Rocky Mountaineer expecting it to take years to rebuild business battered by pandemic

Despite having a suite of COVID-19 protocols to implement, the rail tour company decided not to operate in 2020 and let go about a quarter of its 325-person workforce, while another 25 per cent was given temporary layoffs. The remaining 162 staff have seen reductions in hours, wages and benefits.

The president and CEO of the Rocky Mountaineer said the rail tour company can weather the loss of the 2020 season, but noted it will take years to rebuild the business.

“We were spending tens of millions of dollars on marketing in Western Canada. We will not be anywhere near that for a few years after this,” Rocky Mountaineer president and chief executive officer Steve Sammut told KTW.

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Despite having a suite of COVID-19 protocols to implement, the rail tour company decided not to operate in 2020 and let go about a quarter of its 325-person workforce, while another 25 per cent was given temporary layoffs.

The remaining 162 staff have seen reductions in hours, wages and benefits.

Sammut said the layoffs were difficult to make, but had to be done as the company has already spent money on marketing, but is not bringing in any revenue for 2020.

“That’s what hurts the most, because we have a great team,” he said.

The company hires an additional 500 seasonal employees annually, but due to the pandemic, about 95 per cent were not brought in.

“I think 80 per cent of them were planning to come back from last season, so all these people who were counting on working with us, we don’t have anything for them,” Sammut said.

The Rocky Mountaineer employs between 60 and 65 full-time staff in Kamloops, with an additional 30 to 40 seasonal workers.

Sammut was unsure of the number of Kamloops-specific layoffs.

Kamloops is also home to Rocky Mountaineer’s maintenance, rail operations, engineering, finance, human resources and training teams.

Rocky Mountaineer operates from mid-April to mid-October on three routes through B.C. and Alberta. Tens of thousands of people come to Kamloops aboard its trains each year, with the vast majority staying one night.

The company, which draws international tourists for a glimpse of Western Canada’s Rocky Mountains, estimated it generated between $47 and $49 million of spending in Kamloops in 2017 — figures based on company and passenger spending.

The loss of the 2020 Rocky Mountaineer travel season is poised to leave a 10 per cent hole in Kamloops’ tourism economy, according to Tourism Kamloops. The agency noted guests of the Rocky Mountaineer spend about $50 million in Kamloops — about a tenth of the estimated $500 million spent by tourists in the city each year.

The company obtained additional financing from lenders and nixed external contracts. Sammut is confident the firm has taken the right steps to be able to weather the financial hit in 2020.

Sammut said the 2020 season had to be cancelled because current travel restrictions under COVID-19 and shaken traveller confidence hindered about 85 per cent of the customer base — international travellers who faced deterrents such as limited flight options and two-week quarantines.

In addition, the company didn’t believe it would be able to generate enough demand selling solely to Canadians.

“Canadians are also afraid to travel right now,” Sammut noted.

Sammut said Rocky Mountaineer had at least 70 per cent of its projected sales for the year in place by early March, when the pandemic was declared, as trips are often booked up to18 months in advance.

“Then everything just fell off a ledge,” he said, noting those completed sales won’t be revenue until those guests travel on the Rocky Mountaineer.

The majority of customers have either rebooked or take the credit for a future tour, Sammut told KTW.

Sammut said Rocky Mountaineer’s 325 employees are located between Vancouver and Kamloops, with some sales people working from different parts of the world.

The permanent terminations, he said, were made because the company doesn’t forecast returning to its pre-pandemic operating level, at least not in 2021.

The rail tour company hosts about 100,000 guests per year, but Sammut estimated the number of new travellers next year being about 45,000 due to weakened traveller and customer confidence. Coupled with rebooked guests from 2020, he is hopeful to see about 80,000 people coming through Kamloops next year.

© Kamloops This Week

 


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