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A different (optimistic) view

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    Sorry for any confusion. I cannot confirm of the sale of the Mississippi Queen. Of the four vessels sitting in the sidelines, however, she is the least likely to re-enter the Mississippi cruise business. She is not only partially gutted, unlike the DQ she can be converted to another use (shops & museum, casino, or a hotel with competitively-sized rooms) for less money than creating a similarly-sized river-themed building from scratch.

    Although I realize that there are many who feel as strongly about the MQ and AQ as the DQ, it is impossible for me to imagine that anyone will ever again attempt to operate all three. If the MQs "retirement" to Madison Indiana falls through, her availability to be a competitor is not good news for those of us who are primarily interested in the continued operation of the Delta Queen.

    As for Judy's point, two independent sources have told me that the DQ has consistently turned a profit. Against her larger sisters she has three undeniable advantages. First, she travels through smaller locks and under shorter bridges to cruise hundreds of miles of rivers that her sisters can't get to. Second, she attracts an authenticity crowd that is uninterested in replicas (or a blue water cruise). Third, the Delta Queen can be profitable with a much smaller number of bookings.


      [The following answers were related to a post that was subsequently removed by its author. -Bill]

      1. From all reports I can agree that ACV's problems were due to expansion beyond the Mississippi. I can also imagine that the Mississippi must have been ACV's "cash cow"---at least until the American Queen entered service (why else would it have been launched?).

      I hasten to note, however, that there is a huge difference between full occupancy (all beds filled) and full yield (all beds filled at full price). A former sales manager for ACV told me that soon after the AQ was launched, they needed to use profit-killing "incentives" to fill their boats. As opposed to outright discounts, ACV's measures usually took the form of "free airline tickets" and/or "free extra hotel nights." If a cruise suffered from low initial demand, travel agents were given free trips, doubled commissions and generous advertising and mailing allowances. Additionally, repeaters like you and your wife would have been offered substantial "loyalty" discounts.

      2. The same exec told me that when Delaware North ("one of the world's largest privately held companies") took over, they had a "bold new plan" to fill otherwise empty staterooms on their three Mississippi boats. Within a few months, however, Delaware North discovered that only a tiny percentage of their many thousands of employees and vendors were interested in a Mississippi cruise. In addition to reviving ACV's earlier incentives, Delaware North mailed proposals to past customers who had used their facilities to host conferences (which explains how I received my 2003 "invitation" to host an event on the Mississippi). By 2004 Delaware North's year-round yield on the Mississippi was well below 60%---and far too low to be profitable. The one bright spot was the Delta Queen, which could be filled to capacity with fewer discounts and incentives. So while Delaware North's passenger counts might have provided the appearance of profitability, this was certainly an illusion. Why else would they have cashed out for 50 cents on the dollar?

      3. I also agree that Majestic America raised the Delta Queen's capacity from 174 to 176 by converting the "Riverlorian" cabin into a twin bunked stateroom. That's why my 2007 Delta Queen charter hosted 88 tandem teams instead of the 87 couples slated for 2006.

      The issue with the future of Mississippi cruises in general (and the Delta Queen in particular) is whether or not an operator can make a profit. I can state with some certainty that the supply of Mississippi cruises has exceeded the full-fare demand since the American Queen entered service. The two most recent owners of the three steamboats never turned a profit. Delaware North paid $80 million to buy the three boats in a bankruptcy auction, lost substantial amounts during 47 months of ownership, and then sold the fleet for less than $40 million.

      If that sounds bad, Majestic America threw in the towel after 32 months of losses, and is still looking for buyers.

      The good news is that the Delta Queen is not the problem. Although sales in 2007 and 2008 (when the MQ was laid up) prove that full-fare demand on the Mississippi is certainly less than 806 pax (the combined capacity for the AQ, DQ and River Explorer), full-fare demand is certainly higher than 176---even in the midst of the current economic meltdown.

      Assuming I wanted to enter the Mississippi cruise business (which I don't), I'd immediately reject the MQ and River Explorer due to their current condition and suitability. If times were better the AQ would be an easy choice. But for now, the Delta Queen has everything going for it except the required congressional exemption (which trumps the Coast Guard certificate). No one can build another one like her. The return of any combination of the other three Mississippi vessels can't take away the DQ's unique abilities to entice heritage buffs and cruise smaller tributaries.

      With one bold stroke a buyer can save the Delta Queen AND a 200-year history of Mississippi River Cruising!

