Sunday, October 12, 2003

Riverboat business setting new course

Baby boomers target of new marketing plan

By John Byczkowski
The Cincinnati Enquirer

[IMAGE] The stern-wheeler Colonel, from Galveston, Texas, cruises upriver for Tall Stacks with Capt. Sister Joy Manthey, a 46-year-old nun, at the helm.
(Michael E. Keating photo)
| ZOOM |
Denis and Mary Ellen Goodwin flew more than 2,000 miles to Cincinnati in early October, just to spend a week drifting leisurely for 300 miles along the Ohio River.

The Goodwins, retirees from Enumclaw, Wash., stepped off the city's Public Landing to board the R/B River Explorer, a 730-foot cruise barge that will wander up the Ohio for seven days to Marietta and back. They've done Caribbean cruises, and while there's nothing wrong with traveling to sun and sand with 2,000 other passengers, the Goodwins like the idea of seeing America from a vessel that holds just 250 people.

"It's smaller, and you really get to see American rivers," Mary Ellen says. "You're closer to what's going on," says Denis. "You're not 70 miles out."

The Goodwins are model customers for river cruises, an industry trying to find new life in post-Sept. 11 America and following the crippling bankruptcy of its major player.

But as the Tall Stacks festival approaches, the distinctive steamboat silhouettes provide the backdrop for an industry in change, one that is attempting to reach out to baby boomers and their families, while holding on to customers like the Goodwins, retirees with the money and time to travel.

Delta Queen Steamboat Co., the industry leader, calls its new target customer "riverboomers" - a 45-plus crowd that spends $3,000 per person per year on vacations. The company is developing cruises that help "overcome the blue-hair image of the steamboat product," says company executive Bruce Nierenberg, a 35-year veteran of the cruise business. "Fifty-year-olds are not going to go on grandpa's cruise. They just won't do it."

Filling a niche

Riverboats, and especially steamboats, are the Americana of generations gone by. Once plying the Mississippi, Ohio and Missouri with bales of cotton, sacks of sugar and gamblers, most of the paddlewheels have yielded their travelers and cargo to superhighways, jets and ocean liners.

More Tall Stacks coverage
WHAT: Tall Stacks, America's largest gathering of historic steamboats.
WHEN: Wednesday through Sunday.
WHERE: Greater Cincinnati riverfront.
COST: $12-$18 covers five days of riverboat tours and onshore activities. Children 12 and under get in free. Cruise tickets extra. Admission pins available at most Kroger stores; also at events day of. Order online at the Tall Stacks Store, Tower Place downtown; or by phone, toll-free (866) 497-8255.
WHAT'S NEW: The Music, Arts & Heritage Festival.
PARADE OF TALL STACKS: The spectacular event, from 3-5 p.m. Friday, includes 17 riverboats. Watch from the shore as the boats parade down the river. The route begins at Schmidt Field boat ramp and goes past the Serpentine Wall, ending at the public landing.
Two of the majestic Tall Stacks boats regularly cruise through our neck of the river. They are:

Delta Queen
Home ports: Cincinnati; New Orleans, La.
Built: 1926, Glasgow, Scotland
Passenger capacity: 180 (overnight packages)
Length: 285 feet
Levels: 4 decks
Captain: Mike Williams
Amenities: Numerous lounges. Staterooms contain wood paneling, individual climate control, wall-to-wall carpet and private baths. The Delta Queen also boasts rich woodwork, a crystal chandelier and antique furnishings.
Cruisin' through Cincinnati: Oct. 20-25; Oct. 25-Nov. 1; April 23-30, 2004; April 30-May 4, 2004; May 4-10, 2004; May 10-16, 2004; July 30-Aug. 4, 2004; Aug. 4-11, 2004; Oct.12-17, 2004; Oct. 17-22, 2004; Oct. 22-26, 2004; Oct. 26-29, 2004; Oct. 29-Nov. 3, 2004; Nov. 3-12, 2004.
Information: Web site

Mississippi Queen
Home port: Minneapolis
Built: 1976, Jeffersonville, Ind.
Passenger capacity: 436 (overnight packages)
Length: 382 feet
Levels: 7 decks
Captain: Paul Thoeny
Amenities: Every stateroom is individually climate-controlled and has a private bathroom with a shower. Elevators connect six decks. The boat also features a saloon, a lounge, a pool and fitness room.
Cruisin' through Cincinnati: Oct. 20-26; April 22-28, 2004; April 28-May 4, 2004; May 29-June 4, 2004; June 4-9, 2004; June 9-13, 2004; June 13-18, 2004; Aug. 9-16, 2004; Aug. 16-23, 2004.
Information: Web site.

In fact, the river business today is only a speck in the cruise industry. About 7 million Americans do "blue water" cruises every year in the Caribbean and Alaska. The four ships that ply the Mississippi and her tributaries - including the Ohio - can carry only 67,000 passengers each year, if they run at capacity for 52 weeks.

"It's basically a drop in the bucket," says Oivind Mathisen, editor of Cruise Industry News in New York.

But, like a Jerome Kern melody from the epic riverboat musical Showboat, cruising the Mississippi and Ohio has a romantic, if niche, appeal.

"We call ourselves the un-cruise," Nierenberg says. "We don't want to be a cruise product per se. You don't need Dramamine in our boats, and you never lose sight of the shore."

Eddie Conrad, CEO of RiverBarge Excursion Lines Inc., which owns the R/B River Explorer, says the big Caribbean cruises focus "inward," on what passengers can do on board. The river cruises are focused outward, directing passengers' attention to "the shores, the rivers, learning about America's rivers, learning how we navigate them, learning how the locks and dam systems work, learning about the heritage of the regions."

