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A different (optimistic) view

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  • Bill McCready
    replied
    River Queen in Escrow?

    EXECUTIVE SUMMARY: According to a news report appearing in last Friday's Eastern Oregonian, a syndicate is being formed to purchase the "Queen of the West." The potential sale of this riverboat to a northwest group headed by an experienced Columbia River cruise operator is great news for those of us who are interested in the future operation of the Delta Queen.

    ANALYSIS: The QW --- like the Delta Queen --- is one of the six riverboats that was last operated by Majestic America. While it's easy to err while comparing different boats on different rivers, here are some observations that should be encouraging to fans of the Delta Queen.

    First, this proves that Ambassadors International (formerly doing business as Majestic America), having returned the two "take over payments" boats (American Queen and Empress of the North) to MARAD in 2008, is still actively working to find new owners for the four remaining riverboats where they hold the "pink slip" (Delta Queen, Mississippi Queen, Queen of the West, and Columbia Queen).

    Second, even in this "challenging" economy, someone is looking to roll the dice on the profitability of river cruises. Interesting to me is that this group has the same name and CEO as the company that bought the newer Columbia Queen from MARAD in 2004, and operated her for a few months in 05-06 before folding up shop in the face of Ambassador's purchase of the other two Columbia Riverboats.

    Third: This "experienced player" --- when taking a chair at the game where he was previously beaten --- is opting for the older and more authentic Queen of the West instead of his previous Columbia Queen or the larger and more opulent Empress of the North.

    Fourth: The QW was not only oldest and most authentic of Majestic America's Columbia River fleet, she's the only Columbia Riverboat that has a track record of year-after-year profits (1995-2000). It was, in fact, the QW's sustained profitability that allowed its owners to commission the Empress at about the same time that ACV's Delta Queen Steamboat Company launched the CQ (which operated for two years before being surrendered to MARAD in 2001).

    Fifth: The article indicates that the prospective new owner's sole intention is to operate this one smaller boat --- which is nearly identical in passenger capacity to the Delta Queen (167 pax vs 176 pax).

    Sixth: From the article we can surmise that some potential funding may come from sources based in Pendleton --- a historic town of 17,000 that has seen better days and now depends on tourism. Although Pendleton is miles from the Columbia, it was invariably featured in river-cruise shore excursions. Are there similar small towns along the Mississippi and Ohio who will also miss the arrival of riverboat tourists each spring?

    Seventh: This Columbia River plan is moving forward in spite of the existence of two potential competing boats. As would be the case on the Mississippi, one of the potential competitors is in the hands of Majestic America, and the other even larger potential competitor is in the hands of MARAD. We can surmise that this gambler doesn't think a new competitor will beat him using one of those newer and less authentic boats --- both of which cost more to operate.

    I think all of this dovetails with my previously expounded (optimistic) belief that a shrewd Mississippi riverboat "gambler" (or syndicate) will decide that buying just one boat --- the Delta Queen --- is apt to be a winning wager.

    -Bill McCready

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  • David Vrooman
    replied
    Thanks for setting me straight, Bob -- I have a tendency to glamourize my heroes, and the Greene family, in light of what they accomplished, are among my heroes.

    But I'll still bet that they couldn't have done what they did without some love being somewhere in the mix.

    Dave V.

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  • David Vrooman
    replied
    I'm sorry, Sam -- I didn't make my "umbrella" point clear (maybe because I'm not entirely clear on the details myself). What I meant was that the Trust would provide us with advice on setting up the NPO, and then then give it their endorsement and some publicity -- our fundraising reach would be greatly extended by such help. You are almost certainly right that the Trust won't want to get into the steamboat business directly (even by just purchasing the boat and contracting out its management), but providing aid and comfort to an NPO is something that some Trust folks proposed even last fall, when their official position was that the DQ would make a nice hotel or museum.

    Dave V.
    Last edited by David Vrooman; 03-24-2009, 10:00 AM. Reason: forgot to sign

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  • Shipyard Sam
    replied
    Salutin' the Flag

    I like your take, Dave, but I do not see the NTHP getting into the steamboat bizz. Supporters, yes, but operators, no. Of course I cannot speak for the Trust, but I was once active enough in that esteemed preservation society to be invited to become an Advisor to the Trust, but, being a poor boatman, I had either the time or money to take advantage of my invite.

    Recently, I was talking to a Vice-President of a small college interested in the river, and we were discussing fund raising for worthy projects. I asked how he would go about doing so and he replied that a plan would be drawn up and sent out to those who might be interested (towboat companies, for example), and if they got excited they would reply. Sort of raising the flag to see who will salute approach.

    From what you have suggested, I feel that a separate and independent NPO be organized and approach the Trust and others for support.

