTI. The majority of the information that flows into the Clearinghouse is automated. The major sources of data and the structure of the Clearinghouse are illustrated in Table 2.1.

Table 2.1 Data Sources for Travel Shenandoah.

Real time information on traffic and road conditions is updated continuously via automated links to VDOT and the Virginia State Police systems. Weather information is drawn directly from the National Weather Service. Data on tourist attractions, places to stay and eat, and related traveler services are drawn from VTC, regional Destination Marketing Organizations (DMOs) and local tourist organizations, and National Park Service databases. These are augmented by private telephone company electronic yellow pages and the sale of targeted advertising and promotions on the Travel Shenandoah service. All data are checked at least once every six months. The current database contains information on over 4,500 establishments.

The Clearinghouse database is built on an SQL Server platform with Cold Fusion as the middleware ODBC programming language, and is supplemented by selected JavaScript and Visual Basic applications. The design is based on standard relational database principles and data warehouse design methodology. The database feeds all delivery modes. Information is relayed via a TCP/IP connection from the central Clearinghouse database to an identical SQL Server database maintained by SHENTEL. Data inputs and administration are managed through a custom designed, web-based administrative system.

The central Clearinghouse currently operates 24 hours a day, seven days a week. It is staffed by trained operators from 6:00 am to 8:00 pm on weekdays and from 8:00 am to 8:00 pm on weekends. During nighttime hours, the service operates in automated mode.

The Clearinghouse feeds information simultaneously to all delivery modes. In the case of the Internet-based service, the connection is direct, including real-time transmission of Travel Alerts that appear automatically in a window on every screen of the Internet service. In the case of the various telephone-based services and the cable television service, the information passes through an additional step. It is fed from the SQL Server database into a data-voice translation system developed by VODAVI and maintained by SHENTEL at the company’s facility in Edinburg, Virginia. From here, the information is relayed via a voice-actuated service to conventional landline and mobile phone users.

Information on Travel Alerts is also transmitted directly via the VODAVI system to an alpha numeric paging service, and via an automated translation system to SHENTEL’s Emergency Alert System (EAS) for display as a scrolling message on all 90 channels of SHENTEL’s cable television service. In addition to these EAS messages, one channel of the cable television service is devoted to Travel Shenandoah information.

Both mobile phone and pager services may be accessed both via SHENTEL’s own subscribers and by those of other companies with whom SHENTEL has established business relationships for shared access to the company’s cellular, PCS, and paging networks. In the case of the present service, this includes some half-dozen major mobile telephone companies and four other paging companies.

The basic Travel Shenandoah service is free to users, the only exceptions being pager subscriptions and subscription services aimed at commercial businesses and organizations. In each of these cases, users are charged a small monthly fee.

As noted earlier, the service was developed initially as an ITS demonstration project, funded by VDOT under the Smart Travel program. It has evolved to become a public-private partnership in the truest sense of the phrase; involving the participation of representatives of both the public and the private sectors, with the university playing a combined role of broker and active participant. All parties are making a significant contribution, and all parties are receiving significant benefits. This is illustrated conceptually in Figure 2.2.

Figure 2.2 Partnership Representation.

Both SHENTEL and VTTI have made substantial additional financial contributions. SHENTEL is providing access to its infrastructure at no charge, and has contributed substantial personnel and equipment to the endeavor. VDOT is similarly providing free access to its Changeable Message Sign and Highway Advisory Radio installations, and together with VTC and the State Police, is providing free access to its various databases. VTTI’s contributions, in addition to the creation of the Clearinghouse database, include brokering the development of the basic partnership development of the underlying business model and creating the marketing plan.

The benefits to the public sector include enhanced service to the traveling public, improved safety and operational efficiency of the highway system, and continued growth in tourism and travel-related business activity, all achieved at reduced cost. The private sector gains an expanded business base and the opportunity to create and take advantage of new revenue sources. The university has the benefit of both a real world research project and, through the operation of the Clearinghouse, fulfillment of its mission of public outreach. Figure 2.2 summarizes these various contributions and the equivalent benefits gained by each party.

