One of the areas in shipbuilding that takes place far from the public eye is financing cruise ship deals. For obvious reasons, Holland America Line doesn’t like to discuss specific figures for all the stuff that goes into building a cruise ship. After all, they wouldn’t want their competitors to find out what they paid for the buttons on the captain’s uniform, right?
ENB sat down with Tim Murphy, director of budgets and planning for Holland America Line, and talked about cruise ship financing in very general terms.
“First, you make an economic decision about whether you need a new ship,” Murphy said. “Then you negotiate a price with the shipyard. Generally, you then make a down payment, usually in the range of 5 percent. Then there is a series of staged payments while the ship is being built, with a final big payoff at the time the ship is delivered.”
Murphy said that Eurodam is being financed by Holland America Line through Carnival Corporation’s ownership of the company. “We are in the enviable position that we can self-finance a new cruise ship due to our parent company’s strong blanace sheet and solid cash flow,” he said.
Another of Murphy’s areas of responsibility is warranties. A cruise ship is a very large, complex machine made up of lots of smaller systems and moving parts, and just like with a new car, the owner is going to want warranties for a set time period in the event that there are problems with any parts or systems.
“Pretty much everything on board that’s not a consumable, like light bulbs and that kind of thing, is under warranty for a year,” said Murphy. “Larger, more complex and more critical systems like the engines or water treatment plant would have an extended warranty.”
Before the line takes possession of the ship from the shipyard, any outstanding warranty issues are negotiated and a pre-delivery list of things that still need to be done such as painting, laying carpet or other cosmetic finishes is made and the shipyard is obligated to finish those tasks as soon as possible.
On the day of the actual delivery, Holland America executives including President and CEO Stein Kruse, Fincantieri representatives including Chairman Corrado Antonini and usually Carnival Corp. Chairman Micky Arison gather in the Crow’s Nest Lounge to review the contract and sign the ownership paperwork.
Then, a Holland America exec on a cell phone says, “Transfer it,” and a Fincantieri exec on a cell phone across the room says,”Ricevuto,” and the transfer from the cruise line’s account into the shipyard’s account of several hundred million dollars begins. After that, there are handshakes and congrats all around, a champagne toast is made and a new ship enters the Holland America Line fleet.
Saturday, January 16, 2010
Cruise Ship Condos… Making your home on the high seas
My home town of San Francisco was recently rated the 3rd most expensive city in the U.S. and the 34th most expensive worldwide. These rankings change frequently, but clearly this is among the places that put household budgets to the test. It’s also one of those places where conventional real estate wisdom breaks down: ordinarily it’s cheaper to buy a house than to rent—but not here. I couldn’t begin to afford a monthly mortgage on my current home, and that doesn’t even take into account the down payment. Although my wife and I have fantasized about buying a home, our income would have to rise dramatically to make that a possibility in this town. This is equally true when talking about houses or condominiums, but condos hold little appeal for me anyway. Even though they might cost a bit less, you pay monthly fees for maintenance of the building and common areas; yet you get less privacy and have less flexibility in how you can use or modify the space.
On the other hand, I love to travel, though the high cost of housing limits the number and length of trips we can take. So I was intrigued by a notion that has sprung up in several forms over the last few years: selling cruise ship cabins as condos. Roughly speaking, the sales pitch is that for just a bit more money than you’d pay for a luxury condo, you can travel the world in style without leaving home—or spending extra on airfare and hotel accommodations. In other words, if you were thinking about buying a condo anyway, if you like to travel, and if your work and lifestyle don’t tie you to a particular location, you can have your cake and eat it too.
Liquid Assets
I oversimplify, of course. For one thing, your average working middle-class couple—an ideal target market for a conventional condo—might run into difficulties living on a ship beyond merely paying for it. Most jobs require employees to show up at a particular location, for instance, and a ship could be less than ideal if you’ve got school-aged children. So retirees and the excessively rich are among those most likely to purchase a condo on a ship. On the other hand, living aboard a ship for a month or two at a time is well within the means of many ordinary, working citizens, and in some cases one can buy fractional ownership of a cabin—very much like a timeshare. Even those who purchase a cabin outright generally maintain land-based homes as well, and spend only a few months of the year on the ship.