      -Bill McCready


        OK, I'll float this idea one more time--as dangerous as it is.
        What about forming a corporation to buy the DQ and operate it? Yes, we'd need more than the folks here to raise enough money, but I'd bet most of us would hawk something to buy stock in the new venture.
        Tilting at windmills out here in Californy
        David D.


          Curious idea David…and not entirely beyond the realm of possibilities. It’s all a numbers game as that will be the only thing the bank is interested. If you can purchase the DQ at a fire sale price would be a good start. More importantly, one would also need to examine the DQ’s operating budget ….with the union wage scale. Without it, the current government more than likely will never reinstate the exemption.

          Any estimates on her operating costs? Yearly, quarterly and monthly?

          With the right numbers, the right business plan (controlling the competition) and a course to reinstate the exemption…attracting the right investor(s) is actually pretty easy. The harder part will be proving to a bank it will work after three companies have tried and failed. Using some of Bill’s information and logic on the ‘capacity’ of the river will be a good foundation.

          Any comments?


            We need a leader. Who wants to start the ball rolling? I know where you can get a good window washer and brass polisher cheap ;-))


              For those who want to read carefully, you'll still need to read the preceding emotionally unreserved post three times before you understand that the author is not upset at me. Whew!

              [The referenced post was later removed by its author -Bill]

              Once you've read his post that many times, you'll also understand that he has done a fair job of proving one of my central themes. I'll return to this later.

              My "different view" is that the Delta Queen was doomed back in 2007, and has a bright future today. By my hypothesis the problem with obtaining a new exemption was NOT due to any of the various reasons I'd seen listed on this website (i.e. the Coast Guard, fire safety, a pair of small unions, or an unreasonable politician). Instead, the Delta Queen was hostage to bare-knuckle national politics. While Congressman Oberstar ran defense, other members of his party used the Delta Queen in closed-door solicitations to rake in millions of dollars for their November 2008 campaigns. Was this fair? Absolutely. It was also brilliant politics, especially when you consider that the owners of the Delta Queen were famous for their support of the opposing party.

              The other problem I saw back in 2007 was that the officers of AMIE (the corporation who would not be allowed to operate the Delta Queen after 2008) had a fiduciary duty to protect their river cruise monopoly. To perpetuate this monopoly the Delta Queen would need to be permanently disabled (i.e. scrapped or de-boilered). Was this fair? Certainly. The Delta Queen was property of corporate shareholders. To allow for her future operation by a competitor would have been grounds for a shareholder suit.

              A lesser concern of mine was that the Mississippi river cruise business has been unhealthy for years. My argument was that the balance of supply and demand on the Mississippi had been skewed to the point that three successive owners of the Trio of Queens lost money operating them. While it's fine to lay a huge portion of the blame on missteps of current and past owners, no one should assume that there is an unlimited supply of people, cash in fists, clamoring to pay full price for a cruise on the Ohio and Mississippi rivers.

              The emotional author of the preceding [now removed] post believes that capacity (the supply side of supply and demand) isn't the problem. He provides unsubstantiated break-even numbers for the three boats at "…a little under 79% full." While claiming that there are enough passengers, he tells us that his mailbox was flooded with 2 for 1 deals and offers for $99 per day cruises. Does he somehow think the "idiots" mailing him those cards were doing it because they liked "repeaters" better than passengers who would have paid full price for those same rooms? Actually the huge discounts were not only being offered to repeaters, they were being offered to anyone who typed the words "Delta Queen" into an internet search. The problem for the last three owners of the trio of Mississippi steamboats was not that they couldn't fill the boats to over 79% occupancy, but that they couldn't fill the boats to reach 79% of "yield." If a steamboat is 100% full of people who responded to a 2 for 1 offer, the yield is 50%---and an operator who needs 79% will soon be out of business.

              The same individual also expressed dissatisfaction at the ownership that sent out "last minute two-fer postcards to everybody and their uncle for the MQ and the AQ, but never, EVER for the DQ." His words prove my point. After the AQ was launched, the pair of big replica boats (with a capacity for over 400 passengers each) couldn't be filled without huge discounts. But the smaller and authentic Delta Queen, with capacity for less than 200 passengers, continued to attract enough full-fare customers to avoid drastic discounts.

