With the relaunch of the 223-passenger paddlewheeler American Empress in Portland, Ore., earlier this month, the American Queen Steamboat Co. (AQSC) officially became a two-ship U.S. river cruise operation. Travel Weekly's Michelle Baran caught up with AQSC Chairman and CEO John Waggoner onboard the American Empress to talk about the company's financial stability and where AQSC and the U.S. river cruise industry are likely headed.
Q: There have been concerns throughout the launch of both the American Queen and the American Empress about AQSC's financial health. Can you address those concerns?
A: So overall, American Queen Steamboat Co. is in the best financial shape we've ever been in. I'll address the three things I've heard questions on. No. 1, if you're in such good financial health, why do you have a paid-in-full discount? I've heard several people say that's a sign that you're starved for cash. A lot of our guests ... if we give them a discount for paying in cash, they'll take that discount. And for us, it just increases the stickiness [of the reservation].
No. 2 was all the hoopla about "Hey, how can you advertise the American Empress if you don't own it?" Our agreement with the Maritime Administration was that we didn't have to close on the vessel until March 1. And in our agreement we made a provision that we could start to advertise the vessel before we ever owned it.
[No. 3], we did a two-for-one [promotion] on only four trips in November and December. On the American Queen and probably on [the Empress], we work better when we're really full. The crew is happier, the shows are fuller. There's a buzz about the boat. And so we had four cruises last year that we discounted, and did two-for-ones. I'll be the first to say, it was an experiment. I don't think it worked out well for us, because I think we alienated some of the travel agents.
Q: AQSC is a new company, and while there's a lot of excitement and buzz around the product, people also want to make sure their bookings are secure. Why should they be?
A: It's HMS Global Maritime [AQSC's parent company] that's basically had to guarantee all those loans anyway. It's not just that we're a two-boat overnight cruise company, we operate a hundred other boats throughout the nation with three other divisions.
Q: You've done your homework, the product has been launched, the destinations are promising, so what are the remaining hurdles?
A: I'll start with this boat. Several travel agents have basically told me, "Look John, we believe in you, we believe in what you're doing, but I am not going to book anyone on the American Empress for the first year. And the reason is, it sat there for five years, four months. So while you tell me it's going to go, I don't know that it's going to go." ... It was the same thing on the American Queen. I think the reason I'm so bullish on this project is it only takes 7,000 people for us to make our entire year. And the fact that you have 600,000 travelers from North America going over to Europe on a European river cruise -- we need 7,000 people here, 20,000 on the American Queen, and we are full for the year.
Q: In terms of possible expansion, what are you thinking?
A: Our next foray will probably be into the Great Lakes and Eastern Seaboard. And then after that, our options are either newbuilds or other renovation projects.
Follow Michelle Baran on Twitter @mbtravelweekly.