BC Business
Peter Armstrong is the CEO of the Armstrong Hospitality Group, which owns the Iron Horse of B.C. recreation, Rocky Mountaineer Vacations, the largest privately owned passenger rail service in North America.
B.C.’s tourist-train baron lowers his hefty six-foot-four frame onto a small, oak-finished stackable chair and shimmies himself closer to the table. The seat’s chrome legs grind across the freshly sealed concrete floor and a screech echoes through the new $4.2-million, 17,000-square-foot train station. Peter Armstrong grins and his big, doughy, white-haired frame exudes a boyishness that transcends his 53 years. Armstrong is the CEO of the Armstrong Hospitality Group, which owns Rocky Mountaineer Vacations, the largest privately owned passenger rail service in North America. But in this instant he looks like an oversized high-school kid who has wedged himself into an exam-hall desk. I reach for the tape recorder and he cuts me off. “I don’t want this just to be about me,” he says. “We are a big operation and everyone contributes.” I gently remind him that although there is no “I” in team, there is one in profile. We’re both chuckling as the tape starts rolling. Armstrong grew up on the right side of the tracks. His dad was Nesbitt Thompson’s [now Nesbitt Burns] regional VP for Western Canada and Asia. In 1964, the family moved from Toronto to Oak Street and 19th Avenue in Vancouver. Armstrong attended the upscale private St. George’s School, where he captained the swim and rowing squads. “When I graduated, all my buddies were going off to UBC to become lawyers, accountants or doctors, and I looked at them and thought, ‘I can’t compete with that crowd.’” Instead, he enrolled in BCIT’s hotel management program and spent a couple summers as a doorman at the Hotel Vancouver. The job taught him the fundamentals of the service industry – and a hard lesson about workplace politics. “I went over the head of my assistant manager one night when I was still new at the hotel. He wanted me to tow some cars from the driveway. We were using that curb space as unofficial parking for VIPs – the likes of Peter Bentley, Jack Wasserman and Allan Fotheringham. I took the issue upstairs and the big bosses agreed with me that towing was a bad idea. But later, my shift manager got his revenge by telling me I had to deliver newspapers to all 560 rooms in less than 30 minutes. The first night I did the route, I was covered in sweat and ink and it took me three and a half hours. By the end of the ¬summer, through brute determination, I had hacked that down to half an hour. On the last day of the season, he said, ‘Good effort – the previous best time by an employee is two and a half hours.’” Armstrong laughs at his carefully honed story of tenacity. The account seems almost too polished. Could a towering bellhop of his stature really sprint down hallways withoutdisturbing guests? Then again, people who know the CEO say that when he sets his mind to a problem, he’s like a dog with a bone – a necessary trait for doing battle with his arch-rival VIA Rail. The defining moment of his move from bellhop to bus baron came in 1973, when he and a fellow bellhop noticed that travellers in Vancouver were being turned away by overbooked bus tours. Spying an opportunity, they scraped together their tips and hit up family, raising enough cash to buy two 23-seaters and form Spotlight Tours. Three years later, the company bought the failing airport bus company, Trailways of BC. Then, in 1979, Gray Line’s regional fleet, which was owned by BC Hydro, came up for bid as the province’s first Crown corporation to be privatized. Armstrong, who had worked on deputy premier Grace McCarthy’s campaign, had perfected the art of quiet lobbying. When Trailways won the bid, he became Gray Line’s new president. It wasn’t all smooth tarmac ahead. Armstrong ran the buses for a decade and made a killing at Expo ’86, but one of his partners squeezed him out of the big office and Armstrong ended up stewing in the executive VP seat for three frustrating years before leaving the depot in 1989. Perhaps the best thing to happen to him in those final diesel-scented days was the fam trip he took aboard VIA’s first all-daylight run through the Rockies. [pagebreak] As bizarre as it may seem, back in 1891 when CPR GM W. C. Van Horne gazed upon the peaks of the Rockies and famously pronounced, “If we can’t export the scenery, we will import the tourists,” no one told Mr. Last Spike that for the next 97 years, his trains would chug through the continental divide under a vista-snuffing cloak of night. Such were the scheduling quirks of the time. It was only in 1988 that VIA launched its first all-daylight trains between Vancouver and either Calgary (via Banff) or Jasper. Murray Jackson, then VIA’s VP of marketing and sales, is credited with the Rocky Mountaineer Vacations concept. Armstrong was a guest on that inaugural journey and was so smitten by the idea of a B.C. land cruise on rails that when the Mulroney government cut the service a year later, the unemployed bus boss accepted Jackson’s invitation to meet with a group he was assembling to buy the train. What happened next was loud, messy and described insurprisingly frank details in Paul Grescoe’s Trip of a Lifetime (surprising because the book was commissioned by Armstrong Hospitality Group). Armstrong attended several meetings with Jackson in Vancouver and Montreal. Ideas were exchanged. The ex-Gray Line exec is quoted by Grescoe as saying he did not get a good feeling about the VIA insiders’ plans for Rocky Mountaineer Vacations. “We were just dumbfounded by the things that they didn’t know. They didn’t even know how to structure a deal or when the shareholders were going to be in,” Armstrong says in Grescoe’s book. As the tale is told in Trip of a Lifetime, Armstrong also felt he was being asked to bring a lot of his own money to the table, but would not be rewarded with a seat on the board. Armstrong announced he wanted out. Jackson said okay, and promptly requested his partner’s signature on a letter of confidentiality. Armstrong rebuffed him: “Why would I do that? You know I’ve always had an interest in this train,” he says in the