              The GREAT NEWS FOR 2009 is that now that the 2008 elections are over, the Delta Queen is no longer valuable as a political pawn. Additionally, the monopoly-bent corporation that owned her has new plans; and now wishes to sell the Delta Queen to someone who will operate her. But after three successive failures of Mississippi River cruise boat operators (four if you count RiverBarge), will anyone take the necessary risk?

              My answer is YES. My optimism for the Delta Queen is fueled in part by the lay-up of all the other 1000+ berths on the Mississippi River. While this may be sad news for fans of the other boats, and horrible news for "repeaters" and others who thrived on below-cost deals, it's great news for an entrepreneur who is expected to put money at risk. At this unique time in history there is an economic vacuum that should cause someone to buy a steamboat to offer cruises on the Mississippi. The real steamboat race of the 21st century is which of three boats will resume service first.

              My favorite in this race is the Delta Queen.

              Does anyone else want to argue that my hypothesis is flawed?

              -Bill McCready


                I'd like to throw in two very different thoughts, though both are very relevant in my opinion:

                1) we had this (fruitless) discussion about rates before; problem is, we're more specilating thn knowing. There are many factors playing a role in defining yields, occupancy rates and "reaonable pricing" where we don't know the facts that it's useless to discuss this at all. We do know how much company x paid for the company, but we don't know how much depts they took over. We also don't know how much of the prices they paid were cash and how much of it has been financed by banks (hence: you have to add the interest for these depts to the overall cost!). etc. etc.

                2) If you compare the DQ to Princess (or any other ocean cruise line in that sector), don't only look at the prices. Don't forget that the first timer will not recognize things as advantages of the Delta Queen that we think are her greatest assets: small rooms, bunk beds, little entertainment, 3-piece-band instead of a whole orchestra in cruise ships, no pool, no spa, etc. etc. When trying to sell a cruise, all these "shortcomings" of the DQ are huge disadvantages on the cruise market. Only the repeat passenger acknowledges all this as advantages! and a lot of first times will not return because thes didn't see all this as advantages, depending on how much they learned from their travel agents about the DQ when booking. (another cost factor, by the way: training the travel agents to sell the DQ in an appropriate way; otherwise what ever advertizing you make, it costs yo a lot of money just to find disappointed one-time passengers ...).

                And one thing we DQ fans don't see but what is a huge problem for river cruising in the US in general (and, Jim, are you reading? this also might ben an answer to the question why river cruises in Europe are booming while they're not in the US): Look at the attractiveness of the port stops. Compare Evensville, IN, with Grand Caymen and tell me what you'd prefer (if you're not a repeat passenger on the DQ and are deciding between a ocean cruise and an US river cruise. LaCrosse, WI, vs. Glacier bay, AK; even Lake Barkley vs. Panama Canal. Check the itineraries of most of the cruises and you'll find out that ocean cruises are offering sensationally cool port stops every day while on some river cruises you'll have one small village after another with names some have never heard before. What about coming back home from a cruise and you're telling your friends where you've been: Diving with sting rays on Grand Cayman vs. visiting the local county museum at Nowhere, Alabama. Seeing an Alaska glacier calfing vs. the confluence of the Mississippi and the Missouri River. Having seen Rome, Naples, Malta, Barcelona and Monaco in a 7-day-cruise vs. having seen Alton, Hannibal, LaCrosse, Winona on a 7-day-cruise.

                To all us river fans, the river isn't unattractive at all. But think of all these people who don't know about the attractiveness of the rivers (and, let's be honest, Grand Cayman IS cooler than Winona, WI). We see it too much fron our perspective and fotget how incredibily difficult it is to convince a new customer to even think about choosing between Cayman and Winona ...

                One more point, then I'll stop ;-) Yes, the river might be closer to home for many; no flight required. But ocean cruise lines are offering this, too. There are Caribbean cruises out of Boston, New York, Baltimore for this very reason. So even this argument is not as strong as it seams.

                Finally, I still agree with Bill's optimistic view. Yes, I think it's possible to run the Delta Queen profitably. It just has to be managed in a very different way than it has been over tha last couple of years. A very specific approach for this special boat has to be taken. And managers with experience from Princess, HAL or Carnival will mess it up, no matter how good they are!



                  Boiled Shirt

                  Thanks for a very informative and entertainment thread that pretty-well boils down to Franz's last paragraph:

                  ... it's possible to run the Delta Queen profitably. It just has to be managed in a very different way than it has been over tha last couple of years. A very specific approach for this special boat has to be taken. And managers with experience from Princess, HAL or Carnival will mess it up, no matter how good they are!