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  • Bob Reynolds
    replied
    David, I agree with much of what you say. However, in your second point you intimate the Greene's had preservationist ideas about steamboating and the DQ. I did not know any of the Greenes, but my take on it is that they were in it for the money. They might have understood what they had better than the last few owners of the DQ, but they ran a business for profit. When things looked bleak for the steamboat business, the Greene Line did drastic things to make their other (packet) boats profitable, but had to tie them up anyway. After Chris's death, Tom and Mary ran the GORDON and the DQ, but when supply exceeded demand, they tied up the GORDON, nostalgia be damned. They went with their "new" non-Mississippi-style boat. They had a large investment in it, and it offered things the travelling public had come to expect: air conditioning and private baths.

    I'm no businessman, but what the Greenes did, what Dennis Trone did, etc. is to take an off-beat product, do it right, make money with it and make it look easy. My bet is they all had quiite a few sleepless nights.

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  • David Vrooman
    replied
    But on the other hand ....

    As some of you have noticed, I found Bill's analysis so penetrating that I offered him my job (to the extent that I can actually do that). However, my training demands that I step back from my enthusiasm and look for factors which might undermine the scenario which all of us embrace so eagerly. Here are some thoughts.

    First, while Bill's supply-and-demand analysis yields only that very positive scenario, we should keep in mind that it describes room supply that is fixed only in the short run. A basic economic principle is that if demand far exceeds supply, new supply will be created -- i.e., either the AQ or the Motel-on-a-Barge (or both) will return. If that happens, the DQ's very handsome profits likely will shrink to near their former level (decent in a good year, marginal in a bad year). Bill's argument is essentially AMIE's justification for their $10 million asking price; when you're selling something, you present the best-case scenario and downplay other possibilities.

    Second, implied by the first point, purchase and operation of the DQ by a purely for-profit new owner is far from a sure thing. A likelier outcome is that she is bought by someone who wants to make a profit, but not a big one --someone who has non-economic, preservationist objectives on his "what-my-life-is-all-about" list. The Greene family were such people, and such people exist today. But they do not live forever; eventually, death or business exigencies end their roles as protectors of the Good Thing. Thus, the DQ eventually will be set adrift again. Travis's Perfect Tow Boat Company may be indeed just we need at the moment, and perhaps for many years. But some time in the future, management will change, and different values may prevail. And so we would return to our current predicament.

    Third, the problem posed by the second point may be addressed by a different ownership alternative: the non-profit foundation. For reasons of both credibility and organizational skill, the umbrella for such a foundation would be the National Trust for Historic Preservation; for reasons that Bill presented so clearly in his political analysis, the Trust is now finally and properly our friend. There are two main advantages to the non-profit ownership option: a.) we solve the continuity issue (stewardship does not die with the DQ's protective owner), and b.) the DQ's profits (excuse me, operating surpluses) are non-taxable, and thus entirely available for maintenance and restorative improvements to the boat -- and contributions to the foundation are individually tax-deductible (while stock purchases are not).

    Finally, I offer a thought as counterpoint to my own argument: this is a lousy time to try to raise money for any foundation. Raelynn and I have seen half of the stock side of our retirement stash evaporate in the past year-and-a-half, so we're good for about half of what we would have donated in October of 2007; I'll guess that most of you are in a similar position. But I still think that the idea merits discussion.

    What think you all?

    Dave V.

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  • Shipyard Sam
    replied
    Sweeten the Pot

    Mr. T., I beg to differ with you concerning your first sentence, "only one 'towboat company' who would be fitted with the talent, knowledge of the waterways, and the forsight to pull something like this off." And the people you are intoning might be the first to agree with me. There are many, many fine towing companies that have all it takes to run first class river operations, including my suggestion, and possess the good sense to bring key people into the mix who would sweeten the pot.

    I totally agree with all the praised heaped on those most stellar of river people, for I have had a long-time association with these good folks- in fact, the Prez of that esteemed operation decked for me during his college days. If they still have interest in pursuing this matter, all I can add is: "Praise the Lord!"

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  • inactive user 02
    replied
    Shipyard,

    I can think of only one "towboat company" who would be fitted with the talent, knowledge of the waterways, and the forsight to pull something like this off.

    They know who they are....and at one time I saw smoke signals from them to just this effect. Their fear at the time was the other two boats being competition. Since they are effectively out of the picture at the moment...times a wastin'!

    Lets all say a respective prayer to our selected deity and hope they read this post like I think they do!

    The same people I am intonating helped Capt Ham alot with the PA DENNY. They are the most stellar of river people and they know what it takes...they would be the perfect match....bar none!

    Travis

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  • Shipyard Sam
    replied
    Towboatin'

    "figure out ways to help an new owner take root and succeed"...

    Reckon the best anyone, on here, could do is book a trip and spread the word.