A critical piece of this puzzle is the underlying business model that serves as the financial platform for the long-term viability of the service. In order to achieve the benefits listed above, it is essential that the service be capable of generating sufficient revenues to cover its on-going operating costs. If it fails to do this, it will not be financially viable over the long-term. It is here that the service’s somewhat unique business model comes into play.

Most other ATIS services, whether developed for an urban area or a rural area, have relied primarily on only one or two major revenue streams to support their operation. The result has been that they have been extremely expensive to maintain, often prohibitively so, resulting in either a marked cutback in service or their early demise.

In the case of Travel Shenandoah, the service was designed from the outset to be market driven, focusing on the delivery of multiple services via multiple delivery modes. Each delivery mode was designed to be aimed at the interests of one or more specific market segments. The result is a model (Figure 2.3) based on eight separate revenue streams, none of which alone could come close to supporting the costs of operation but which in combination have a good chance of doing so.

Figure 2.3 Revenue Model.

The ten information services and eight delivery modes are those illustrated previously in Figure 1.3. They are listed again for convenience in Table 2.2, together with the ten major market segments toward which the service is directed. The result is a set of eight complementary revenue streams, listed separately in Table 2.2. They are designed both to support the on-going costs of operating the service and to offer a reasonable financial return to SHENTEL.

Table 2.2 Major Components of the Travel Shenandoah Business Model.

Travel Shenandoah has been developed over a two-year period, and represents both a valuable learning experience and a significant investment of time and money by all players involved. Experience with the design, development, and initial operation of the service suggests seven major lessons for its potential expansion to other regions and the state as a whole.

The partners in Travel Shenandoah have accepted an unusual degree of flexibility in their interpretation of their respective roles, which has allowed the project to evolve successfully, often in ways that would not otherwise have been possible. In particular, it has become very clear that successful development of a service such as Travel Shenandoah, while it must still have disciplined direction, cannot be approached in the same way as a conventional ITS or transportation construction project.

By far the biggest challenge has been in the collection and verification of the underlying data. This applies to information obtained from automated sources as well as that developed directly. It is all perfectly feasible, but it takes considerable energy and time, particularly calendar time.

Probably the most important technical step that was taken in the initial development of the service was the decision to create and demonstrate an early, working prototype, using actual data, during the first six months of the project. This served both to illustrate to the service’s multiple stakeholders what the service was designed to do and how it might be of value to them, and also to provide a working vehicle for continuous refinement and expansion.

A second, important decision was to develop the service in stages, focusing initially on the comprehensive web-based system and its associated database and then extending that concept to other delivery modes.

It is a cliché to say how important it is to stay in touch with your key stakeholders, but this was underlined time and again throughout the project. The service has evolved successfully largely because of the constant interaction between the members of the project team and the project’s primary stakeholders, as well as the willingness of both parties to listen to each others’ concerns and work out creative ways of addressing them.

A service designed only to provide traffic data will almost never be self-supporting financially. A key to the prospective success of the Travel Shenandoah service has been the constant emphasis that has been placed on a market-driven perspective: view the design of the service from the point of view of the multiple users and the suppliers of information.

In the former case, the primary issue is what kind of information and transactional capabilities are likely to be of interest to different user groups at different times and places. In the latter case, the issue becomes one of determining how best those needs may be met in a way that meets both the goals of public sector stakeholders to provide enhanced services to the traveling public and of private sector stakeholders to build market share and make a profit.

What is needed and works in a major metropolitan area is very different from what is needed and works in a rural or less developed area. One cannot simply pick-up an ATIS service model designed for an urban area, no matter how good, and hope to apply it successfully to a largely rural environment.

The experience of designing and implementing the original Travel Shenandoah business model suggests clearly that it is possible to create a rural ATIS service that can provide useful service to the traveling public and be financially viable. For this to happen, however, it is essential that all parties involved view the prospects for financial return in realistic terms.