                  To wit:
                  ...has to be managed in a very different way
                  What WAS, over all the years, starting with Tom Greene, the best management style(s) that made the DELTA QUEEN successful? Identify that style(s) and use it(them) as a model to operate the boat.

                  A very specific approach for this special boat has to be taken.
                  What specific approach is that? Myself, I see Mark Twain, steamboats, and a journey into an idealized America of a different and simplier era. The Boomers, entering their Gilded Years, will eat it up, and make this approach appealing to all those seeking a Mark Twain Mississippi River steamboat experience.

                  ...managers with experience from Princess, HAL or Carnival will mess it up
                  Cap'n Betty Blake, with the guidance of Bill Muster and the operational genius of Enrie Wagner, were arguably the most successful steamboat managers in history. They were steamboat people who understood their product and their markets. The DELTA QUEEN needs managers like that unbeatable team to operate successfully.


                    Seems to me the market is AMERICA and that should appeal to many Americans who are getting pretty tired of having so much international stuff hurled at them. Maybe a song such as "See the USA the Delta Queen Way" would help (sorry Chevy, I just had to do it).

                    But to me, the Delta Queen IS the attraction. It doesn't matter where she's going on a trip, just so she's going. It's nice to visit the towns but they are secondary to the boat herself. I don't have any interest in visiting tourist traps in the Bahamas or anywhere else.I just like the DQ for what she is and for what she represents.

                    Don't get me wrong here as I really like going to Europe but for pure relaxation there's nothing better than several days steaming along the rivers on the Delta Queen, listening to good live Jazz, watching the steam engines work, meeting folks and seeing the country from a perspective not available any other way. I think that is marketable. It has been to me. My wife says the DQ cruises are the most enjoyable vacations she's ever had because they are so relaxing yet we still see new and different things each time. I have to believe there are a lot of untapped people who are just waiting for this kind of experience. Yes, it is a niche and smaller market than that which fills the glitzy cruise ships but then, she's a boat not a ship and that is one of the things that should be emphasized, in my opinion.
                    -Jim Herron


                      Jim: I think that you are right but going back to what Franz sez...this is a relatively new market...Bruno sez this is the baby-boomers ripening into are we, you, they, going to reach them? Them as has been raised on TV, glitz, high speed chases, explosions, smoke, lasers, computers, "Reality" TV, lotsa skin in Vagas, screeching tires and all? I would speculate that the boomers' generation and those since pretty much view the DQ as the absolute icon of "squaresville". Something like the old 1918 song: "How you gonna keep em down on the farm after they've see Pariee?" A sunrise on the river might do it with the mists rising into the slanting rays of the sun...a lilting calliope concert bouncing around in a lock chamber and making your very toes happy..a sonorous steam whistle that can enter your ears, stand you hair on end and shake the very timbers of your soul? Or a simple "Good Mawnin'" from a grinning crew member who really means it? And, yeah, Jim, you've done more than your part capturing some of that stuff and turning it loose on U-tube. But it does not condense very well into a piece of paper. How did you all get hooked into doing it? Parting with what is big money to most of us? Spouse? work on the boat? Dragged on as a kid? Saw the Queen somewhere? This is the kind of stuff that is poorly understood on Madison Avenue and absolutely necessary in my opinion to reach the newbies. What happens to all that information that is gathered via questionaire at the end of the trip? Any body here ever get a chance to read them? Cap'n Walnut


                        Cap'n Walnut, I agree with you 100%! Jim is right that it is the boat itself. But my friends used to ask me, "What do you DO on there?", and they could not imagine it. It's like CW Stoll used to say about the river and the boats in general -- "Either you 'get it' or you don't". And you can forget trying to translate that into advertising.

                        Many of us oldsters remember the old legal-size tri-fold "brochures" from the 1970's. They had a little note "from Capt. Wagner" (I doubt it was really he who said it) and that brochure fired me up so much more than the thick magazines they sent out in later years. Can you make money with the folks who find "less is more" in the brochures? I doubt it.


