Re: Coronavirus and Railway Tourism

OK - I'll dive further into this, trying to keep in mind the admin post at the top of the list.

I work for a shortline group in the NW, and so far this hasn't directly affected us. We are recovering from some recent washouts due to flooding where we ended up with record rains on top of mountain snow. We have a fairly diverse traffic mix but the company operates on a tight margin, so it doesn't take much to adversely affect us. The railroad industry as a whole in the US has seen around a 10% decline in traffic volume compared to the previous year which has been a trend for quite a while. There apparently isn't any single reason, but a combination of factors. However I have seen a recent claim that rail intermodal traffic has recently dropped 30%, and I read an article several weeks ago indicating that many container ship sailings were being cancelled due to the lack of demand out of China. Strangely the potentially accelerating traffic downturn due to the coronavirus and other economic factors may actually benefit the company I work for since many of their lines can offer storage for unneeded rail cars which is already part of our business model. I had heard that UP 4014 Big Boy was expected to make a trip to the College World Series and maybe to the Northwest this summer, but it is expected these trips will be cancelled/postponed.

As far as the recreational/historical demonstration railroad and even the static museum business this season, it is obvious (at least to me) that this is going to be a rough season for most if not all operations. The best case scenario is that this health matter is resolved quickly either by it fizzling out or by a medical treatment/vaccine; the worst case scenario might be unimaginable so I will not speculate further on it. Regardless, there is simply no way that any one of us or our governments can predict with any certainty the status of the coronavirus this season, and even if that is quickly resolved what lingering economic impacts may be. As I have stated before, we are all subject to a solid lack of knowledge about this disease, the path it will take and its potential impact on our lives, family, jobs, businesses and hobbies. And part of that path may not be guided by facts, reality and reason; but by chance, ignorance, politics, fear and panic.

So into this storm is what the tourist railroad business must figure out how to try to navigate and survive. Many historical meets, railroadandia and model train shows have already been cancelled or postponed. I've already heard of one tourist rail operation that is holding off on early hiring of seasonal employees. I recall reading an article years ago about how most businesses that have some kind of disaster contingency plan had never considered an economic survival plan. There may not be anything some operations may be able to do other than to suspend operations and figure out how to survive financially until the crisis passes, which is pretty hard to do since too many tourist rail operations barely pay their expenses anyway (too many non-profits), have an extremely high overhead or have already made an investment in the approaching season (advertising, gift shop stock, off-season improvements and maintenance, etc.)

Since simply shutting down and throwing in the towel for this summer isn't a realistic option for most, I offer the following ideas for consideration, trying to be realistic on what is presently known:

1. Be flexible and able to appropriately react to a rapidly changing situation in a timely manner. This should include both the ability to react to a substantial decrease or increase in visitors.

2. If your visitor base is largely international or out of region - start thinking of a Plan B. I am guessing that until this situation greatly diminishes, international traffic is basically going to be at a minimum, particularly for tourists and likely very slow to recover as I expect (with any luck) the US to stabilize the situation faster than the world as a whole. Vacation travel from out of region will largely depend on how widespread the affected areas are. If the coronavirus outbreaks can be shrunk back into a few specific areas, the public might be inclined to resume limited travel in geographic areas that have cleared up. In situations such as this, a refocus of marketing efforts may be needed.

3. No large events for a while. I would say yes to maybe continue planning on events late in summer and into the fall, hoping that the situation will resolve itself by then. But I would be hesitant to make a large investment in promotion and commit to the event until the last minute. Operations that financially are dependent upon large events (such as Thomas as many do) need to consider alternative ideas and maybe consider several smaller events. Hopefully by this Thanksgiving the crisis is over so those that are largely dependent upon Christmas themed trains can run them.

4. "Uncrowd" the trains and facilities. By that I mean consider if a family that just spent two hours in their car together likely won't complain about sitting together, but they don't want to be packed into passenger cars like sardines regardless of how efficient it is or what the reservation demand is. "Social distancing" is the new word where it is being recommended that you stay an arm length from strangers. By not selling out trains and spreading people across facilities, you might potentially help prevent transmitting the coronavirus, but if nothing else will create the impression of not crowding strangers together.

5. CLEAN everything, and do it in view of the visitors. Yes it takes some extra effort, but done properly it does potentially help prevent further contamination and has a positive psychological effect on the visitors also. Be sure you are not presenting a dirty or worn appearance to the visitors.

6. The schedules need to be reduced now, but need to be scalable so that they can be increased as the situation passes and demand increases. If all else fails, be prepared to cancel or postpone as people will understand it's in their best interest.

7. Limit expenses. This may mean holding off hiring new employees, especially seasonal ones. Some or all employees may need to be accept reduced hours/pay in an effort to keep as many valued/experienced employed and the business afloat for when things will eventually recover.

8. I know there are those who are going to hate this one, but if revenue is substantially down and you operate steam, you may have to consider operating diesel in its place in an effort to limit engine expenses to match revenues. Likewise on diesels, too many like to operate the biggest diesel they've got with biggest train possible totally ignoring the fact that the passenger demand is only half. Keep in mind you want to provide the opportunity for social distancing on your trains without running extra cars while using the most cost efficient motive power. This is particularly an issue for those operations that run fixed consists but have variable passenger loads per train.

9. Employees/volunteers - As stated earlier, how can you retain valued/experienced employees as part of the business plan. Operations that depend in part or whole on volunteers often rely heavily on older or retired volunteers which are in the high risk category for coronavirus. Consider their potential exposure and health. Engine, shop and maintenance crews typically have limited interaction with the general public so have a limited exposure. Trainmen, on-board staff, clerks, agents and other public service personnel do have close contact with visitors so it would be unwise to use an employee/volunteer in the high risk group in these positions unless safeguards can be provided. Be sure any employee/volunteer that may be sick does not feel obligated to share whatever they have with everyone else because their help is needed or they need the paycheck.

10. We're in this for the long haul. Create a disaster contingency plan that assumes the worst business case (losing most if not all the season) and create a plan that towards the survival to the beginning of the 2021 season.

Remember that we also have an election coming and a very queasy stock market. The greater economy absolutely hates uncertainty, so regardless of what the coronavirus does there may be a longer lasting economic slump that affects visitor counts into next season as well. But this may also be an opportunity to make lemonade out of lemons - assuming the funding is in place, this might be a good time to take that equipment out of service for rebuilding or do that major project that has been impossible to do because your efforts were focused on running trains and accommodating visitors.

On a lighter note:

A former boss and friend in the railroad industry questions "Doesn't COVID-19 sound like a Union Pacific train symbol to you?"

On another blog someone told the story of the nationwide toilet paper shortage due to panic buying (though there isn't an apparent need for the known symptoms) even in Montana. Someone remarked that "You don't shake hands with someone to keep from getting coronavirus, you don't because you don't know if they've run out of toilet paper!"