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    What's Affordable????

    We all agree that the DELTA QUEEN has some pretty high hurdles to jump over before it comes steaming around a bend near you. The boat has to be purchased, moved, dry docked, new boilers, main steam line, paddlewheel, generators, the MSD has to be working (I don't think the Coast Guard will let the ol' gal piddle in the river). Then, an office has to be established, a staff hired, boat advertised, a boat crew hired and trained and the boat outfitted. All of this before the first dollar from passenger revenue is available for spending. This is possible because all it takes is money.
    The highest hurdle will be, can all this be done and still keep the ticket prices affordable? So, my question is "what's affordable"? How much are you willing to spend for a weeks cruise with your better half.....$10,00, $8,000, $5,000, $4,000, $3,000? Without folks like you and me being able to buy tickets, it'll never happen.

    #2
    Right you are, Jim. However, it can be looked at from the standpoint of comparing this project to building a new vessel, and setting up a new company to run passenger cruises. Not only has that been done, but it has been done recently. I'm no numbers person in any way, form or fashion, but logic tells me that if a company can build a new boat and operate it at some sort of profit (after a period of recouping startup costs), the proposed operators of the DQ can do the same thing. Yes, it will take a great deal of money, but as we know, it will still be cheaper than building a new boat, no matter how you look at it. All you have to do is look at the millions of dollars towing companies have spent in the last decade or so buying old towboats and taking them down to a shell, re-powering them and re-fitting from the bilge up. A different business, to be sure, but I think the principle is applicable.

    As far as "how much would we be willing to spend", I personally would have to make that judgement when the time came. I still think that with the proper marketing of the product there would be customers, but as Dale would say, "what do I know"?

    Comment


      #3
      Jim, Bob,

      to operate profitably, the DQ needs to fetch a weighted average of approximately $360-$370 per person, per day. So you are looking at an average of about $2500 pp for a week-long voyage. At those fares, with a single-boat operation, she would need to operate approximately 270-290 days of the year at an average of 85% occupancy (150 pax per voyage) to net out a profit of approximately $200-250,000 per year.

      The question is, will the public be willing to pay? If she operated primarily 7-day cruises, that equates to 40-42 voyages per year for a total of 6300 pax. Obviously, if you run shorter cruises, there are more cruises to fill, thus more pax to attract and that needs to be offset by higher marketing and operating costs which push fares up or profits down or some balance of the two.

      My numbers are all predicated on them obtaining funding at a reasonable interest expense but I would hazard a guess this will not be the case. It will most likely be mezzanine or junk debt that will carry interest north of 15%. The higher the interest expense, the higher the fares need to be or lower the profit, and this boat operates on a thin margin on the best of days.

      Best,

      Tim

      Comment


        #4
        There is one big difference, both recent operators had an established company behind the. The AMERICAN QUEEN had Hornblower and American Cruise Line had an established cruise operation on the East coast with established lines of credit and banking relationships. Of course, the AMERICAN QUEEN wouldn't be running today without the financing help from the City of Memphis.

        Comment


          #5
          THEN you get into the conundrum of: do you operate shorter trips to get folks to "test drive" the experience, and work harder to fill those shorter trips? This has worked in the past. It does give those with a lesser amount of money to spend a chance to ride the boat and have the experience. I see marketing costs being a bit higher, but I'm thinking operating costs would be about the same.

          Comment


            #6
            Would there be anything to selling the extended 7-9 day trips first to a certain capacity, and at a certain date prior to a cruise begin to offer shorter 3-5 day stays? Certainly there would be more logistics involved (taking on/putting off passengers, stateroom turnover between shorter-stay guests), but it seems to me that the likelihood of filling the boat would be greater.

            Comment


              #7
              Affordability is a relative thing. What I mean is, that there are some things in life so worthwhile that people will experience them whether they can afford it or not. The DQ is in that category. There were many who sacrificed, scrimped, and saved every penny to "live the dream". Then, there were the legions of repeaters, some riding as often as five times a year or more. No other boat or ship in the industry could match that.

              Comment


                #8
                My $.02 worth

                At least one DQ trip I took was a last minute booking for a few days on a longer trip. This used to be done a lot. People could do an overnighter even when there was no room and sleep on a sofa. Then the company was sold and the new suits didn't like that last minute stuff. Too bad. Back in the 1970's when I was a passenger on the DQ, I think I was paying about $50 to $75 a day from a $5000 a year salary. Today that would be about $300 to $400 a day on a $30,000 salary. That is a very average income, but affordable for only a few days. I was also single. (When a few days isn't enough, you get a job on the boat. At least that's what I did. See above about being single.)

                Turnover days are hard on the staff, but they get paid the same, regardless. Technically, passengers are paying by the night, so what they don't want to do is have a non-paying night. That is why turnover day is so hectic - passengers going and passengers coming with only a couple of hours in between.