    Personally, I love to see one, or more, of our fine towboat companies buy the DELTA QUEEN and run her with the same effeciency and grace that they run their towing operations. Read the WWJ and read all the praise heaped onto these outfits. If some-such operator(s) did this as a "hobby" operation, if only to keep steamboatin' and the DQ alive, to begin with, it wouldn't take too long for the DQ to become a profitable investment while being run by river people.

    My former boss, the late "Cappy" Lawson Hamilton took on the PA DENNY under these circumstances and kept her running for about 20 years. Maybe the PAD wasn't the greatest moneymaker, but she was running; providing jobs and spreading joy to several generations of folks eager to ride an authentic paddlewheeler.

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  • David Dewey
    replied
    AHMEN TRAVIS!!
    I missed most of the shows anyway because there was: the river: a lock: a sunset: a big tow going by: uh, the river; uh, the river. . .Oh, and conversations in the engine room! (but some of them were way past most everyone's bedtime!)
    And, at least amongst this group, I'm one of the younger ones!
    S'
    David D.

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  • inactive user 02
    replied
    Bill,

    In your last sentance you say "figure out ways to help an new owner take root and succeed"...since Ambassadors proved their idea wasn't working (and when Delaware North began to try to reinvent the wheel in 2004), I have said this numerous times.

    Being an employee of the last 3 owners I can emphatically agree with your points of the last 3 owners. It was frusterating to watch the last 10 years happen...because the crew of the boats saw the writing on the wall for all 3 of them.

    My sincere hope is we find an owner for the DELTA QUEEN who will make this happen. Without sisters and a need to dominate a market, her charm will be her survival tool. In the 60's and early 70's she was marketed in a way which put her name in the vernacular of most people in the country. If it weren't for the challange of SOLAS in 1966...she would have survived on this alone. With SOLAS, the previous genius of her marketing was what saved her to today.

    With the group of her fans here at steamboats.org, her status as Americas Steamboat, and a good marketing and management firm the DELTA QUEEN can survive and flourish! Plain and simple!

    There will have to be some changes and some here on the board may not agree. What made her a money maker in the past was the simplicity of her operation. There was a very small Entertainment staff, no Tour Manager, two bartenders, good food (but not the huge wait staff and menu there have been the last 3 operators), and alot of commaderie amongst the passengers. What I have always found interesting about the American Canadian Caribbean Line is what the late Luther Blount founded his line on, the Greene Line operations book (make it simple and make it good). Which line survived? The Greene Line could have.

    Before I get attacked on this one I want to say yes, I realize I was part of the large Entertainment staff. I would have not had the opportunity I had to be an employee aboard the DELTA QUEEN with out the inflation of the staff aboard her.

    So Bill, I hope people do support what you are saying on here because we can save the DELTA QUEEN for generations to come. This is a scary time with the boat dockside as a hotel. She won't survive much of this. She needs the care of qualified Engineers, the finesse of skilled Pilots, the spirit of a true Roof Captain, the dedication of a fine crew, and the smiling faces of countless passengers who come to her to experience the true grandure of the river and her place in the history of the American Steamboat. It isn't about a 5 course meal, a themed show, countless lecturers, bingo, crafts, or riverboat gamblers....it is about locks and dams, navigation channels, nature, wild life, and what Mark Twain wrote for us..."I became a traveler, no word ever tasted so good in my mouth". A person comes to her to see America. How about we put the banner back on her stern "Voyages to America"...because in the end, THAT is what it IS all about!

    She ain't a cruise line and she never will be...so stop marketing her to them and get back to the true meaning...she will survive because being used for what she was designed to be, this how she will continue. She isn't a hotel...and she won't be. I feel certain she has already told her current operator that as only she can. I can imagine they have already learned and are trying to accept this as this is written (and are probably throwing money at her bucking of their desires for her in huge amounts).

    Lets support the DELTA QUEEN by finding a new owner for her and getting her back on the rivers where she belongs. Bill, your writings are genius...perhaps you have some the contacts we need to make this happen? Surely, there are some on this board who know people who have some of the money we need to make this happen. Perhaps some of the former crew can assist by reminding us of what the DELTA QUEEN was about in the 50's-early 70's so we can get things back to where they are supposed to be. I know with this guidance and good marketing she will come back stronger than ever before!

    In summation, to quote former owner Letha Cavendish Greene..."Long Live The DELTA QUEEN"!

    Travis
    Former Riverlorian/Discovery Guide and PROUD FRN
    Str. DELTA QUEEN

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  • Paul Penta
    replied
    Originally posted by Bill McCready View Post
    Anyone care to argue?

    Bill McCready

    Hi Bill,

    No argument here. It is a reasoned, thoughtful position.

    Once you get past the political aspect, it's basic. If you want to increase demand, you reduce supply.

