Resurrected U.S. river cruise industry continuing expansion

American Queen Steamboat Co. is transforming a former gaming vessel into the all-suite American Duchess.
American Queen Steamboat Co. is transforming a former gaming vessel into the all-suite American Duchess.

When Ambassadors International put its U.S. river cruise business on the block, the move stalled domestic river cruising for four years. But a decade later, several players are breathing new life and profitability into a product that had all but disappeared.

As a result, by the end of this year, U.S. river cruising will have grown from essentially no vessels in 2012 to 10, with plans for even more expansion in the coming years.

"I think [U.S. river cruising has] always worked; it just really depends on who's running the show," said Capt. Joseph Baer, founder, president and CEO of the Covington, Ky.-based Grand Majestic River Co.

Grand Majestic recently purchased the former casino boat Diamond Lady and is investing "many millions" to convert it into a 70-passenger, overnight paddle-wheeler that will launch in September.

"We're a riverboat company," Baer said. "Everybody that's involved with this project comes from the river. ... We're not interested in trying to expand out and become deep-sea cruising. We're making sure that we keep our eye on the ball. We're river people. We know how to show people the river."

Grand Majestic will sail the Ohio and Mississippi rivers as well as several smaller tributaries, with the goal of ultimately doing cruises to Omaha, Neb.; Sioux City, Iowa; Charleston, W.Va.; and the outskirts of Chicago, with the vessel's smaller size enabling it to pass under bridges and sail shallower waters than its competitors.

Grand Majestic is the latest entrant into a market that has continued to grow for the past several years despite the massive hurdles it ran into in the past, including financial shortfalls and technical challenges. It follows French America Line, which launched last year after purchasing the former Columbia Queen and transforming it into the 150-passenger Louisiane.

Prior to that, the two main players restoking the market had been the American Queen Steamboat Co. and American Cruise Lines, both of which have been adding -- and continue to add -- capacity to their U.S. river fleets each year.

Last year, American Queen purchased a former gaming vessel that it is gutting and converting into the all-suite American Duchess, which, when it launches in August, will be the third vessel in the company's river fleet.

The relaunch of the company's flagship vessel, the American Queen, in 2012, marked the rebirth of the Mississippi River cruise industry, resurrecting a business that had gone dormant.

One year later, the company purchased the former Empress of the North and converted it into the Pacific Northwest paddle-wheeler American Empress.

American Cruise Lines, too, has been steadily building up its U.S. river fleet. Unlike its competitors, which are buying existing vessels and refurbishing them, American Cruise Lines has been building its own boats at Chesapeake Shipbuilding in Salisbury, Md.

To date, American Cruise Lines has built three Mississippi paddle-wheelers, the most recent of which was the 185-passenger America, which launched last year.

The company also owns and operates the refurbished Columbia River paddle-wheeler Queen of the West as well as three yacht-style coastal cruisers: the Independence, American Star and American Spirit.

The company has announced ambitious plans to develop a fleet of five modern riverboats for U.S. rivers. The first will be a 200-passenger vessel that the company has said will not be a paddle-wheeler but rather will feature "the modern styling of a European riverboat." It is slated to enter service on the Mississippi in fall 2018, followed by a Pacific Northwest vessel in 2019. 

Also in the Pacific Northwest, UnCruise Adventures sails the 88-passenger Legacy on the Columbia and Snake rivers.

And then there is the Delaware-based Delta Queen Steamboat Co., which is rallying to resurrect the historical 88-passenger paddle-wheeler Delta Queen. It purchased the vessel from Xanterra Parks & Resorts in 2015 and is still lobbying for a congressional exemption for the Delta Queen from fire safety laws. Built in 1926, the vessel currently cannot sail because it has a wooden superstructure.

European river cruise giant Viking River Cruises, too, has teased plans to enter the U.S. river market.

Suddenly, only five years after the U.S. river cruise market was resurrected from the dead, it has become a diverse and dynamic marketplace.

"There are many factors contributing to the popularity of the U.S. [river cruise] business," said Ted Sykes, president and COO of American Queen.

Sykes noted that the sudden rise of U.S. river cruising falls in line with the growth of the river cruising industry in general, which has been driven by a small-ship experience that resonates with customers and by a baby boomer demographic that is interested in "learning" vacations.

He added that U.S. river cruising in particular benefits from those passengers who prefer to travel closer to home to avoid the frustrations of long-haul air travel or who are concerned about medical care or general security elsewhere in the world.

All told, Sykes said, "U.S. river cruises are selling briskly. We can't speak for the other operators, but American Queen Steamboat Co. space is largely selling out. There is ample room for growth. Current passenger carry on U.S. rivers is a sliver of the international carry."

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