For the public sector, this implies viewing the service as something of value to the public, which can be delivered at a reduced cost to the public purse. In all probability, it will not represent a significant opportunity for revenue or profit sharing by the public sector, at least in the short run. Equally important, care should be taken to avoid endangering the viability of what will inevitably be a somewhat fragile start-up enterprise by succumbing to the temptation to charge the service’s private sector partners either for the use of data collected by the public sector for other purposes, or for the use of public infrastructure solely in support of the service itself.

From the perspective of the private sector, it needs to be viewed as an opportunity to provide a useful service that builds on an existing, successful business, and creates one or more new, incremental revenue streams without the need for substantial new infrastructure investment. The temptation must be avoided to burden the activity with the fully allocated costs of existing infrastructure that is already being utilized successfully for other, independent purposes. The goal should be to generate sufficient revenues to cover the on-going operating costs of the service with an additional, reasonable margin of profit left over to provide an acceptable return on the investment involved. The service should be viewed as one in which the public sector costs are treated as a fee-for-service, and are kept to a reasonable minimum.

CHAPTER III
FEASIBILITY OF A STATEWIDE TRAVEL VIRGINIA SERVICE

In parallel with the successful development and testing of the pilot Travel Shenandoah service, an assessment was made of the feasibility of creating similar services in other regions of the State, with a view to ultimately build a comprehensive, statewide Travel Virginia service along the lines outlined in Chapter I.

Emphasis was placed on six issues:

• Technical considerations;

• Availability of data;

• User and customer acceptance;

• Institutional issues;

• Business model and financial feasibility; and

• Potential partnership interest

The results indicated that it was both eminently feasible to develop the type of statewide service envisioned, and that there was considerable interest in doing so on the part of numerous potential stakeholders. There are, however, some significant challenges that need to be addressed. These are discussed in this Chapter.

The experience with the development and initial operation of Travel Shenandoah indicates clearly that there are no major technical stumbling blocks that would preclude the development and operation of a broader, statewide service. Indeed, many of the technical issues involved in implementing such a service have been successfully addressed in the creation of the initial pilot. The pilot program has successfully served as a proof of concept for the technical components of the systems.

Most data acquisition is now automated. Procedures have been established to support data verification, updating, and synthesis. The central database and database management system embodied in the current Clearinghouse have been thoroughly tested and are working fine. Both are designed to be fully scaleable up to a statewide level. The same applies to the VODAVI data-voice translation and voice recognition systems implemented by SHENTEL. The process of relaying information from the database to the various delivery modes has been operational for several months and is working well.

Similarly, the entire set of initial delivery modes (Internet, mobile and landline phone, pager, and cable television) have all been thoroughly tested and have now been operational for four months. They are all working well. The remaining modes (CMS, HAR, and kiosks), while they are not yet operational in Travel Shenandoah, are all based on the use of well-proven technology.

Equally important, all eight of the delivery modes were deliberately designed to take advantage of existing, widely available technology that is already in place throughout most areas of the Commonwealth.

The Internet service, for example, is available to any user with access to a computer and the Internet. While high-speed, broadband access is still some years away in many rural areas of the state, such access is not a critical requirement for the effective delivery of the service. The existing, virtually ubiquitous network of Internet service providers across the state is perfectly adequate. The same applies to conventional landline telephone and cable television service. The existing network of local access and long distance telephone companies and cable television operators provides the vast bulk of the necessary technical infrastructure.

The issue in the case of both mobile telephone and pager service is somewhat more confusing. Here the technical question is the distribution of wireless relay towers across the state and the range of coverage provided by those towers. While the network is already extensive and is growing, coverage in the rural areas of the state is not uniform. There are areas where no coverage is available, and there are a larger number of areas where reception is either of poor quality or somewhat erratic.

However, most major routes are already within the current areas of coverage, and those that are not soon will be. Further, both the extent and quality of coverage is expanding rapidly across all areas of the state. Given the pace of this development, it is not anticipated that this will pose a serious problem to the extension of the service statewide over a three to four year period.

