SD8 - Excursion Trains as Tourist Attractions in Virginia

Executive Summary:
The 1999 Session of the Virginia General Assembly, through Senate Joint Resolution No. 458 states:

"Requesting the Department of Rail and Public Transportation, in cooperation with the Department of Transportation and the Secretary of Commerce and Trade, to study the operation of excursion trains as tourist attractions in Virginia."

The purpose of this study was to identify any issues that might arise due to the operation of excursion trains as tourist attractions. In order to achieve this, surveys were sent to all states, except Alaska and Hawaii, and to a sampling of excursion train operators. Based on the results of the survey, several issues were identified:

• Property - Access to the property over which to operate must be obtained either by lease, purchase or trackage rights with an existing railroad. If the property is purchased, one set of issues is involved. If it is obtained by lease or trackage rights, then a new set of issues is introduced.

• Equipment - Locomotives and passenger cars must be either purchased or leased to accommodate the anticipated ridership. There are different conditions which must be taken into consideration depending on the type of equipment obtained. For example, a steam locomotive may attract more people but its weight on the tracks increases the maintenance costs and since it was not designed to travel in reverse for long distances, a turning area must be provided, both of which increases the initial cost.

• Liability - Insurance must be purchased to cover the equipment and physical plant. Liability insurance must be obtained to cover employees, passengers and any host railroad. This insurance is expensive and the amount to cover the host railroad is usually dictated by that railroad. According to a major railroad operating in Virginia, for an excursion train to operate on their operating right of way, they would require $200,000,000 in liability insurance. This same railroad also indicated that on some low density lines, they would consider selling the line, but retain the right to carry freight on the line. There are several companies that specialize in writing railroad insurance.

• Personnel - Based on the surveys received from the excursion train operators, personnel costs the largest single expense involved in the operation. A number of the railroads relied heavily on volunteer help to reduce their costs.

• Maintenance - Maintenance must be performed on a scheduled basis for good equipment reliability. The track, track structure and any buildings must be maintained on a regular basis to keep the operation functioning properly. One high maintenance item is a steam locomotive that requires special tools and training to maintain it in top operating condition.

• Capital - A large capital investment is usually required to get the operation started. This is needed for equipment, track structure and property. Although some of these can be leased, up-front funds will still be required. There are very few funding sources that are available for capital costs.

• Attractions - The excursion trains that have high ridership are usually associated in some way with a nationally known attraction or landmark. For example, Manitou & Pikes Peak Ry Co in Colorado carries over 200,000 riders a year to the top of Pikes Peak. The Durango & Silverton Narrow Gauge in Colorado also carries over 200,000 riders a year to the San Juan National Forest, the Rocky Mountains, a museum and the Silverton Mine.

• Public Participation - State and federal agencies have many different roles with excursion trains. These agencies are mostly involved with the regulation of fares and rates as well as assisting the operation in obtaining grant funds and helping out with the marketing. Half of the railroads that responded said there was no state agency involvement, while others had more than one agency involved. Those agencies that were the most involved were the Departments of Tourism and Transportation.

• Advertising - In order to attract riders, the excursion trains must have a good marketing system and advertise effectively. The most common method of advertising used by the excursion trains is the brochure, followed by the newspaper, Internet, magazines and AAA. Even the most popular rides must advertise to maintain their ridership.

• Funding - State and Federal funds are available for studies relating to excursion train operation. "Enhancement" funds have been used to rehabilitate train stations that could be used by excursion trains. The Small Business Administration may have funding available for excursion trains. No specific funding programs have been identified which could be used for the capital costs or operating costs of the excursion train.

Currently the only trains of this type that are still operating are the "special trains" that are operated at seasonal times by the Buckingham Branch Railroad, the Eastern Shore Railroad, the Saltville Railroad, the Virginia Railway Express and Amtrak.

The study shows that there are a number of things to be considered and each of these items has many variables. The burden of running a tourist train operation rests solely on the operating entity. The funding that makes this a reality comes primarily from patrons and not the state or federal government. Close ties to a museum or an attraction are required for any tourist train to survive. Liability issues are of paramount importance and must be resolved in the beginning.