When I say “cabin,” by the way, don’t think I’m talking about an ordinary ship’s cabin—as in a smaller and less comfortable hotel room. On the contrary, the homes you can buy on a ship range from simple studios to expansive penthouse suites with four bedrooms, four and a half baths, sweeping verandahs, and every conceivable amenity. Most units have kitchens, though of course you’ll be somewhat limited in where you can shop for groceries. But naturally each ship has numerous restaurants as well, so you needn’t do your own cooking at all.
As just one of 200 or so owners, you’ll have little if any influence over the ship’s itinerary. You can be assured that, over the course of two or three years, your home will visit nearly every major port on the planet, though. Some residential ships make a point of being in Cannes for the annual film festival, in Rio for Carnivale, or in other seasonally appropriate locations. But between ports, tenants may find the range of activities onboard a bit limiting; these ships have fewer shops, shows, and other diversions than vessels of similar size that cater to vacationing tourists. In addition, you’re bound to miss certain conveniences of home, such as a choice of medical and dental facilities, your favorite local businesses, and the proximity of friends and family. On the other hand, you won’t need a car, and you can hardly offer a more attractive vacation getaway for visiting guests.
A Titanic Investment
As of 2006, only one residential cruise ship is already sailing the seven seas: a ship called The World, which launched from Norway in 2002. Several of its units are still available—with prices ranging from US$825,000 to $7 million, plus a 6% annual fee to cover maintenance, utilities, landing privileges on the ship’s helipad, and so forth. If you’re not ready to commit to ownership, you can rent a unit for anywhere from $1,200 to $4,200 per night. The ship features the usual luxuries, such as a casino, a theater, upscale restaurants, and a spa. Unlike ordinary cruise ships, The World typically spends two to five days in each port, giving tenants plenty of time to explore the world off the ship. The itinerary changes each year.
Three other major residential ships are in various stages of preparation. The Four Seasons, a ship owned by and named after the hotel chain, is selling units now with plans to launch in the fall of 2007. Prices go as high as $15 million. On the Orphalese, scheduled to set sail in 2008, you can buy a small, two-bedroom suite for as little as $1.8 million (plus $2,500 monthly); their largest and most luxurious four-bedroom units start at $8.8 million (plus $5,500 per month). And a ship called The Magellan is already selling condos even though construction hasn’t yet begun; the 200 units are priced from $1.8 million to $8 million (with a fractional one-month ownership for as little as $156,250). One perk on the Magellan I find quite appealing is an observatory with an astronomer on staff.
Because I’ll probably never have the sort of money that would make owning a cruise ship condo even a remote possibility, I can’t say whether it would be worth the expense. In some respects, you undoubtedly get what you pay for, but then, I don’t really want or need to be surrounded with luxury all the time. If someone came up with a middle-class condo ship that a mere mortal such as myself could afford, though, I’d certainly consider taking my home with me as I travel the globe..
On the other hand, I love to travel, though the high cost of housing limits the number and length of trips we can take. So I was intrigued by a notion that has sprung up in several forms over the last few years: selling cruise ship cabins as condos. Roughly speaking, the sales pitch is that for just a bit more money than you’d pay for a luxury condo, you can travel the world in style without leaving home—or spending extra on airfare and hotel accommodations. In other words, if you were thinking about buying a condo anyway, if you like to travel, and if your work and lifestyle don’t tie you to a particular location, you can have your cake and eat it too.
Liquid Assets
I oversimplify, of course. For one thing, your average working middle-class couple—an ideal target market for a conventional condo—might run into difficulties living on a ship beyond merely paying for it. Most jobs require employees to show up at a particular location, for instance, and a ship could be less than ideal if you’ve got school-aged children. So retirees and the excessively rich are among those most likely to purchase a condo on a ship. On the other hand, living aboard a ship for a month or two at a time is well within the means of many ordinary, working citizens, and in some cases one can buy fractional ownership of a cabin—very much like a timeshare. Even those who purchase a cabin outright generally maintain land-based homes as well, and spend only a few months of the year on the ship.