                          *RE: 'Niche market/Louisville's luxe rail Co.'*
                          Steamboating colleagues:
                          Very interesting insights above on 'niche marketing' with 'baby boomers' entering the golden years/marketing river cruises. May not be 'pure steamoats' but a 'to the trade' squib arrived here this morning announcing Mr. Owen C. Hardys Louisville, KY based 'Society of International Railway Travelers' discussing his "international luxury, first-class and steam rail' company as a 'niche operation.' Mr. Hardy as CEO said his top seller is a 15-day 'Across Siberia by Private Train aboard the 'Golden Eagle Trans-Siberian Express' with the per-person rate at $15,795. All taking into account the client's "personality type." Travel companies working with Mr. Hardy must provide either a valid IATAN or CLIA card, a letter on company letterhead and a signed W-9 form. I would assume this company also deals with other rail brands in the 'niche market' known as 'Great Railway Journeys of the World.'

                          The niche market appeals to, "...a person who, just a bit, marches to a different drummer, has traveled widely and is looking for something unique and different." In my time Russian rail travel got you there but needed much sprucing up for an expanding market. I recall being on the 'Red Arrow Express' with Russian army soldiers coming aboard at stations to monitor the train and passengers. When passing certain sensitive locations they drew the train curtains and bellowed, "Nyet photographien." Shipyard is correct in his summation of the work Betty Blake, Bill Muster, Capt. Wagner and company accomplished with the DQ in their time. Betty spoke just before her death at the PRSA meeting here on the DQ stating, "Understand the unique appeal of the DELTA QUEEN and take her for what she is."

                          *You may be able to access 'Society of International Railway Travelers' at:
                          The Society of International Railway Travelers: Luxury, steam, first-class train tours or Tel: 1-(502)-454-0277 Some of our Louisville posters on .org may know about this company.

                          Coal Haven Landing, Ohio River.


                            And we must not forget the sounds. Where else outside of a few collectors can one still hear a genuine steam whistle or steam calliope? Few people today even know the real difference between a steam whistle and common air horn! That's a sad comment on the current generation. I would hate to see the sound of the steam whistle pass by forever!

                            We all know here that there is a big difference between the sound of the 10" Lunkenheimer chime whistle on the Delta Queen and that of a chime air horn on a towboat. I, for one would like to keep that sound on our rivers. If I'm not the only one who feels passionate about this, please feel free to "chime" in. David Dewey, for one, knows exactly how I feel about this.

                            We have been very lucky to have riverboats such as the Delta, Mississippi and American Queens spreading their music along America's inland waterways. Now, apparently we have already lost the opportunity to keep the sound of steam whistles on our rivers unless the current administration can modify the safety at sea law to exclude historic riverboats on inland waterways, such as the Delta Queen.

                            There are a few steam excursion locomotives still running, but their numbers are also dwindling. I moderate a group all about steam whistles and they are indeed a very rare sight and sound these days. We educate our members on their history and design. We get together for occasional whistle blows throughout the country, but few people outside of our 720+ members are aware of these events. I invite everyone who is interested in preserving the sound of the steam whistle to check us out. Our goal is to bring awareness of the steam whistle and its technology back to the general public. You will find our steam whistle group listed in the links. We have a similar link back to this group.

                            The good thing is that when I began moderating the steam whistle group several years ago we were at a mere 60+ members, mostly from an air horn dominated group, where steam whistles were only a sideline. We have since experienced a twelvefold growth in our membership! We specialize only in steam whistles and have already surpassed the membership of the combined horn/whistle group by well over 100 members. This is proof that there are those interested in learning more about how to make the sounds of the past, of which riverboats were a very important part. A growing number of our members are now designing their own steam whistles.


                              "Them as has been raised on TV, glitz, high speed chases, explosions, smoke, lasers, computers, "Reality" TV, lotsa skin in Vagas, screeching tires and all? "
                              Well, Capn Walnut, that may be an overview of the Boomer generation, but speaking as one from the very first year of that generation, yes I've had TV since I was 5 and I am basic computer-literate, but the rest of the stuff you named is not part of my being. That's the trick - to find those people who are outside the generalization of a generation. I know I'm not the only one, and I'm sure the number is quite large, but how to reach them... glitzy brochures with beautiful models instead of real passengers isn't one way, and neither are swans instead of eagles - that's for sure!


                                I hear you Judy, but what DID get you to part with coin that very first time? I, like Shipyard, am not so sure that the boomers would not be enthusiastic participants IF they knew or could be shown what they were missing. You as a teacher might know if the kids now are even reading Mark Twain or even know who he was. I do not believe that human nature has changed all that much...mostly the things competing for their time, attention and money! Cap'n Walnut