Ship Operator’s Priorities: Profit Before Restoration

Preservationist Diane Rush cringes when she looks at the gift and souvenir shops that were recently installed on the historic deck of the Queen Mary, altering the ship’s original design.

Then she turns her attention to what has not been restored, such as the areas where crew members worked and lived, and the dining area where economy-class passengers ate.

The ship’s operator “is not putting anything into historic preservation,” Rush said. “He keeps trying to market the ship as a shopping mall or as a nightclub.” Rush is president of the Queen Mary Foundation, a nonprofit preservationist organization that has more than 200 members.

But as far as ship operator Joseph F. Prevratil is concerned, the shops and other tourist-oriented additions are a lifeline, the ship’s best chance to stay in Long Beach waters.

It has been a year since the City Council made the controversial, potentially costly decision to refuse a $20-million purchase offer in favor of keeping the landmark in town. As expected, Prevratil is scrambling to keep the ship afloat in rough financial waters.

“Diane Rush would like to see everything in historic preservation if it makes money or not,” said Prevratil, who provides free office space on the Queen Mary for Rush’s organization. “It’s been a difficult year. Everybody’s had a difficult year” because of the recession.

Prevratil insists that historical preservation is still on his agenda, but says the ship must first show a profit before he can spend money on restoration. The ship will probably finish the year about $4 million in the red, but Prevratil said he expects an operating profit next year.

Significant restoration is still about a year away, Prevratil said, and it could be longer if his plan to reverse the ship’s financial fortunes hits a snag.

The last operator of the city-owned ship, the Walt Disney Co., reported it lost millions of dollars annually before closing the ship at the end of last December.

The City Council awarded an operating lease to Prevratil’s nonprofit RMS Foundation Inc., which received a $2-million donation from local philanthropist Robert Gumbiner. Prevratil reopened the Queen Mary in February.

The new operator pinned his plan on one key change. He eliminated the admission fee, which was as high as $17.95 under Disney, in an effort to bring more people onto the ship. Once aboard, visitors were expected to spend money at the Queen Mary’s restaurants, shops and newly installed children’s rides.

But the plan did not work. Waves of people washed over the decks but many kept their wallets in their pockets.

Faced with anemic revenues, Prevratil decided last August to begin charging $5 admission for adults and $3 for children. Visitors were given “Queen Mary dollars” of equal value to spend aboard the ship.

Then Prevratil eliminated the Queen Mary dollars, signaling rougher financial waters. He also closed a dockside complex of shops and restaurants for the winter months, and moved some of the merchants aboard the Queen Mary.

Attendance has met projections and is expected to top 1 million this year, Prevratil said. He attributes the losses to start-up costs and to lost revenue from the free admission policy.

Some merchants on the ship are having a tough time as well. “I think because of the recession, it’s probably slower,” said Mary Martin, who owns the Greensleeves Boutique aboard the Queen Mary.

Nevertheless, Prevratil said he is optimistic the ship can survive.

Gumbiner’s $2-million donation has been spent, but Prevratil said he expects to secure a $2-million to $3-million loan this week to keep the ship running until the busier summer season. The operator said he is planning new attractions, but declined to release details.

As for historic preservation, Prevratil said he plans to start a nationwide fund-raising campaign next year and seek grants to restore portions of the ship.

Prevratil estimates that his organization will end the year having spent $4 million to $5 million on maintenance, such as refinishing the ship’s wood railings.