BUSINESS MODEL FOR THE OPERATION OF A HISTORICAL PADDLE STEAMER
1. Business Model : Low-cost
2. Operating Area : Firth of Clyde, UK
3. Operational Base : Largs Pier, North Ayrshire
4. Operational Season : May to September inclusive
5. Operational Days : Saturdays, Sundays and Public holidays
6. Operational Limits : Category C and D waters only
7. Operational staffing : Unpaid volunteers
8. Administrative staffing : Unpaid volunteers
9. Administration office : No
10. Ticket sales : At pier on the day of sailing only
11. Charitable status : if possible
12. Cruise Routes : (a) Around the Island of Bute (b) Upper Firth coastal cruise
13. Intermediate stops : No
14. Cruise length : Approximately three hours
15. Catering : Limited
16. Alcohol licence : No
17. Marketing : At pier, website & social media, news & lifestyle media
Business Model : Low-cost
Limited overall financial risk
The business rationale is to operate with the lowest cost base possible consistent with providing a safe and attractive service. If the business does not cover its costs with revenue, the relatively low costs will mean that deficits will be limited. Lower deficits and more likely to be serviceable through other means of support, particularly donations.
Operating Area : Firth of Clyde
Traditional cruising area
Existing customer base
Scenic route opportunities
Relatively sheltered waters
Maintenance facilities available
Potential political support
The Firth of Clyde has a long and unbroken tradition of excursion services with a large pool of customers and supporters. The area combines attractive scenery and relatively benign sailing conditions.
Operational Base : Largs Pier, North Ayrshire
Proximity to main scenic attractions
Suitable pier structure
Good record for successful berthing
Visible location in popular resort
Direct rail link with Glasgow
Good track record for customer numbers
Although Glasgow is the prime location with respect to proximity to potential customers, it is too far away from the chosen cruising area to be considered as a base. Largs is approximately one hour distant from Glasgow by road or rail and has car parking facilities close to the pier .
Operational Season : May to September inclusive
Highest demand in these months, particularly July to mid-August
The cruises are fair-weather only and weather outside these months is likely to be more inclement, but primarily colder and less attractive for customers. Little demand is expected outside these months
Operational Days : Saturdays, Sundays and Public holidays
Highest potential passenger numbers
Greatest potential for crew availability
Reduced wear and tear on the vessel compared will daily operation
The volunteer-only business model would only allow a limited number of cruising days in a season, with weekends likely to have the easiest availability of staff and the highest potential passenger numbers.
Operational Limits : Category C and D waters only
Less stringent requirements for certification
Less potential for uncomfortable conditions for customers
Less potential for cruises being required to be altered due to conditions
Sufficient suitable destinations within these limits
The cost and risks to revenue from class III certification outweigh the benefits. The main sights which will not be seen will be the Arran coast from close-up and Ailsa Craig (which will be seen in the distance on a clear day).
Staffing : Unpaid Volunteers
Low cost and no wage and social security administration
The business model does not allow for the carrying of employment costs. Unavailable expertise would have to be contracted in as required. It is anticipated that the popularity of the ship would lead to the attraction of a large pool of volunteers for operational, administrative, catering and customer service roles. The area has a major maritime tradition and significant involvement in the maritime industry today with a large pool of people with the necessary skills. Whilst many might be retired from employment, others might be available to contribute time at weekends in combination with their full-time employment.
Administration office : No
The business model does not allow for the carrying of central overheads
Ticket sales : At pier on the day of sailing only
Low ticket sales administration
No refund administration
All business, except possibly large group bookings, would be on a walk-up basis. There would be no ticket-selling infrastructure except at the pier and no need to issue refunds. The high capacity of the vessel compared with the expected level of business would mean that very customers, if any, would have to be turned away.
Charitable status : if possible
Greater amount of public and private support
Gift Aid on donations and possibility of donations in lieu of fares
As a not-for-profit company, it may be granted charitable status so long as educational and community benefits are provided. These requirements are consistent with the aims of the business. Gift Aid would increase the business’ income. Charitable status would help make it a suitable recipient of external financial support.
Cruise Routes :
(a) Around the Island of Bute
(b) Upper Firth coastal cruise
These itineraries provide views of most of the main sights on the Firth of Clyde : the Kyles of Bute, Rothesay Bay, views of the north coast of Arran, the Cumbraes and views into Loch Long. The ship should run on so-called signature routes : ones with which she is closely associated and which she sails regularly and consistently. This allows for a standard and simple timetable which can be adhered to with a high degree of confidence.
Intermediate stops : No
No additional berthing fees
Reduced requirements on crew
No damage risk from pier calls
No conflicts with commercial ferry services
No dead time allowing shorter duration or longer distance cruises
Reduced fuel consumption
Having a volunteer crew, it is thought prudent to have no intermediate pier stops, especially where piers can be difficult to berth at and where a significant amount of rope heaving is required. The main piers opposite Largs on the Firth of Clyde are already well served by commercial ferries. The demand for paddle steamer customers to visit these piers and for trips from these piers is limited, although not calling would lead to a modest reduction in potential profitable revenue. Through not offering a service which could legally be deemed as “transportation”, there is the possibility of advantageous use of the Gift Aid scheme to augment revenue.
Cruise length : Approximately three hours
Allows two separate cruises in any day
Gives the option of a three-hour or six-hour day to customers
The option of short cruises is vital to attract walk-up custom, those with time or money constraints and those for whom a full day on the water would be unattractive.
Catering : Limited
Simple operation and management
There must be some provision for food and drink, but this should be a simple operation, primarily with pre-packaged snacks, soft drinks and simple to provide hot beverages. Examples of suitable hot foods would be panini and microwaveable packaged soup. Traditional cooking facilities would be avoided for cost, regulatory and maintenance reasons. The requirements for post-cruise clear-ups should be minimised.
Alcohol licence : No
No licensing costs
Reduced risk of anti-social customer behavior
Reduced requirement for security measures
No expensive liquor stocks
An alcohol selling operation needs to be managed closely and professionally. These tasks are regarded as not suitable for volunteer staff. A stocked bar and stores are also a potential target for thieves.
Marketing : At pier, website & social media, news & lifestyle media
Very low-cost marketing channels, primarily internet based
The vessel has a well-established customer base. The low-cost business model requires relatively low passenger numbers to achieve sustainability. The ship is already well advertised and discussed on social media, mentioned in many tourism-related sites and always a matter of interest for the local news media. The company would have its own website, Facebook, Instagram and Twitter accounts. Billboards at Largs pier and seafront would advertise the service to potential walk-up customers.