As in the case of Travel Shenandoah, the delivery of services statewide via the remaining three modes, CMS, HAR, and kiosks, is primarily a function of VDOT’s investment priorities. There is a growing network of VDOT CMS installations across the state, including a number of planned additional installations. All of these can be connected to, and supported by, the current Clearinghouse operation. The same applies to the growing network of HAR facilities, including those owned and operated by VDOT and those operated by other agencies. With regard to kiosks, VDOT has a program in place to upgrade the existing rest areas on the Commonwealth’s interstate routes. This is to include the installation of interactive travel information kiosks that will be linked to the central statewide Clearinghouse database.

There are a few significant technical challenges ahead, both relating to the collection of field data and particularly traffic and road condition information. At the moment, there is little or no automated detection of traffic or road condition data as part of Travel Shenandoah. Over the next few months, plans are in place to implement certain forms of automated detection, mainly through the use of CCTV cameras and automated weather monitoring devices. In addition to the installation of the devices themselves, each device will need to be connected via a communications link to the central database.

There is also consideration being given to using reverse wireless tracking technology from USWireless Corporation to measure speeds and volumes at critical points on the statewide road network. Though promising, this technology is still unproven.

One final point should be made here regarding the role of an established communications infrastructure in a service such as that envisioned for Travel Virginia. Four basic forms of communications are required to support the service:

• Communications to and from field devices;

• Communications feeding data into and out of the central Clearinghouse;

• Operation of the voice-responsive and related functions of the Clearinghouse; and

• Local access communications delivering services to the end user.

In the case of Travel Shenandoah, the primary communications with the end-user are provided by SHENTEL with support from other carriers having an established business relationship with SHENTEL.

The primary links to and from the Clearinghouse are all web-based, supported by conventional long-distance voice and data communications. As noted above, relatively little reliance is placed on field devices, though this is anticipated to grow in the future with the communications being a combination of state-owned and commercial landline or wireless telephone. SHENTEL operates the voice-responsive and related portions of the Clearinghouse on behalf of Virginia Tech.

In the case of the broader Travel Virginia service, this arrangement may take on a variety of different forms, involving either multiple communications carriers, each operating in one or more different regions, or a lesser number (including possibly just one) of dominant long-distance carriers with established relationships with multiple local access carriers. The range of potential organizational arrangements is discussed further below. Independent of whatever such arrangements are made; however, all four of the technical requirements outlined above must be met.

The situation is somewhat similar with regard to the availability of data to support the service. Experience with the development of Travel Shenandoah has shown conclusively that the data needed to fuel a statewide service are available. However, experience has also shown that the time and energy that needs to be devoted to data acquisition, verification, maintenance, and regular updating is higher than one would anticipate.

In the case of Travel Shenandoah, once the basic business model and marketing approach had been established and the various Clearinghouse and delivery systems had been developed and thoroughly tested, such data-related activity accounted for roughly 50 to 60 percent of the total resources devoted to the project. It is anticipated that this will be the case for each of the new regions to be covered in the implementation of a statewide service. Data requirements basically fall into six major categories:

• Real time travel alerts;

• Current traffic and travel conditions;

• Other travel related information;

• Individual establishment data;

• Tourist attractions; and

• On-line transactions, advertising, and promotions.

Table 2.1 (in Chapter II) summarizes the major sources of data that were employed in the development of the initial Travel Shenandoah service. These same sources or their local equivalents are available for all areas of the Commonwealth.

The primary source of data in this case would be the direct link that has been established between the Clearinghouse and the Virginia State Police, supplemented by links to VDOT’s VOIS system, local VDOT Residencies, National and State Park Operations, and local radio and television stations.

In the state’s major urban areas, these public sector data sources may be supplemented by real-time or quasi real-time traffic information. This information would come from both public sector surveillance and control systems and private sector organizations in the business of collecting and disseminating traffic reports to radio and TV stations and, in certain circumstances, direct to the general public.

The same primary sources would be used here as were employed in the initial Travel Shenandoah service, supplemented by equivalent local and regional data where appropriate (data for Virginia State Parks or National Parks in the area). Again, in the state’s major urban areas, these sources may be supplemented by data from public sector surveillance systems and private sector traffic reporting services.