"We operate in seven different geographic regions that afford our guest an opportunity to have very much different experiences through these regions," he says.

No disco, no pool, no kids

Still, the river cruise business has limits. Winter shortens the season. The boats have to be small enough to sail underneath bridges and through locks and dams. Even the biggest of the boats trolling the Mississippi and Ohio - Delta Queen's American Queen - holds just 469 passengers and a crew of 167. Compare that to the Carnival Conquest, in the Carnival Cruise line: 2,974 passengers and 1,125 crewmembers.

That means costs are spread over fewer passengers. It also means they don't have the discos, swimming pools and rock-climbing walls of their Caribbean counterparts, so the cruises are less attractive to families with children.

Debbie Doll of AAA Cincinnati Travel Agency says she can't remember ever booking children on a riverboat. The cost and the accoutrements of the river cruises draw an affluent crowd, on the high side of 50.

Even a three- or four-night cruise will cost you more than a seven-day Caribbean cruise, she says. "Most of the people that are involved in the riverboat cruising are an older clientele, because they remember what river cruising is."

For many of them, that image of river cruising comes from the Delta Queen, a Victorian-styled steamboat launched in 1927. It began sailing the Mississippi in 1947, and was designated a National Historic Landmark in 1989. With its red paddlewheel, white tablecloths and brass fittings, it is the definition of river cruising - and the heart of the industry's conundrum.

Nierenberg says the Delta Queen remains successful. On any cruise, three-quarters of its passengers are repeat customers. "We have always catered here to the 65-plus market," he says. "They're our bread and butter."

Luring boomers aboard

Like many American businesses, the Delta Queen company is trying to lure the wave of aging baby boomers. This is something Nierenberg understands: He was one of the founding partners of Premier Cruise Lines. Their Big Red Boat Disney World cruises helped popularize cruises with families.

Nierenberg was hired after Delaware North Cos. of Buffalo bought the Delta Queen line out of bankruptcy. Delta Queen's former owner, American Classic Voyages Co., ran into financial trouble during a $1 billion expansion, and then was pushed over the edge when the terrorist attacks of 2001 slowed leisure travel to a crawl. The three Delta Queen line ships stopped operating for months, until Delaware North paid $80 million in a May 2002 auction for the line.

The company says that in its best year, 2000, its boats were 96 percent full and revenues were $100 million. This year, it expects to run at 80 percent capacity. It isn't releasing revenue figures, but say it has averaged sales of $2 milliona week for the last six weeks.

One of Nierenberg's goals was to find ways to draw a younger crowd without alienating Delta Queen's core customers. The company's research demonstrated how popular New Orleans is as a vacation destination, so Delta Queen came up with a combination hotel-and-cruise product. The company is moving its largest boat, the American Queen, to the Big Easy, where it will run three- and four-day round-trip river cruises, packaged with several nights at a hotel.

That takes advantage of New Orleans as a tourist draw, and exposes boomers to river cruising. These cruises begin in April 2004. Delta Queen's research, in 11 cities, found "enough passengers to fill the ship 100 percent full 25 times over for the next two years," Nierenberg says.

"If we can tap into the boomers, to get them to start taking river vacations, then you'll need 10 more riverboats. That's going to be the driving population base for the next 30 years."

A Holiday Inn, not the Ritz

RiverBarge Excursion Lines, founded in 1995, came from a different direction: recreational vehicles. Conrad, who has run a New Orleans towboat company since 1963, had been looking for a way to begin moving people instead of cargo. In 1990, he began towing a floating campground - a barge with water, electric and sewage hookups for RVs - that plied the bayous and the Mississippi in Louisiana.

"It's sort of how we cut our teeth in the people-moving business," he says. "A lot of what we learned from the RV (business) was applied to this business - the casualness of it, no dress-up, wearing nametags."

In 1997, Conrad and his investors launched the R/B River Explorer, a towboat pushing two two-level barges with 99 staterooms, a theater, a bar and a restaurant. The Queens, by contrast, are classic steamboats. While the business hasn't always been easy, the company - which won't disclose revenues - had record bookings in July and August, and its latest cruises out of Cincinnati are both sellouts.

If Delta Queen is the un-cruise, then the R/B River Explorer is the un-Delta Queen. It is more like a Holiday Inn and less like the Ritz. Guests can help themselves to drinks and food from the refrigerator 24 hours a day. "It's more relaxing, more casual, more my style," says Jill Daly, a retired cook from Laramie, Wyo., on her second R/B River Explorer cruise. "You don't have to dress up for meals, and you can sit where you want."

Daly sings Conrad's gospel. "A lot of our guests could almost be classified as chronic cruisers," he says. "They've cruised for many years, they've been on all types of vessels. When they find us, they say this is what we've been looking for all along."

Paying to see the heartland

The future for this business is hard to see. RiverBarge is just 5 years old. The Sept. 11 terrorist attacks that all but halted tourism were barely two years ago, and Delta Queen, the river cruise industry leader, has been out of bankruptcy just 18 months.

"Like all new businesses, I think the future at the moment is survival," Conrad says. "But after that we would like to see some growth."

He dreams of a second boat, but has no plans to build one.

"The river cruises have a future as long as they don't do crazy things, like building a whole fleet of them," says Cruise Industry News' Mathisen. Caribbean cruises will always be less expensive, so the river companies must sell their uniqueness. "That, and convincing people to pay a little more to see the American heartland."


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