                It is too bad, and will probably never change, that offshore cruises are a fraction of the price of US flag vessels. They herd 'em on like cattle, and even a major disaster is like a bump in the road. However, Viking River Cruises has apparently solved the cost problem by some very, very good advertising. They are not cheap. And they keep building new boats. I have a sister-in-law who has been on a few Viking cruises, and she would go again. So there is good service to back the lush ads. That is where the new DQ people are going to have to step up to the plate. Advertisng, service, and flexibility are all key. Also, a variety of fares.

                I noticed when I worked on the DQ that the passenger list consisted to a large extent of ardent repeaters and people from California. I wonder if that still holds true today.

                Comment


                  #9
                  Kentucky Lake Soapbox

                  Besides money, one of my frustrations was trying to get the boat's schedule to line up with my work schedule. The concept of staying based for an extended time in Cincinnati for a series of weekly Kentucky Lake trips models the weekly milk runs of many blue water ships. This format also also the passenger to take advantage of Southwest Airlines or other round trip airlines (or maybe drive?) without having to do an open jaw return trip. Then the boat could do a repositioning cruise to move to the next extended home base port.

                  I also recall that AQ was fairly successful staying put in NOLA for a series of 3/4 night introductory cruises. One or our .orgers noted this was hard on the crew but well received for marketing and purposes.

                  As far as access to travel markets I wonder how the trips from Ottawa, IL worked to reach the Chicago market? I would also think staying in Pittsburgh for a while would be helpful to reach the east coast markets?

                  Wesley
                  Last edited by Wesley Paulson; 10-09-2013, 02:42 PM. Reason: Added title

                  Comment


                    #10
                    Jon, Greg, Lexie and Wesley all have what I think are good ideas. I'm not sure the "deck passage" (no assigned room, sleep on a couch) thing would still work - Homeland Security, for one thing. However, I see nothing wrong with a shorter trip-within-a-trip, like going from St. Louis to Davenport on a St. Louis-St. Paul trip or Memphis-Paducah on a Memphis-Cincinnati trip. As Lexie said, it used to be done quite often.

                    When the Greene's started the "tourist steamer" idea (no freight), all trips originated and ended in Cincinnati, period. You booked what you wanted according to that schedule. I don't advocate a return to that concept, but something like Greg mentions would work nicely, especially if you allowed partial trips.

                    I also thought Betty Blake's idea of the weekend trips was excellent, and it certainly allowed me to cruise for the first couple of times. I simply would not have had the time or money to take a week-long trip, period. As it was, I did take two weekend trips and then (as Lex also mentions) that was not enough to suit me so I got a job on the boat. They could run weekenders out of NOLA, Memphis, St. Louis, Cincinnati, Pittsburgh and St. Paul as they used to. They could even do one out of Paducah, Nashville and/or Chattanooga. Advertising costs can be reduced by concentrating on local and regional advertising for those trips instead of national ads (except for the main brochure).

                    Speaking of brochures, they should put the fares up where folks can see them and not have to dig and search. It is what it is. Either people want to go and can afford it (or will find a way to afford it) or they don't. Let them have the info up front. List the trips in chronological order -- folks know when they can travel and when they can't -- have it out there so they can see what's what and say, "OOOH, they're going to be running a trip out of St. Louis (or wherever) that week we'll be off!" Put pictures of real passengers on the boat in the brochures (not models) and have the crew included in that.

                    We all know this is not the 1970's anymore. We know mistakes were made in the past and people get their information differently now. However, they're selling an early 20th century experience on an early 20th century boat. The market they're trying to capture still thinks in "20th Century" terms. Why not market in that way, at least partially?

                    Steamboat cruises have never been cheap. Those who want to go will go, and those who cannot will dream, scrimp and save or they will wish. As Lexie said, the fares will never be what the Caribbean cruises are.

                    Comment


                      #11
                      *That cruise business formula*
                      Hi, Jim & Steamboating colleagues:
                      Catching up here now on .org reading postings. Great discussion, many well-based points. The one big factor of any cruise boat/ship line is that 'cruise business formula' based something along these lines: size of vessel + crew + operating expenses + per head cruise rate on a 'sliding scale' may = profit. Yet, more currently operating boats cruising on the rivers also comes with more competition, marketing, sales and imaging. This can be good. The muddy water cruise boats are right in the same boat [No pun intended] as the much-slammed big blue water vessels with all competing for the same disposable income dollars.

