GASC Brochure

A couple points of interest after reading the brochure -

* prices are HIGH! Rates start at $995 per person for three nights in the lowest accommodation

* similar to Azamara, GASC is including wine at dinner, bottled water and soda in the fare. Gratuities are still extra

* similar to Regent, GASC is including shore excursions if booked before the end of the year. I'm not sure if this will continue or is a limited offer.

* specialty restaurants have been added, but are at no additional cost (similar to Oceania)

* GASC will charge a $100 per person "administration fee" to cancel, even if you are outside of the normal cancelation penalty period. Basically you better be sure you want to go, or plan on losing a hundred bucks each. This is very unusual for a US based cruise line. Cunard tried this policy in the US a few years back and it failed miserably. I understand it's fairly typical for European based lines ... which obviously GASC is not.

Anyway I do wish them well. They are starting out in a really tough business environment. Personally I think it's going to be very difficult to obtain the per diems they are aiming for, even with the extra value-adds they are including.

As much as I would love to do the B2B 9-nights r/t from Pittsburgh next July for my birthday the rates, as Ernie mentioned, are quite steep. Even with a single occupancy surcharge that seems to be around 140-150%, that cruise with gratuities would cost me $4000 for a tiny, cramped cabin with a tiny single-sized bed. I do however like the fact that the rate includes 1-night pre- or post-cruise 'luxury' hotel which I could do before and after, easily taking the shuttle up from Clarksburg.

I know it's not comparing apples to apples, but I'm not even spending anywhere close to that amount of money (all my expenses complete, door to door) for my cruise and vacation that I currently still have planned and it's 17 days with r/t airfare, 10-nights ocean-view on the Celebrity Millennium, 6 nights in hotels pre- and post-cruise, Amtrak to Tampa, 2 days of sightseeing at Walt Disney World, as well as hanging out at Clearwater Beach for a couple of days.

Being a totally American-operated product leads to high costs, especially on a relatively small vessel, where there isn't a lot of room to spread out the costs among hundreds of cabins. This is also true of the small US coastal cruise lines, like American Cruise Line; my clients are usually shocked to find per diems of several hundred dollars per person.

I wish GASC well, but their product and marketability must walk a fine line. Many people with the means do not wish to spend time and money on such a product, while many people who are enticed by the product do not have the means or do not wish to spend so much on a cruise vacation.

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Originally posted by Linerrich:
These rates are in line with what Delta Queen Steamboat used to charge;

Rich

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Yes, and we all know how they ended up, and those that followed. What will make GASC different? Well hopefully the quality of the product, the more inclusive aspect of the value-adds, and successful marketing. If it will be enough I don't know. In this economy i just dont know if many people are willing to spend $661 a night for two people in a minimum standard inside cabin? There are a lot of other options that come into play when you start talking about that kind of money.

I think many people might get sticker shock when they see those prices, and of course it's for an unknown company and product as well. No one knows yet just how well run the operation will be. The reputation has yet to be established, and usually those types of per diems demand a tried and true product with a proven reputation. I think I might have personally introduced some attractive introductory fares, even at a loss, to attract attention and interest, build the reputation of the product, then gradually increase the per diem.

No doubt GASC will get business from die hard steamboat fans in the beginning, willing to sail at any cost, but then what? I do wish GASC the best, but I'm a little concerned about how they are positioning themselves. Hopefully they have the right strategy of balancing value with cost and will be a roaring success! For me I won't be sailing unless the per diem is substantially lower. I've never had a great interestin doing an American river cruise, but my enthuisium has recently peaked but not quite enough to dish over what GASC is asking for.

The entry barrier to budget cruise lines is all but closed where the Big 3 cruise lines and MSC can drop prices at any time to fill the ships.

In this economy the rich are still rich and taking high end cruises as if the recession never happened.

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Originally posted by desirod7:

In this economy the rich are still rich and taking high end cruises as if the recession never happened.
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Well I don't really see GASC as a high end cruise line for the rich. I would not call cabins on AMERICAN QUEEN "luxurious" either. Comfortable yes.

Wealthy people are still cruising yes, but even they expect to cruise at relatively bargain prices these days with even more amenities included. I receive mailings every week from Silversea, Regent, Seabourn, and especially Oceania offering heavily discounted prices. These lines have to throw in even more to sweeten the pot and attract buyers.

No doubt GASC has experienced people running it (many from DQSC) but the one advantage they lack is economy of scale combined with extremely high operating costs. I truly hope they can make a go of it, but I think it's going to be very challenging especially in this global recession.

As for charters and incentives, most large companies that can afford these types of onsite meetings have greatly scaled back. It's hard to justify them when you are laying off employees.

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Originally posted by eroller:

As for charters and incentives, most large companies that can afford these types of onsite meetings have greatly scaled back. It's hard to justify them when you are laying off employees.

