Fleet's renovation, new Convention and Visitors Bureau marketing plan helps program increase revenue

Since taking ownership of the six Waterway Cruisers in 2011, The Woodlands Convention and Visitors Bureau has renovated the fleet and implemented a marketing plan that has resulted in the program earning a profit for the first 11 months of 2012.

Recently released reports show ridership increased 40 percent in 2012 from 2011, indicating the plan may be working. But ticket sales are still well short of the maintenance and operational costs of the boats.

"I think that we're getting to that point [of breaking even]," Woodlands CVB President Nick Wolda said. "Certainly the goal is for these boats to pay for themselves and through 11 months, they did."

Although the Cruiser program operated at a $27,000 profit for the first 11 months of 2012, ticket sales made up less than half of the total revenue, of which federal grant funding accounted for more than 46 percent.

Wolda said the Waterway Cruisers receive funding through a Federal Transit Administration formula, which requires a local match.

"I wouldn't say the CVB is in this business to make money with those boats; the money that's made is off of the image of The Woodlands," Wolda said. "Those boats are used for marketing purposes in advertising, in special events, in festivals and general leisure tourism."

All operations are funded by a 1 percent hotel occupancy tax increase that was implemented in 2011, totaling about $500,000. The $500,000 is the only tax revenue used to fund boats, with the 1 percent hotel occupancy tax funding CVB operations beginning in 2012. About $204,000 of that money remains, with $240,000 of it used to renovate the six boats in late 2011 and early 2012.

The CVB did not purchase the boats—they were donated by The Woodlands Development Company on Jan. 1, 2011. Wolda said the agreement states the CVB owns and operates the boats for five years with the goal being a break-even operation.

"The Convention and Visitors Bureau board saw those boats and said, 'That is really one of our unique differences why people come here,'" Wolda said. "'They're iconic in nature, they reflect the destination appeal of The Woodlands and we can get those boats free of charge.'"

However, not every board member supported the decision to take over the boats. Township Director Peggy Hausman has consistently voted against the Waterway Cruisers and has opposed the CVB's ownership since the initial decision. Hausman said she would like to see the boats turned over to a private enterprise and for other options to be examined for Waterway usage.

"Would we not be better off to use the Waterway to let people use kayaks and canoes down there?" Hausman said.

Township Director Gordy Bunch, vice chairman of the CVB Board of Directors, was not on the board when it voted to take ownership of the boats, but said he also likely would not have supported the decision.

However, Bunch has been pleased about the improvements the boats have made and said the board is considering adding advertising opportunities on the boats to bring in more non-operating revenue.

"We are in a position right now when they're financially better off than they have been in the past, and there's still a lot of room for improvement," he said.

The CVB has encouraged ridership—at its highest point since 2009—through several initiatives. A one-year contract was signed with Landry's seafood restaurant for catering and special events on the boats. The hours of operation were also cut in 2012 to only weekends and special events, although with more boats running during special events, the overall hours of operation increased from 4,447 in 2011 to 4,810 in 2012.

Wolda said as much as 80 percent of riders are visitors. The CVB board annually reviews the fares and has set prices at $5 per rider this year or $2.50 for children ages 12 and younger and seniors ages 65 and older.

With portions of the Waterway undeveloped, Wolda said the need for the boats could increase with more development, but he could not predict whether the boats will be a break-even operation or whether the CVB would continue to pay for operations if the boats are losing money after five years of ownership.