                      Lexie and Wesley make good points above. Yet, the DELTA QUEEN, or any similar vessel, are also in the 'milk runs' just like the blue cruise water big babies. Something must be going right for 4,000,0000 North Americans booking blue water cruises each year. Yes, the late Betty Blake talked and wrote often to some of us about "Shorter cruises with the DQ." Betty said she 'thought' the company and DQ could make money on a weekly schedule of three and four day runs. Granted they were short trips from roughly Friday PM to Monday; then Monday PM to early Friday on a rotating schedule. The celebrated and very popular seven day Kentucky Lake trips were all round trips in and out of Cincinnati operating on/around ten weeks in the summer with either a ten day Pittsburgh or ten day Reelfoot Lake trip tacked on either end. And filled they were as Jim Reising can attest. The later 'one way' trips demanding flying into Cincinnati, [or other U.S. cities] flying out at another city was a concept sold to Betty and the DELTA QUEEN Co. then by a New York Wall Street travel expert and executive to maximize income. Remember, U.S. service airlines were then still regulated. Today many former cities have lost much air service. He felt the round trips were often too long and could be cut in half. Many here saw, know what happened both good and bad. Betty, often in an unguarded off moment, voiced her own dislike for long DQ trips. I nearly passed out at the table hearing her pronounce, "Anybody who would book twenty-one days consecutive back to back on this boat has to be nuts." [Her words and not mine, so don't kill the messenger].

                      Lexie's rock-bottom low daily 'hop on, hop off' rates recall those I used to receive from the company way, way back. You could phone the Gl office for availability and then meet the boat either in Evansville or Louisville for a nice short run up to Cincinnati. Other times a late 'hop' here in Cincinnati could take you to Louisville, Evansville or even Cairo. What was my daily rate then? A sum total of $12 per night. A few times Mrs. Letha C. Greene would toss her cabin key to me and say, "Here, my room is yours. I'm getting off early to head back to Cincinnati." Yep, those were the days. Jim Reising, being the DQ's purser for no short time, knows all about the then and now prevailing Interstate Commerce regulations.

                      A number of others also received nice 'deals' for less money from time to time. Big problems came when some of them were honking off around regular full-paying passengers. It hit the fan when said full-payers marched to the Purser Office or immediately had their travel agents phone the office when they arrived home for either a "refund or an adjustment." It wasn't a pretty picture with many red faces. Who out there remembers these incidents?
                      Well, what do I know?

                      R. Dale Flick
                      Coal Haven Landing, Ohio River, Cincinnati.

                      Comment


                        #12
                        I'm far from an expert at garnering reservations on the DQ, but in my experience, all the cheaper rooms sold out first. Donno how general that might have been, but if it was...is there a lesson there? Cap'n Walnut.

                        Comment


                          #13
                          Advertising

                          IF you stop and look at the idea of getting an already very well established name out there. You not only get the cruisers from the other boats but also the excursion boats. You will find a lot of free advertising going on as we speak. People are always on Facebook and other sites talking about the boat coming back out. I would say as things progress we will find more national news agencies heralding the news. The shorter cruises will be imho better with todays world. As you have fewer people who can afford to take 7 nights with work and home too. You will also have many who want those. With the world today and the keep passengers busy, the Delta Queen is going to have some hurdles to overcome. I know the boat will do great as who wouldn't want to cruise an American historic treasure. So look at all the free advertising we are getting. The best kind is word of mouth. We already have thousands spreading that word.
                          I can't wait :-)

                          Comment


                            #14
                            hi all
                            The National Trust for Historic Preservation runs a number of upper class bed and Breakfasts and old hotels. It is a monied clientele that could fit the new customers needed to keep her afloat. The three and/or 4 day runs could be round trip fares one way by bus and the other by boat. Any good city landing would work. e.g. on a Cincinnati to Kentucky Lake trip. One way passengers get on at Cincinnati ride to Kentucky Lake. A bus picks up an equal number at Cincinnati and delivers them to Kentucky Lake and returns to Cincinnati with the up bound passengers. This might also work with a few one day only deck passengers. The Alaska ferries still take deck passengers, bring your own bedroll, You just can't sleep in your vehicle anymore.
                            Missouri river rivertrat

                            Comment


                              #15
                              *Cheap rooms always sell out first?*
                              Morning, Cap n' Walnut, Ed and Carl,
                              In the case of the DELTA QUEEN often selling out her cheaper rooms first isn't always the case in the general travel market. Statistics indicate that with the 'big blue water' ships, it's the more expensive cabins, suites that actually sell out from the top down first. The big ships have a multitude of available cabins on a sliding scale at vastly varying costs. And the big lines love to tout their "inside vs. outside cabins...unobstructed views...private outside verandas" etc. This too part of the present day 'cruise business formula.'

                              The big ocean ships do come in for some criticism in these chat rooms. Again, don't knock em' until you've tried em.' Not everybody's cup of tea, but you often can't compare apples to oranges. Well, what do I know?

                              R. Dale Flick
                              Coal Haven Landing, Ohio River, Cincinnati

                              Comment

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