Doing the Math on CCCVP Operating Costs for V&T Trains

No. 33 -- VIRGINIA AND TRUCKEE RAILWAY -- Nevada Railroad Reconstruction Chronicles

The costs and revenues are moving targets, even in one meeting there were several contradictory numbers put out.

NEWSFLASH: Originally I heard Dwight Millard to say that it would cost the Carson City Convention and Visitor's Polit-Bureau $4000 per weekend to "rent the bus" from the Virginia and Truckee Railroad. I wondered how in the heck the real V&T could make money or even break even, once costs of fuel, employees and wear and tear were factored in. I also thought the train capacity was to be 120, now I hear Millard saying 140. Updated figures are below...


NEWSFLASH PART II: Watching the CCCVP meeting of July 13, later in the meeting Candy Duncan said that the CCCVP was planning on spending $30,000 marketing 24 railroad trips, and only expected to pull in $20,000 in ticket revenues. Numbers are again updated below to reflect these costs, and a new section is added to analyze "the soft bigotry of low expectations."

NEWSFLASH III: I was assuming 24 trains and mapping out numbers assuming they could fill all these trains. Now I hear there will only be Saturday trains after Railfest weekend. So there are only 13 trains this season. Read more for all the conjecture...

NEWSFLASH IV: I just heard Candy Duncan say they are spending $30,000 to market the train, PLUS $20,000 for the VIP reception on Friday August 14, 20009. But when they voted on the marketing budget it was $35,000, plus the $20K for booze.

So the bottom line appears to be the CCCVP will pay $6992 per train, assuming full trains. If they ran at 50% capacity, you'd have $2968 less revenue per train, meaning they'd be paying $9960 per train. With the Commission offsetting $25,000 of these costs at $1923 per train, the CCCVP will be left with a bill for $8037 per train. The total season cost is $104481 at 50% capacity and $77168 at 100% capacity.

LOSE NEARLY $10,000 PER TRAIN THEY PAY TO RUN!!!!

So the ticket prices for the 2009 extended Virginia and Truckee Railroad runs, being done for the Carson City Convention and Visitor's Politburo are:

$48 Adult (round trip)
$36 Child (RT)
$40 senior/veteran

Let's assume that they can sell 140 seats per train. Let's fallaciously assume that every train runs full, and there's 13 trains over twelve weeks.

Let's further assume that for every 140 person trip, 10% are seniors, 50% are adults and 40% are kids.

14 seniors x $40 = $560
56 kids x $36 = $2016
70 adults x $48 = $3360

TOTAL PER TRAIN $5936
SEASON TOTAL $77168

(BUT They are only projecting $20,000 in ticket revenue, so they only plan to run at 26% capacity??????)


Expenses: $4000 per train to the Grays Virginia and Truckee Railroad
$2692 per train for marketing
$300 per train for other expenses (tickets, unknown, etc.)

TOTAL $6992 per train
SEASON TOTAL $90896

I wish them luck. Luck is also what they are getting from the Nevada Commission to Reconstruct the Virginia and Truckee Railway. The Commission has provided a $25,000 subsidy to the CCCVP. I expect the commission will also be paying the costs associated with readying a temporary depot site for the CCCVP. If all the costs were truly accounted for, they would be losing even more money.

But it doesn't matter if they make money or not -- don't forget, this is all about gov't subsidy, not operational profits. They have no incentive to account for all costs and market the event effectively months ahead of time. They will get YOU to pay for it.

And this is all moot, my numbers must be wrong. Respected businessman (real estate developer sitting on unsold houses) and CCCVP Chairman (and V&T Commission Chairman) Dwight Millard said:

"Running that train from here to there will never be profitable for anybody, no matter what you do. You can't charge enough."

See the full post here.