It would be necessary to repeat the exercise of geo-coding all Interstate mile markers and verifying the precise latitude and longitude of all establishments to be listed in the database, as was done in the case of the initial Travel Shenandoah service. This would again be accomplished through field checks by VTTI staff. The same modified version of the MapQuest software would be used to support provision of directions and trip routing information.

The primary sources of data in this case would again be the existing VTC database, supplemented by local telephone company yellow page listings, local DMO listing, State and National Park Service data, and information from individual establishments. It is expected that much, but not all, of this data would be available for use in electronic form. It is also recognized that negotiations with each local telephone company will be required regarding the use of the company’s yellow page data. Thus, it is considered inevitable that extensive direct contacts will be required to build the initial database. Once that database has been completed, it is anticipated that its regular updating could again be accomplished, at least in part, through the marketing of advertisements and related promotions on the resultant regional and statewide services.

The same basic set of data sources that were employed in the case of Travel Shenandoah would be available and would be used. These would be modified as necessary to incorporate specific local and regional information for the area in question. Considerable emphasis would have to be placed on a close working relationship with all local DMOs, chambers of commerce, and local trade associations.

Reliance would again be placed primarily on the marketing and sales activities of the members of the regional Travel Virginia partnership in question. Use would be made of VTTI’s alliance relationship with Calypso Online to provide the necessary on-line shopping service.

While the service is still new and its effectiveness, consumer acceptance, and financial viability are still being tested, every indication so far is that it will be successful. Usage is growing, the service is strongly supported by both public and private organizations, and the Commonwealth of Virginia, together with three neighboring states, is planning its expansion to other areas. Some illustrative statistics and other evidence that supports this contention include:

• In the months of June and July 2000, prior to the launch of the major marketing campaign, Internet service registered approximately 11,000 and 12,000 hits per month, respectively. Roughly 50 percent of the hits were directed to the Traffic and Travel Conditions channel. Approximately 900 mobile phone calls were made to the free 1-800 number in the month of June.

• Active support has been obtained from all 12 counties within the service area, roughly 25 chambers of commerce, local DMOs and business organizations, and over 500 individual businesses.

• The current Travel Shenandoah database contains information on roughly 4,500 individual establishments, some 400 of which have already requested and been provided with individual web-based information pages and/or tailored phone announcements, prior to any extensive marketing on the part of SHENTEL. Initial sales efforts over a two-month period have resulted in approximately 100 additional entities placing advertisements on the service.

• There is considerable active support for the Travel Shenandoah service at all levels of government, including the Commonwealth of Virginia, the USDOT, and the adjacent states of West Virginia, Maryland, and Pennsylvania. The I-95 Corridor Coalition has contracted with Virginia Tech to explore the feasibility of extending the service northwards along the I-81 Corridor to a point beyond Harrisburg, PA.

• With the active support of the Virginia Trucking Association and the National Association of Truck Stop Operators, the initial Travel Shenandoah service is currently being expanded to include an additional Truck Fleet Service channel, tailored to meet the needs of the trucking industry.

As indicated above, there is significant institutional interest and support for the development of a statewide Travel Virginia service. Within the public sector, the interest is broad and statewide, with support coming from organizations ranging in size from small local DMOs, local economic development groups, and civic organizations to local and county government, the State Police, VTC, and VDOT. In the private sector there is similar, clear support across the state from industry groups such as the Virginia Technology Alliance, local chambers of commerce, business and trade associations, the cable television industry, radio and media companies, Internet service providers, and regional paging and mobile telephone companies.

What is still unclear, primarily because of Travel Shenandoah’s short operating history and the inevitable unanswered questions concerning a broader Travel Virginia service, is the precise roles that many of these organizations are interested in playing as part of a larger statewide service. That is, there is broad support for the concept, but many questions remain concerning specific roles and responsibilities. This issue is discussed in some detail in the next section of this chapter.

Many of the questions raised tend to be institutional in nature; having to do, for example, with issues such as the organization, governance and regulation of the service, levels of future financial and political support, and the likelihood that certain critical functions (such as the Central Clearinghouse) may or may not continue in their present form.