book. Much yelling and screaming ensued in the dining lounge of the Delta Montreal hotel. Armstrong returned to the coast and unveiled his own bid for the train. It won. Flash forward to today, a rainy spring afternoon down on the False Creek Flats. Nothing moves in the rail yard. The only two Rocky Mountaineer Vacations cars in sight are shiny demo models parked outside the new station, which is tucked behind the Home Depot on Terminal Avenue near Clark Drive in Vancouver. (The other 73 pieces of rolling stock winter at a maintenance facility in Kamloops.) Inside the cavernous brick structure, with its cool West Coast minimalist rock-veneer and cedar-batten trim, Armstrong has not unbuttoned his navy blue raincoat. There is no point firing up the furnace in the off-season unless, of course, Rocky Mountaineer Vacations rents the space for a party, which it does for groups of 500 to 1,000 (another revenue spur in the Armstrong Hospitality Group network). Construction workers clang about atop a mezzanine. They are building office space for platform attendants – another phase of the extreme makeover of what was once a CN locomotive repair shed. For several years the building had been derelict, except when the police used it as a shooting range. I ask Armstrong if bullets ever flew at the other end of the rail yard, inside the tight quarters of Pacific Central Station, where Rocky Mountaineer Vacations shared check-in counters with that neo-classical building’s owner, VIA. (Armstrong Hospitality Group still has its head offices there, but is itching to move to a site adjacent to its new station.) He begins on the high track. “I think VIA tries to provide a transportation service and they have some incredibly good staff. In fact, we’ve hired a lot of their former staff.” And then shunts to the gentle grade: “But the private sector can fulfill their mandate better.” The 50 countries around the world that have privatized their passenger trains prove it, he says. “VIA’s ridership has been lagging at around three to four million for well over a decade and I think that number could be doubled or tripled. You only have to look at the example in the U.K., where they’ve privatized and ridership has jumped, revenue has jumped, investment in new equipment has jumped.” [pagebreak] It is no secret that Armstrong would love to get his hands on a transcontinental service or a piece of the busy Windsor-Quebec City corridor. But with VIA enjoying almost $200 million a year in government subsidies, Armstrong says he would need to see a clear indication from the government as to what operating conditions he would be facing. (VIA did not return calls for this story.) He concludes his little anti-VIA tirade by comparing his Goliath competitor to an elaborate charade: “What did Lincoln say? You can fool some of the people all of the time…” For emphasis, he confesses that he’s “mystified” every morning to see the Crown corporation is still in business. I decide not to ask him to rehash his two-year battle against Bill C-26, a care package for VIA that Armstrong Hospitality Group helped derail in 2003 – one that would have put trains from the Crown corporation’s silver fleet on Armstrong’s coveted southern route (Vancouver to Calgary via Banff). Instead, we chat about happier things. He tells me the launch of Rocky Mountaineer Vacations’ new Whistler Mountaineer route has less to do with the approach of the 2010 Games than it does with “being able to grow our business without having to go international.” As a member of the World Trade Tourism Council and the Canadian Tourism Commission, Armstrong also loves talking about the Olympics and other big-picture, travel industry issues. For instance, the border-crossing cards touted by the Americans. We Canadians “brought this situation upon ourselves,” he says. “After 9/11 the U.S. offered us the chance to participate in a North American perimeter initiative and we opted out. Now we have to put up with the consequences.” With his mind on the big picture, Armstrong is the macro-visionary now while his COO, James Terry, oversees the day-to-day stuff, such as the 85,000 mostly well-heeled, older Yank-Brit-Aussie guests toured by Rocky Mountaineer Vacations last year. Even so, Terry says his boss still has incredible passion for the enterprise. “Peter likes to fly at 30,000 feet and take in the full scope of the operation, but you book him for a 20-minute manager-training talk, and an hour later he’s still there rallying the troops. Most presidents, when their babies reach the size of ours, retreat to the ivory tower. But he wants to remain visible and in touch with every part of the company.” According to Rick Antonson, CEO of Tourism Vancouver, Armstrong also wants to be in touch with every part of the globe. In February, the two travel gurus embarked on a two-week jaunt through Libya and Algeria, with a spontaneous side-trip to Malta. Their mission? New scenery for tired eyes. “There is a misperception of Peter as a buttoned-down conservative who only sleeps in five-star shelters,” says Antonson. “That’s not the guy I saw 600 miles south of Tripoli, haranguing our driver to bypass the usual accommodations and press on into the desert so that we could camp in total Saharan solitude. That’s the little-known Peter The Adventurer.” As for the Peter The Tenacious, Antonson, who has watched Armstrong handle numerous tense stand-offs in the business world, says he only once saw the man take a back seat during a confrontation. This was on their Road to Ghardaia trip when their jeep collided head-on with another at the peak of a giant sand dune. “I was relieved to see Peter relinquish his normal urge to be the spokesperson and let our guide handle the crisis. Everyone ended up shaking hands.” And that’s the way I leave him, Armstrong in his new station, glad-handing with the chief janitor, Amir Faritous of City Shine Cleaning Maintenance – a man whose vacuum bags are swollen now that Armstrong Hospitality Group has bought Gray Line’s sightseeing and charter bus operations in Vancouver, Victoria and Banff. Peter the Tenacious has morphed, for a moment, into Peter the Magnanimous. But he’s not about to take his eyes off the horizon.