AMCV: Hawaii is Key

According to Cruise Industry News growth projections, American Classic Voyages’ (AMCV) overall passenger capacity will more than triple in the next four years, from 110,390 passengers in 2000 to 360,190 passengers in 2004. There will be a significant growth spurt (+62 percent) in 2001 with the first full year of sailing by United States Lines’ (USL) 1,212-passenger Patriot, as well as the arrival of Delta Queen Coastal Voyages’ (DQCV) 226-passenger Cape May Light in May and the 226-passenger Cape Cod Light in August. The next major milestone of growth for the company arrives in 2003 (+38 percent capacity), with the arrival of USL’s first newbuilding in March. A 39 percent increase is expected in 2004.

AMCV’s business mix, in recent years, has been comprised of roughly 60 percent U.S. river cruising/40 percent Hawaii travel. That mix will change dramatically and become much less diversified: by 2004, Hawaii will account for 78 percent of AMCV’s capacity, the U.S. rivers/coastline sector 18 percent.

Thus, the demand for Hawaiian cruising, and the price point dictated by such demand, will become significantly more central to AMCV’s business plan going forward. Rod McLeod, president of AMCV, is confident that the company’s Hawaii business will remain firm following the announcement by Norwegian Cruise Line (NCL) that it too will enter the year-round seven-night Hawaii sector. “It would be a bit of a stretch to say our products are similar,” said McLeod. “Our itinerary is really quite different (spending all seven nights in Hawaiian waters, versus NCL’s four). At the same time, NCL will bring more visibility to the destination.”

Regarding the older American Hawaii Cruises brand, McLeod confirmed, “At whatever point the Independence becomes a drain on cash, we’ll look to dispose of the asset.”

Meanwhile, in the U.S. river/coastal sector, Delta Queen Steamboat Co. saw a four percent capacity rise in 2000 with the arrival of the Columbia Queen into the Pacific Northwest market, an addition to AMCV’s product line which McLeod described as “financially marvelous, despite its late delivery and the startup problems which lasted into July.”

In 2001, AMCV will unveil the first two vessels of the DQCV brand, with primarily seven-night voyages stretching from the Great Lakes to the Southern states. With construction of the first two ships on schedule at Atlantic Marine, AMCV has let options slide for future newbuilds, as it contemplates design changes, including the addition of balconies. “We want to see how the first two vessels perform before we go ahead with the next ones,” said McLeod.

Will there be any new additions on the steamboat side? According to McLeod, ”We now have an internal review underway called ‘Project Puddinhead’ (after the Mark Twain book, Puddinhead Wilson) which involves a thorough examination of the Delta Queen Steamboat Co. ‘s potential, looking at every aspect of the operation. The objective of the project is to answer the question, ‘How do we make the product more relevant to a broader market?’ If we feel confident we can meet that objective, we believe there is an opportunity to grow this brand.” McLeod believes that Delta Queen may begin instituting changes generated by Project Puddinhead in 2001.

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