American Queen shifts expansion focus to coastal cruising

HOUMA, La. — While some river cruise lines are
experimenting with new products and special itineraries to lure younger
travelers, American Queen Steamboat Co. (AQSC) chairman and CEO John Waggoner
is taking a different tack: an expansion into adventure and coastal cruising.

The company recently purchased Victory Cruises, which
operates two ships that sail the Great Lakes and the Eastern Seaboard. What the
company didn’t say at the time, however, was that the purchase also included
the charter rights to a new ocean ship that will operate expedition cruises in
Alaska starting in 2021.

Waggoner said the ship, due to launch in 2021, will hold
about 200 passengers, but he offered few other specifics in an interview on a
recent visit to the shipyard here where the Victory ships are being renovated
and the company’s fourth river vessel, the American Countess, is being built
from the hull of an old gambling boat.

Although demand for domestic river cruising is high,
Waggoner said the company’s expansion strategy is currently focused on coastal cruising
more than on riverboats.

“I think it attracts a younger demographic,” he
said. “If we can start getting people in their 40s and 50s and then keep
them through the Great Lakes and our riverboats — the American Empress, the
American Queen — and have customers for 30, 40 years, for us that’s huge
because then you’ve built a sustainable market.”

Several cruise lines in recent years have begun crossing
back and forth between river and ocean vessels as cruising in general has
become one of the fastest-growing segments of the industry. The idea is to lure
more travelers to cruising, then have a range of products to keep them coming
back.

American Cruise Lines, the largest domestic river and
coastal cruise operator, has always operated both. In addition to its six
riverboats, its five coastal ships sail New England, Alaska and the Pacific
Northwest as well as the coastal south. Its parent company also owns Pearl Seas
Cruises, which sails the Great Lakes, 
Canada, New England and Cuba.

Although American Cruise Lines said its target demographic
remains more mature travelers, Ritz-Carlton and Ponant are also adding small
ships to the Great Lakes, underscoring the growing demand for domestic cruises
by a more diverse audience.

When it comes to attracting younger travelers, many European
river lines have focused on adding more active itineraries and different
excursions and onboard activities.  In
fact, Uniworld went so far as to create a millennial-focused brand, U by
Uniworld, with two sleek, black European ships that offer everything from
silent discos to top-deck campouts. The challenge there is in recruiting
younger travelers to a product that is still viewed by many as being for older,
less active travelers.

But with the oldest of the millennials now hitting 40, Chris
Davidson of MMGY said creating different products for different demographics
makes sense.

“From a branding perspective, I’ve always cringed when
marketers espouse the idea that a brand offers something for everybody,”
he said. “In fact, what that tells me is that brand hasn’t yet figured out
how to best meet the unique needs of their various audience segments.”

AQSC currently operates two river vessels, the American
Queen and the American Duchess, on the Ohio, Mississippi and Tennessee rivers.
The American Countess, will join them next year. It also has one ship, the
American Empress, on the Columbia and Snake rivers in the Pacific Northwest.

“People have
said, ‘Well, John, if you just ran 32 back-to-back sold-out trips [on the
Empress] why don’t you put another boat there?” he said. “And my
point is we don’t really want to add more capacity because I think it dilutes
our market. … When you are sold out all the time, you know, it creates that
sense of demand like, ‘If I don’t book now, I’m going to miss my dates.’ That’s
why we’re now on the Great Lakes the Eastern Seaboard and, hopefully, Mexico.”

AQSC is refurbishing the Victory I and Victory II, upgrading
their decor, bedding and public spaces. They will sail with the same crews and
itineraries as before, at least for the first year. But AQSC will be looking to
change things up after that, Waggoner said, including adding more active and
adventure-type itineraries to lure younger travelers.

It also dropped Victory’s plans to sail to Cuba this year
and is hoping to add the Yucatan Peninsula to its winter coastal cruising
lineup.

The Alaska ship will also operate under the Victory brand,
and Waggoner said he is looking at opportunities to add adventure cruises along
the coasts of Mexico’s Baja peninsula and Sea of Cortes and even Costa Rica and
the Galapagos.

So does that mean AQSC’s expansion is focused solely on
ocean cruising?

“The short answer is, I don’t know,” he said. “Because
what we’ve always done is, as we keep filling up one boat, if there’s
additional demand we’ll say, ‘All right, let’s put another boat. So I think we’ll
know by the second year of operation on the Countess if there’s room for a
fourth [river] boat, or should we focus on another market? At that point, we’ll
also know where we are on the Victory cruises.”

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