These institutional questions break down into four broad categories, all of which need to be addressed if a statewide service is to be successful:

• Long-term organization and governance of a statewide service;

• Contractual relationships with VDOT, VTC, VSP, and local DMOs;

• Long-term responsibility for the statewide Clearinghouse; and

• Relationships with related services, within Virginia and elsewhere.

Each of these is discussed briefly below.

The pilot Travel Shenandoah service, while it has been operating in effect as a public-private partnership, is formally organized as a classical VDOT research contract. VDOT is the client, VTTI serves as the prime contractor, and SHENTEL is a subcontractor to VTTI. That arrangement has worked well during the initial development phase of the service; however, it will not work as the foundation for its long-term operation.

The same comments apply to the development and long-term operation of a broader, statewide service. A research-oriented structure is an excellent vehicle for supporting the initial planning and development of such a service, yet it is wholly inappropriate to its long-term operation. These issues, and the associated questions of the governance and regulation of any statewide service, are critical to its future success. They are discussed in some detail in Chapter VII, which lays out three possible long-term options for consideration.

At the present time, the only formal contractual agreements in place among the parties are the prime contract agreement between VDOT and VTTI and a related subcontract agreement between VTTI and SHENTEL, both relating to the initial research project. As noted above, these need to be restructured to fit the requirements of a continuing service.

Equally important, if a statewide service is to be based on a solid operating foundation, more formal agreements need to be reached among all the parties involved in the initial Travel Shenandoah service, confirming the often somewhat informal understandings that have been reached to date. Agreements also need to be reached with those partners involved in the planning, development, and operation of a broader, statewide service in other regions.

To date, VTTI has been responsible for the design, development, and operation of the Central Clearinghouse, with support from SHENTEL concerning the VODAVI data-to-voice translation and telephone-related portions of the operation. These latter portions were developed by SHENTEL as part of the pilot Travel Shenandoah service. Under the terms of the pilot contract, SHENTEL has the continuing rights to that technology, with a requirement that SHENTEL continue to support VTTI in its application in any future extension of the service.

If the system is to operate efficiently on a statewide basis, these two functions of the Clearinghouse need to be consolidated into a single, centralized operation. It should be stressed that this does not imply transfer of the rights to the telephone portions of the operation to an entity other than SHENTEL, but rather underlines the importance of pulling the two pieces together as an integral part of the support to any future, statewide operation.

Equally, and in many ways even more important, is the issue of long-term responsibility for the continuing operation of the Clearinghouse. The concept was developed jointly by VTTI and SHENTEL during the early stages of the pilot project. It has been implemented by VTTI, where it was viewed initially as a research and development exercise. As the pilot service has evolved, VTTI has gained significant experience with its on-going operation, including not only the technical operation, but also the establishment of effective working relationships with the various organizations providing information for the service. This experience is likely to be of considerable value if the service is to be expanded statewide.

It is clear that the continuing, day-to-day operation of the Central Clearinghouse, particularly in support of a broader statewide service, is something that reaches beyond the established research mission of VTTI. Likewise, it is recognized that VDOT is required to address the continuing operation of the Clearinghouse in the context of the agency’s established policies regarding the procurement of both research and professional services.

Continued operation of the Clearinghouse is, however, a service that the university can continue to provide, and would very much like to do so as part of Virginia Tech’s ongoing outreach function of the university. There are a variety of ways in which this might be achieved, each of which would have the benefit of retaining and building on the experience gained to date, providing a convenient vehicle for on-going research and development of the service, and minimizing the on-going costs of its operation. This issue, including a recommended option, is again discussed further in Chapter VII.

Initial discussions have been held with several organizations, including Partners-in-Motion, AAA, and others regarding the development of links between Travel Shenandoah and their services. These have all gone well, but decisions were made in each case to hold off any further discussions until the pilot Travel Shenandoah service was successfully launched. Now that this has happened, the appropriate agreements need to be formalized and extended to include both the broader Travel Virginia service and links to other relevant organizations, such as the major on-line travel services and media outlets. Where appropriate, such relationships need to be formalized as contractual agreements.