Ernie

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Originally posted by desirod7:

I am thinking trade associations too. Many go to the local Hilton or Marriott.

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I suppose so, especially if GASC is willing to let some associations have meetings onboard for the day without actually sailing. That might impact the enjoyment of the ship by the rest of the passengers though. I'm also not sure how well equipped AMERICAN QUEEN is outfitted for meetings, etc. Anyway it would certainly be a way to supplement income.

I sincerely hope that GASC has long term viability. They have a great team in place but sometimes that is just not enough. Hopefully they have learned why their predecessors eventually failed and they have a business plan that addresses this. Strong financial backing is another important aspect, especially for the first few years when typically there can be losses. I think they are well funded so that is a good thing.

Best wishes to them ... and I'm looking forward to sailing on AMERICAN QUEEN ... when the price is right.

The National Review has a cruise charter on HAL once a year. I have suggested a short cruise for the trade association I belong to, and the response was they can get people for one of three days, but hard for 3 full days.

Most of the modern cruise ships have state of the art conference facilities, and space for private events.

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Originally posted by eroller:

I suppose so, especially if GASC is willing to let some associations have meetings onboard for the day without actually sailing. That might impact the enjoyment of the ship by the rest of the passengers though. I'm also not sure how well equipped AMERICAN QUEEN is outfitted for meetings, etc. Anyway it would certainly be a way to supplement income.

I sincerely hope that GASC has long term viability. They have a great team in place but sometimes that is just not enough. Hopefully they have learned why their predecessors eventually failed and they have a business plan that addresses this. Strong financial backing is another important aspect, especially for the first few years when typically there can be losses. I think they are well funded so that is a good thing.

Best wishes to them ... and I'm looking forward to sailing on AMERICAN QUEEN ... when the price is right.

Ernie

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Originally posted by desirod7:

Most of the modern cruise ships have state of the art conference facilities, and space for private events.

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AMERICAN QUEEN is a relatively small ship. Closing off a lounge would have much more of an impact than say a modern cruise ship carrying 2000 pax. Looking at the deck plan I don't see too many options for meetings. There is a small theater that might work (enclosed with no windows) and the Grand Saloon but I'm not sure that would be an ideal venue.

When NCL built PRIDE OF AMERICA, they built her with meetings and incentives in mind. The ship has the largest meeting facility afloat, and not down in the bowels of the ship but right up top where an observation lounge would be. With the ship being registered in the US, this meant that corporations could take advantage of tax breaks and the ship should be ideal for these venues. Unfortunately that lounge sits empty most of the time along with the beautiful bar next to it (nicest on the ship IMO).

It didn't pan out quite as NCL has hoped, and I hear there are now plans to covert the meeting room to suites which would provide more revenue. Most companies are just not willing to pay for elaborate offsite meetings and incentives these days. I suppose that is mostly a thing of the past unless the economy drastically changes.

I have no idea what GASC's expenditures are, but based on my calculations it appears they are trying to gross about $233,628 a day in ticket sales. Their season for 2012 is 266 days so that would mean $62,145,048 in gross ticket sale revenue for 2012, *if* every cabin were sold at the brochure price. Of course I have no way of knowing what they expect to sell in onboard revenue.

I wonder what they are projecting for salaries, sales and marketing, leasing office space (and related expenditures), distribution costs, fuel, maintenance, hotel operations (ie: food, software, etc), and port fees. I'm thinking even with their per diems being quite high, their expenses must be quite high as well.

It would be interesting to see how this compares to a mass-market line that has economy of scale.

Ernie

[ 09-19-2011: Message edited by: eroller ]

The $100 policy is also, as you say, a lot less bad than any European line. Also the lines all of course had different policies. In the past few years I've had to cancel 2 different cruises. The one booked in the UK cost 25% deposit, that from the US $0. The UK one was cancelled 6 months in advance, possibly more. I guess thats what travel insurance is for but I certainly wish Europe had US lines' policies and prices. I hope that the huge competition will eventually bring that about.

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Originally posted by Matts:
Nice brochure. Ernie, I'm interested in your view that prices are high.

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Well not being from the US the prices may not seem that high to you. In general, in the US we are very lucky with cruise prices as generally they are dirt cheap. I'm in London every weekend and looking at some travel agents there it appears cruise prices are dropping in the UK as well. That is the benefit of a market build-up, but there are negatives too. Back on topic, I do realize that GASC is a niche brand and will appeal to a niche market, and perhaps it's not fair to compare pricing to say Celebrity or Holland America, but none the less many people will compare GASC prices with that of a traditional cruise when they make their vacation decision. As an example, on certain dates for a 7-day Caribbean cruise on HAL or Celebrity, the lead-in cruise fare is less than $500 per person. On GASC you will pay almost double that for a 3-day cruise. I can also stay at some very exclusive resort hotels (Ritz Carlton, Four Seasons, St Regis) for less than the $661 a night for two that GASC is charging, in far more luxurious accommodations. With money being very tight for a lot of people right now, they are looking at every option of how to use their hard earned vacation dollars. Price and value are very important. GASC is adding value which is great, but I still feel they have priced themselves out of reach of many potential customers.