    I've seen this happen in the nightclub/restaurant business too many times. A club owner starts off with a nice, small room. Easy to operate, easy to maintain a decent profit margin. He strikes gold. Everybody loves the place.

    He decides that bigger is better so he rents the store next door, knocks down the wall, doubles his capacity but his business stays at the same level. Only now he's got twice the headaches. So he dilutes the product to save money, and in the process loses at lot of what made the original so popular in the first place. The entertainment (of course) is the first segment to suffer. Then food service. Cut the staff, pay them less, resulting in unhappy employees. Cut the portions of food/drinks. And it just spirals down.

    A smaller room fills up faster. It's easier to maintain the energy with a full room. It brings to mind the old Yogi Berra quote. "Nobody goes there anymore. It's too crowded."

    Fewer boats means fewer jobs. I would natually prefer more boats. But that's me being selfish. One boat, one particular boat, is the only vessel that maintains the steamboatin' experience in its purest form. And that's what the Delta Queen Steamboat Company should strive to do. While I love the AQ and learned to love the MQ, the dirty little secret is that the DQ, on her own, can succeed again and chug along the rivers, all by herself.

    I remember my time on the Legendary One with fondness. Part of it stemmed from the feeling that NOLA was mostly concerned with the other two sisters and we just cruised along with minimal attention and interference from the suits. There were times when I felt that they didn't even know where we were without looking it up on the schedule. And that was just fine, thank you.

    In a perfect world, having both the AQ and DQ running would be nice. The MQ, alas, is finished for sure. The beauty of the AQ, coupled with the warm fuzzy you get from the DQ would be great. The thought of the AQ sitting idle breaks my heart. But it's not a perfect world, I guess.

    And the beat goes on.

    Paul

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  • Bill McCready
    replied
    Bill's wrap up & challenge

    I opened this thread---"A different (optimistic) view"---back in January with the encouragement of Franz and (mostly) Carmen. My initial three posts (dated 1/31 - 2/1) took issue with the various explanations for the Delta Queen's failure to gain an 11th congressional exemption. Instead of blaming some combination of fire safety, the Coast Guard, inept ownership, a self-serving congressional chairman and a pair of scorned unions, I put forth the argument that the real reason was bare knuckle partisan politics.

    Having opened with my (alternative) explanation for the impasse, over five weeks lapsed before I posted my reasons for optimism.

    The delay, in large part, was to see if my alternative explanation would survive the combined scrutiny of this forum. While the collective knowledge of Steamboats.org is without equal, this group has also earned a bit of a reputation for being outspoken and/or downright hostile. (Has anyone checked to see if Franz and Carmen have "earned" the scars of veteran cat-herders?)

    My eventual 4 follow-up posts (3/11 - 3/14) shared the reasons for my optimism. In spite of the doom-and-gloom being experienced by others, by my reckoning the current flood stage is receding---and the Delta Queen is now likely to obtain a decisive new owner, an 11th exemption, and a renewed Coast Guard "pass."

    Although my second series of posts elicited a long string of comments, the reasons for my optimism remain unchallenged. Now that the 2008 elections are over (and our national leaders are busy with newer and bigger challenges) the Delta Queen is no longer a useful political pawn. On the contrary, due to our nation's economic meltdown AND the third successive failure of the 3-Queens fleet, I'm optimistic that the Delta Queen will no longer be the hostage of politics OR corporate boardmembers who might sacrifice her in wrong-headed efforts to woo blue-water cruisers.

    In her next life the totally authentic Delta Queen won't need to play second fiddle to a pair of larger replicas that demanded the affection of 4-times more passengers. It was this insatiable hunger for "too many" passengers that caused the various owners of the Delta Queen to waste focus and money in repeated futile efforts to lure passengers away from exciting cruise ships bound for exotic destinations.

    What's next? If we want to again experience the thrill of seeing the Delta Queen come 'round the bend, those of us that follow steamboats.org need to figure out ways that will help a new owner to take root and succeed.

    Anyone care to argue?

    Bill McCready

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  • Keith Tinnin
    replied
    You're so right, Paul. Watching them as their relationship grew on the vessel, and how happy it made Lewis ( and her) , was a real pleasure. And what a beautiful lady she is, a real class act...and what a vocalist! What a life Lewis ahs had since retieing after 26 years as a Kentucky State Trooper...

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  • Paul Penta
    replied
    Originally posted by Keith Tinnin View Post
    Possible the Mark Twain actor was Lewis Hankins, he started in 1989 and was still playing special Steamboatin engagements toward the end. He did a great job, I like him better than Holbrook, but maybe I'm prejudiced in Lewis' favor...
    And I think it appropriate to also mention Lewis' lovely lady, Lynn Roberts. A fantastic singer and performer - just ask Doc Severinson, with whom she has worked in concert several times. A real pro and a dear, dear lady.

    Paul

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