he phenomenon of close-in booking that
surfaced shortly after 9/11 is an enormous problem, and many weary
travel CEOs have come to regard it as an act of God that they're
powerless to change.
Of course, as with many complex and vexing problems, there is a
simple solution that, for a thousand perfectly good reasons, can't
be implemented. For instance, it's fairly obvious that people wait
to book because they think the price will drop as the travel date
nears. The simple solution would be to tell the world you guarantee
they won't get a better price by waiting.
The biggest reason not to do this, of course, is that if you
promise no last-minute discounting, you have no flexibility to drop
prices if it begins to look like a tour or cruise is going out
half-empty. Most CEOs find this concern sufficiently
Enter the contrarian, Rick Abramson, president of the Delta
Queen Steamboat Co. He has launched an "Advance Booking Program,"
which is tiered so that very early bookers can get 50% off if they
confirm by a certain date. After that, until the next cut-off date,
they'll get a 25% discount, then 10%. At each level, he promises
passengers that they'll never see a price lower than the one they
It's not that Abramson has nothing to lose by offering the
program, but he's certainly motivated to be experimental. His goal
is to take a company that was in bankruptcy shortly after 9/11 and
bring some black ink to the bottom line.
Abramson acknowledges that he has put himself in a box with the
Advance Booking Program, and he accepts that if it doesn't work, he
may set sail with a lot of empty cabins. Still, he's confidently
predicting that in 2004 he'll have 80% occupancy at yields that
will enable him to break even for the first time since the
bankruptcy, and he notes that the program has already led to a lot
of 2005 business.
It's helpful to remember that Delta Queen is owned by the
Delaware North Cos. (DNC), regarded by the travel industry as "the
consummate outsider" when it appeared out of nowhere to make the
winning bid for Delta Queen. Rick is a company man who began
working for DNC when he was 13 -- he had lied about his age to get
a job selling peanuts in Milwaukee's County Stadium, which the
company owned. DNC never begrudged him the lie, and for the next 35
years he has risen through the ranks, at one time running the
Kennedy Space Center Visitor Complex for DNC and managing some of
their hotels in national and state parks.
In fact, DNC's outsider reputation is only partially deserved.
It's involved in tourist attractions and understands hospitality.
But DNC isn't steeped in conventional industry wisdom, and
steamboats are an unconventional product to begin with. That helped
in conceiving a plan like the Advanced Booking Program. Abramson
feels certain that cruise lines won't match his guarantee -- they
have greater pressures to keep boats full -- and he loves that he
can differentiate the Delta Queen from cruises with a booking
Truth be told, Abramson enjoys outsider status. He likes to call
his product the "un-cruise." Last year, he received criticism for
running ads that portrayed traditional cruises in an unflattering
light, but Abramson -- who calls the reaction "thin-skinned" --
says it's important to differentiate his products from other
"We're a niche player, and we must define the ways we're unlike
typical cruises. I had a similar problem when I ran the Kennedy
Space Center Visitor Complex and people were always wanting to
compare us with Disney World. We met it head on with a billboard
that showed the Earth from space; the caption was, 'It's not such a
small world after all.' "
And that, in a sense, is the message he's trying to send out
once again. One way to move his niche business out of its
relatively small world is to punch at the big guys until people are
convinced he's a worthy opponent. And the Advance Booking Program
seems like a good way to hit 'em where they can't hit back.