Mississippi Riverboat Firm Navigates to Success : Cruises: The Delta Queen Steamboat Co. plans to put the largest vessel of its kind into service between Pittsburgh and New Orleans.

Why in the era of cheap airline fares would anyone spend $9,400 to take a boat from Pittsburgh to New Orleans?

Never underestimate the lure of a Mark Twain trip on a paddle-wheeler.

The Mississippi riverboat business is booming, with travelers willing to spend big on five- or 16-night cruises. Demand is so high that Delta Queen Steamboat Co. has spent $65 million to build the largest steamboat ever, the 418-foot American Queen.

Travelers are lured by the ambience of the big ships.

“The trick for us is in the way we treat our passengers. When people are paying $250 a night, it’s not so much the ship’s facilities, but the sincerity of the crew that serves them and how they are served,” said Delta Queen President Jeffrey Krieda.

The new steamer is now in river trials and begins service June 27 with a 16-night cruise from Pittsburgh to New Orleans. It will join the company’s two other overnight riverboats, the Delta Queen and the Mississippi Queen.

The American Queen is the product of success and fear.

“We were getting a reputation with travel agents of ‘don’t call them, they’re always booked.’ And that could have resulted in lost bookings,” Krieda said.

The steamboat company is a subsidiary of Chicago-based American Classic Voyages Co., which also owns 80% of American Hawaii Cruises, another steamboat operator.

Krieda, who worked previously for Braniff Airways and Texas Air Corp., arrived at Delta Queen in 1989 and found the company hovering around the break-even line.

About 80% of its two boats’ space was routinely booked. But Delta Queen needed to book more rooms and increase its fares, although they already were some of the highest for domestic vacations, Krieda said.

Currently, a five-night steamboat journey costs anywhere from $740 to $3,030 per passenger. The 16-night voyage aboard the American Queen in a top-of-the line room runs $9,420.

After a marketing campaign aimed around the company’s 100th anniversary in 1990 and customer service training for workers, business surged, following the adage of “satisfied customers always tell their friends.” Now, about 25% of the company’s first-time passengers have had cruises recommended to them by a friend or relative, Krieda said.

Delta Queen has a strong spot in the travel market, said James V. Cammisa Jr., a Miami-based industry analyst.

“It’s an entertainment-oriented product,” Cammisa said. “If there’s any driving force in travel today, it’s entertainment. Whether you look at New Orleans, Las Vegas, Branson [Mo.] or Disney World, that’s where the growth is.”

The company posted a $9.2 million profit for the 1992-93 fiscal year as revenue grew from $38.5 million to $66.7 million and the boats were 92% full.

Then came the flooding of the upper Mississippi River in 1993. Only a few cruises on that waterway were disrupted, and cruises on other rivers were not affected at all.

But the public’s link between Delta Queen and the Mississippi led to a sharp drop in bookings--about the time the company was faced with a 70% rise in potential capacity from the arrival of the American Queen.

“From ’89 to ‘92, it was like shooting fish in a barrel,” Krieda said. “Everything we did was right. The flood of ’93 sort of pulled the rug out from under us.”

The American Queen has been the subject of two years worth of media attention from construction at the McDermott shipyard in Amelia, La., to its arrival in New Orleans on May 4.

By April 7, the American Queen’s advance bookings had generated $15 million in net revenue, while bookings for the Mississippi Queen and Delta Queen were largely unchanged from the previous year at $35.2 million.

The company expects a 50% increase in passenger nights this year and perhaps the same rate of growth in 1996, Krieda said.

For the fiscal year ending Dec. 31, American Classic Voyages lost $983,000, compared with a $4.2 million profit for 1993. However, $5.69 million was spent to refurbish one of its Hawaiian cruisers.

Krieda would not speculate much on the possibility of a fourth steamboat in the future, although his target clientele--the over-50 crowd--will be one of the fastest growing in number.

“They’re positioned in a sector of the travel market that is growing very rapidly,” analyst Cammisa said.