I think what probably comes close to GASC in pricing is Disney. People are willing to pay high prices for Disney (including me), but the reputation is already established and most people know that Disney really delivers the quality and magic. GASC doesn't have the luxury of a Disney style reputation, at least not yet.

It's also interesting to note in the press release they specifically mention larger cabins and a faster speed (allowing for better itineraries) "than any past Mississippi riverboat". I wonder who they could mean by that? ;-)

Ernie

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FOR IMMEDIATE RELEASE American Cruise Lines to Feature Expanded Entertainment Aboard Queen of the Mississippi

GUILFORD, CT – September 20, 2011 – American Cruise Lines (www.americancruiselines.com), the leader in small ship cruising, today announced plans for an extensive entertainment program for its 2012 Mississippi River itineraries aboard the brand new authentic sternwheeler, Queen of the Mississippi, currently being built in Salisbury, Maryland. The program will feature entertainment reminiscent of America’s legendary steamboating era. The grandest riverboat to ever grace the Mississippi, the sternwheeler will be a floating palace filled with luxuries and pleasures, and will certainly accommodate passengers who enjoy dancing and live entertainment and have a passion for the deep history of the mighty Mississippi and its river towns.
One of the seven lounges planned for Queen of the Mississippi, guests will enjoy getting together in the Paddlewheel Lounge, a festive, comfortable and luxurious sitting area where they will enjoy the sultry sounds of solo acts or live music of Dixieland bands, and dancing and laughing with new friends. Passengers will be able to play the calliope or enjoy a drink in the Calliope Lounge; step back in time with a Mark Twain impersonator or share stories with onboard experts and lecturers who will educate, captivate and entertain Queen of the Mississippi’s passengers.

“The entertainment on Queen of the Mississippi will be substantial,” said Timothy Beebe, Vice President, American Cruise Lines. “It’s an important element of our Mississippi cruises and we look forward to offering passengers the best entertainment program; one that will truly take them back in time and have them talking about for years to come.”
Dependent on itinerary, Queen of the Mississippi will feature shows featuring spectacular costumes and entertainers as talented as they come. Specific details of the entertainment program will be available in the near future such as entertainers, lecturers, music programs and more.

The Queen of the Mississippi will boast 75 staterooms larger than those on any former Mississippi riverboat, spacious private balconies and all of the amenities today’s travelers expect, while maintaining the elegance and traditional Victorian luxury of classic turn of the century Mississippi riverboats. American Cruise Lines will operate the authentic sternwheeler over the entire Mississippi River System, with the option of cruising at significantly higher speeds than any past Mississippi riverboat to make more itineraries possible than ever before on the Mississippi River, with longer visits to the river towns and less night traveling, especially on upriver itineraries. A number of unique 7-, 10-, and 14-day cruises are planned that take passengers as far north as St. Paul, MN on the Mississippi River and as far east as Pittsburgh, PA on the Ohio River.

I can't see the boat being filled during late June out of New Orleans. The heat and humidity are horrid. November and December as the boat ping-pongs back and forth on seven night trips between Memphis and New Orleans will be impossible to fill at existing rates. Say a low pressure sets up over the lower Mississippi there could be rain, fog, sleet and ice for the whole week...not at all pleasant. Also the company has her scheduled on the upper Mississippi into early November. Those final few voyages could be interesting. First of all, there could be snow, and I mean inches not a dusting or a few flakes. Second by early November the leaves will probably be all on the ground, and there will be lock delays. During the winter the upper Mississippi can freeze over, so the barge lines by November are scrambling to get all of their barges into warmer climes.

I am impressed with the announced improvements in the cruise experience. The dining options have been greatly expanded over what was offered before Katrina, during The Delta Queen Steamboat Company's halcyon days. It appears as if the entertainment staff will once again be able to provide entertainment that is in line with the prices charged. Atleast some of the old faces will be returning as crew, which is good. And numerous other little things being included seem nice, such as complimentary wine with dinner.

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Originally posted by Atlcruiser:
Nice brochure Ernie. We have decided to give river cruising a try next year. We are taking a new vessel AMA Waterways AMACerto. This will be huge change for us going from mega ocean cruising ships to something much more intimate but I think it will a nice way to see some sights in Europe in a much more relaxed atmosphere. On AMA wine, beer and soft drinks are also included at diner.

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I look forward to hearing all about it. Chris and I have also considered a European river cruise and I'm sure it will happen one of these days. I have heard good things about AMA.