It is not yet possible to draw any firm conclusions regarding the financial viability of the basic business model that underlies the Travel Shenandoah service (and by extension the model proposed for Travel Virginia). Three months of operational experience is far too short a period to attempt anything along those lines. It is fair to say, however, that all indications so far are positive and that there is every reason to believe that, with minor modifications, the model developed for the initial pilot will hold up successfully, both in its initial application in the Northern Shenandoah and as a framework for implementing a broader, statewide service.

The model has three major dimensions: the first deals with the form of the relationship between the public and the private sectors; the second deals with the issue of shared risk and return; and the third concerns the ability to generate revenues that are sufficient to cover all the costs that need to be covered and leave some margin of profit for the private participants. Each is examined briefly in this section.

There are many possible variations on this theme, but for purposes of this discussion distinction may be drawn between two major types of arrangement: Contracted Operations and True Public-Private Partnership:

Under such an arrangement, a public sector client contracts with an outside party, usually a private sector contractor, to provide an agreed upon set of services utilizing a combination of both public and private sector resources. In return for these services, the contractor is paid a fee, the amount of which is typically based on the contractor’s performance, the contractor’s potential for generating revenues to offset costs, and the relative resource contributions that each party is making to the undertaking.

The arrangement allows the public sector client to protect the public interest by retaining overall control of the undertaking, while at the same time drawing on private sector resources in a way that reduces the total cost to the public. It affords the private sector contractor the opportunity to develop additional sources of income, usually by building on an established business base and associated infrastructure.

In this case, the parties agree to form a true partnership, formalized in a legally binding partnership agreement that spells out clearly each party’s role(s), responsibilities, and obligations. These include assumption of risk, investment requirements, governance arrangements, oversight authority (if any), and rights to participate in any ultimate financial gain or loss. There is no longer a client and a contractor, but rather two (or more) equal parties to a business arrangement.

The arrangement has the advantages of allowing the parties a greater degree of flexibility to manage their affairs and to respond quickly to changing circumstances. Under the right conditions, it can result in the public sector providing a needed service at a substantially lower cost than would otherwise have been possible, and result in the private sector generating significant new sources of revenue. However, it has the disadvantage of making it harder for the public sector client to protect the public interest.

The first of these two options is by far the most common form of arrangement, yet there is increasing interest in the second. Much of the discussion of such public-private partnerships to date has tended to focus not on true partnership arrangements, but rather on agreements whose structure, despite the partnership label, often simply represent a variation of the former type of agreement. The reasons for this are many, and are shared almost equally by both the public and the private sector participants.

In the case of Travel Virginia, it is VDOT’s expressed intention to pursue an option as close as possible to the second arrangement. There are, however, some significant procurement and legal issues that will need to be resolved if this is to be achieved. These are discussed at some length in Chapter V.

With this as background, the basic business model underlying Travel Shenandoah has been designed deliberately to accommodate either option. It can be readily adjusted to place more or less emphasis on a true partnership arrangement, or one that reverts back to something closer to a contracted operation.

Independent of the final form of the arrangement between the public and the private sectors, it is a basic assumption of the Travel Virginia business model that both parties will contribute significantly to the activity, make investments, share risk, and receive benefit from the arrangement. This is summarized in broad terms in Table 3.1.

Table 3.1 Public / Private Sector Risk Sharing.

The experience with the development of the pilot Travel Shenandoah service indicates clearly that significant levels of meaningful risk sharing, along the lines outlined in the above table, can be achieved provided that the parties involved each perceive the potential for achieving sufficient benefits to outweigh whatever risks are involved. If that is not the case, then the concept runs the risk of failing at the outset.

The implication of all this is that it simply takes considerable time and effort to build up the necessary levels of support, within both the public and the private sectors, before any true commitments to meaningful risk sharing can be made. This is a process that is rarely straightforward and inevitably involves significant give and take on the part of all involved. The process is greatly helped by two things: the active participation of a credible, determined sponsor who believes in the concept, and the involvement of an objective broker who can see both side’s points of view, is trusted by both sides, and can help create compromise solutions that are acceptable to each.

In the case of Travel Shenandoah, VTTI played both of these latter