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When mineral prices and the economy declined, transportation conglomerate White Pass & Yukon Route Railroad (WP&YR) recast its business model from freight to tourism. Revenues gained speed, but the cumbersome UNIX system labored through long lines of customers, discouraged timely reporting, and imprisoned data behind arcane rules and menus. Data had to be typed into an early Microsoft Windows-based financial solution. Arctic Information Technology reengineered business processes and installed a reservation system to keep seats filled with cruise ship tourists. Microsoft Retail Management System was installed to track thousands of daily sales and send daily data to Microsoft Business Solutions?Great Plains (now part of Microsoft Dynamics). Sales rose 13 percent, management cleared out slow-moving items, and managers can use standard and customized reports to save steps and stoke the profit engine.
Situation
White Pass & Yukon Route Railroad (WP&YR) in Skagway, Alaska, exemplifies how a business can evolve products, marketing, and systems to remain profitable during swings in local demographics and the economy. WP&YR was built in 1898 to serve the Klondike Gold Rush and connect Skagway with Whitehorse, Yukon, in Canada to move miners and their supplies through challenging climate and geography. During the 1900s, WP&YR grew to a transportation enterprise with docks, stage coaches, sleighs, buses, paddlewheel boats, trucks, ships, airplanes, hotels, and pipelines. WP&YR is a wholly-owned subsidiary of Tri-White Corporation.
When mineral prices collapsed in 1982, freight operations were suspended. But WP&YR reinvented itself as a tourist attraction, selling 37,000 tourist fares in 1988. In 2004, WP&YR broke its records for total fares and busiest days, carrying more than 400,000 passengers that year, with some days reaching 6,000. Cruise ship arrivals bring 90 percent of fares during the May-to-September season of WP&YR_s 40-mile scenic trip rising from tidewater to 3,000 feet in 90 minutes. Train tickets, gifts, and dock fees from cruise ships have raised revenue to U.S.$32 million annually. Fares are also sold at a busy depot ticket window. The Role of Retail in a Railroad "Retail sales reinforce the brand," says Michael Brandt, Vice President of Marketing and Planning, "and we want every passenger to take home a memory of their visit." These sales bring in $2 million annually in revenue from the selling 1,200 items sold in a four-till store in the depot, a smaller Caboose Store on the railroad dock, a limited gift selection sold during trips, and Web sales sales.
Fourteen retail employees sell memorabilia, collectibles, apparel, train, and video items. The All Aboard magazine on the trains contains many store items to entice buying after the picturesque ride, such as the White Pass video, which brings in 28 percent of retail sales. WP&YR turns inventory about four times a season. Brandt points out, "Because most visitors to Alaska are on their trip of a lifetime, we want their memories of WP&YR to be perfect. We don_t ever want to run out of stock." Slow Lines Due to UNIX-Based System WP&YR_s UNIX system slowed growth at every turn. "Customer satisfaction was uncertain as reservation counts had to be done on a clipboard," says Brandt. "We were always high or low, and either way was bad." The system kept customers waiting. "We lost money when people saw long, slow lines that snaked around the depot and out the door. Credit cards weren_t integrated," explains Brandt. "Then we had no customer histories of who just bought what." Difficult UNIX System Stifled Reporting When WP&YR installed its first financial solution based on the Microsoft? Windows? operating system from Great Plains? Software, staff had to laboriously retype data from the UNIX system, which could not export data correctly. Brandt says, "UNIX required so many keystrokes and menus, and offered no flexibility, that our best reports came from managers_ memories." Discerning inventory levels was also a challenge. "It was so cumbersome to track stock that, when we switched our White Pass video from tapes to DVD, we were left with thousands of tapes. Yet, we ran out of our Pictorial Journey, a cash staple," explains Brandt.
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