PVA:Marketing Excursion Boats Post 9/11

Tuesday, January 28, 2003
Like most of the tourism business, the excursion/dinner boat market took a big "hit" right after 9/11. Markets that were geared for conventions and depended on fly-in business were especially hard hit since airline bookings went into a steep nosedive right after the terrorist attack and customers could not reach the destinations that offered riverboat entertainment.

Most directly impacted by the World Trade Center attack was VIP Yacht Charters, a New York City dining yacht company located a few blocks from the WTC. Minutes after the attack the company immediately began a rescue effort shuttling 40,000-50,000 people across the river to New Jersey and opened their commissary to rescue workers feeding hundreds of workers at no charge. The company found the attack left the infrastructure leading to their docks unusable so they moved their entire office and vessels to New Jersey to stay in business.

Cities such as New Orleans, St. Louis and Cincinnati that have both major convention business and large excursion boat business were especially vulnerable. One New Orleans-based vessel operator declared bankruptcy very shortly after 9/11, claiming that the drop in tourism was at least in part to blame for their demise. Although not an excursion boat business, American Classic Voyages, operators of three overnight steamboats , was a major component of the New Orleans tourism mix with their 3,7 and 10 night steamboat vacations. Their business was especially dependent on airline travel since most of their customers fly in to New Orleans, Memphis, St. Louis or other river cities to begin their cruise.

Adversity is nothing new to excursion boat operators. Their business outside of the south is very seasonal and even in season is impacted by the weather and river conditions. The events of 9/11 were something very new to the tourism business literally with an overnight collapse of tourist visits. Here are a few of their stories:

The Market New Orleans

The Company New Orleans Steamboat

The Executive M. Gordon Stevens III, President and CEO

The New Orleans tourism market that normally operates like a well-oiled machine took an immediate hit right after 9/11. Major conventions were cancelled resulting in very low hotel occupancy rates, empty tour buses and far fewer French Quarter visitors.

The New Orleans Steamboat Company is a major part of the New Orleans tourism industry. The company operates the World-famous Natchez steam-powered paddlewheeler on harbor and dinner cruises daily. The John James Audubon serves as a critical water link between the Aquarium and the Audubon Zoo and is a good Mississippi River sightseeing ride in its own right. The company is also a 50% owner of Gray Line Bus Tours and operates a destination management company called Visit New Orleans.

"We took a major blow, there is no doubt about that," said M. Gordon Stevens III, president and CEO of New Orleans Steamboat. "New Orleans is an international tourist and convention destination and when the airplanes land empty, we feel it immediately," Stevens added.

Fortunately for New Orleans Steamboat and the hundreds of other area tourist and convention-dependent businesses large and small, help was on the way. "The city and state responded in an extremely vigorous and helpful way," Stevens reported.

Marketing campaigns were begun to quickly stimulate the drive-in market to a multi-state area within a several hundred-mile radius. The idea was to get people to drive far enough to spend more than a day in New Orleans so the hotels could benefit. "The campaign was very successful and received plaudits within the industry as a effective marketing campaign," Stevens reported

Within its own realm of operations, New Orleans Steamboat "cut expenses where we could," Stevens said resulting in some permanent cuts that are still helping the bottom line.

More aggressive marketing to local business and fraternal organizations to secure group and charter business was another avenue the company took to boost business. "And like a lot of excursion boat operators, we found extra business in the wedding market," Stevens said.

Stevens also has developed a program with local Boy Scout troops to bring their members onboard for an engine room and pilothouse tour and cruise giving them information about the river so they can earn an Activity Badge.

Developing as much local group business as possible even with a major tourist and convention market "makes a lot of sense to us," Stevens remarked.

Expansion is also on the mind of New Orleans Steamboats. "Memphis is doing a major waterfront development and we may be a part of that which would be a logical expansion for us," Stevens said.

Stevens reports that his company's business today is slightly below pre-9/11 levels, but the outlook for convention business is strong in the coming years as the convention center continues to expand allowing for more simultaneous conventions and the ability to attract the mega-conventions that use huge amounts of exhibit space.

The Market Pittsburgh, Pa.

The Company Gateway Clipper Fleet

The Executive Suzanne Gradisek, Director of Marketing

"We too had a drop in business after 9/11," said Suzanne Gradisek, director of the Gateway Clipper Fleet located in Pittsburgh, Pa. Gateway has six vessels that offer an extraordinary array of scheduled sightseeing, luncheon and dinner cruises. In addition, the company is involved in special theme cruises and a wide scope of charters for almost any event for any age.

"One of our ongoing problems is the confusion that exists in the minds of our customers and potential customers about the threat posed by being on the water as a passenger," Gradisek said.

The Federal Government has warned people about potential threats on blue water cruise ships, but they have never said that the danger is much less on a inland waterway vessel. "That impacts our business," Gradisek believes. "We are not suggesting that it is impossible for a terrorist threat to be carried out on one of our vessels, but the probability that a riverboat would be viewed as a high profile target is lower," Gradisek added.

More than the business negatives posed by terrorist threats, Gradisek believes that the slower economy impacts her charter business with the business community. "We are constantly looking to broaden our business scope, Gradisek

Gateway Clipper is broadening its market by running cruises out of near by Wheeling, W. Va. "It is on a demand basis right now, but the market has promise, "Gradisek said. So does tieing special cruises to educational attractions such as the Pittsburgh Zoo and area locks and dams. The Gateway Clipper Fleet includes six vessels featuring the flagship of the fleet the Majestic, a 1,000-passenger vessel built several years ago by Patti Shipyards, Pensacola, Fla.

The Market Minneapolis-St. Paul, Minn.

The Company Padelford Packet Boat Company

The Executive Gabe Clendeden, Sales Manager

"Immediately after 9/11, the ripples were felt even up here in Minnesota," said Gabe Clendenen, sales manager of the Minneapolis and St. Paul based Padelford Packet Boat Company.

Clendenen indicated that about 50% of his business was from out of town and that business suffered initial with the closure of airports and the dramatic fall off in air travel. Clendenen also noted a dip in Holiday parties at the end of 2001. "It was tough to justify a Holiday party in companies that had laid off a portion of their work force. But it wasn't all doom and gloom in the area economy. The Minneapolis-St. Paul area has a lot of defense work including companies making ordinance for the military and all sorts of electronic guidance devices for these munitions.

"With the defense business up, we concentrated on corporate charters among the companies that were doing well," Clendenen said.

Since 9/11, Padelford has added a major attraction to their four excursion vessels. Last summer the Minnesota Centennial Showboat opened, a permanently moored showboat on a barge adjacent to the company's dock on Harriet Island in St. Paul.

The University of Minnesota Drama Department uses the 209-seat theatre in the summer for drama and musical productions but the rest of the year Padelford uses the showboat's two large function rooms to host meetings, parties and other events.

"For the first time we can operate year-round with the Showboat," Clendenen said. "That is a huge plus for us, not to shut down completely in the winter," Clendenen added. The Showbaot can seat 210 for dinner and 499 in a cocktail party/reception setup.

Padelford basically operates the Showboat for the University of Minnesota handling ticketing for the performances, operating the concession facilities and handling the catering. Padelford personnel also operate the equipment on the barge and are in charge of maintenance.

Padelford Packet Boat founder and excursion boat pioneer Captain William Bowell, Jr. personally supervised the construction of the Minnesota Showboat at Mississippi Marine, Greenville, Miss. Naval Architect Tim Graul of Sturgeon Bay, Wisc. designed the Showboat.

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