When I say “cabin,” by the way, don’t think I’m talking about an ordinary ship’s cabin—as in a smaller and less comfortable hotel room. On the contrary, the homes you can buy on a ship range from simple studios to expansive penthouse suites with four bedrooms, four and a half baths, sweeping verandahs, and every conceivable amenity. Most units have kitchens, though of course you’ll be somewhat limited in where you can shop for groceries. But naturally each ship has numerous restaurants as well, so you needn’t do your own cooking at all.
As just one of 200 or so owners, you’ll have little if any influence over the ship’s itinerary. You can be assured that, over the course of two or three years, your home will visit nearly every major port on the planet, though. Some residential ships make a point of being in Cannes for the annual film festival, in Rio for Carnivale, or in other seasonally appropriate locations. But between ports, tenants may find the range of activities onboard a bit limiting; these ships have fewer shops, shows, and other diversions than vessels of similar size that cater to vacationing tourists. In addition, you’re bound to miss certain conveniences of home, such as a choice of medical and dental facilities, your favorite local businesses, and the proximity of friends and family. On the other hand, you won’t need a car, and you can hardly offer a more attractive vacation getaway for visiting guests.
A Titanic Investment
As of 2006, only one residential cruise ship is already sailing the seven seas: a ship called The World, which launched from Norway in 2002. Several of its units are still available—with prices ranging from US$825,000 to $7 million, plus a 6% annual fee to cover maintenance, utilities, landing privileges on the ship’s helipad, and so forth. If you’re not ready to commit to ownership, you can rent a unit for anywhere from $1,200 to $4,200 per night. The ship features the usual luxuries, such as a casino, a theater, upscale restaurants, and a spa. Unlike ordinary cruise ships, The World typically spends two to five days in each port, giving tenants plenty of time to explore the world off the ship. The itinerary changes each year.
Three other major residential ships are in various stages of preparation. The Four Seasons, a ship owned by and named after the hotel chain, is selling units now with plans to launch in the fall of 2007. Prices go as high as $15 million. On the Orphalese, scheduled to set sail in 2008, you can buy a small, two-bedroom suite for as little as $1.8 million (plus $2,500 monthly); their largest and most luxurious four-bedroom units start at $8.8 million (plus $5,500 per month). And a ship called The Magellan is already selling condos even though construction hasn’t yet begun; the 200 units are priced from $1.8 million to $8 million (with a fractional one-month ownership for as little as $156,250). One perk on the Magellan I find quite appealing is an observatory with an astronomer on staff.
Because I’ll probably never have the sort of money that would make owning a cruise ship condo even a remote possibility, I can’t say whether it would be worth the expense. In some respects, you undoubtedly get what you pay for, but then, I don’t really want or need to be surrounded with luxury all the time. If someone came up with a middle-class condo ship that a mere mortal such as myself could afford, though, I’d certainly consider taking my home with me as I travel the globe..
All Cruise Ships for Sale. You can buy Cruise Ships at low prices..
All Cruise Ships for Sale. You can buy Luxury Cruise Ships at low prices..
Please click on pictures to see full descriptions.
We have many more on file, please enquire for details.
258m Modern Cruise Ship blt 1999 DNV class
2450 pax, 4 startry offers in region $350 Million
60m Luxury Cruise Cat blt 2000 to BV class 80 pass 34 cabins, for charter only, try sale, $12 mil..
613' Cruise Ship 760 Pax 4 star, try Euro 45 Million Rebuilt in 2006
159m Classic Cruise Ship 700 Pax 4 star, Price: try $4 million Beautiful classic, Solas 2005 ideal as a classic hotel ship..
203' Small Cruise Ship 52 Pax 3 star, Price:try €2.5 mil Laid-up Med. refurbished 2006 for time charter or sale
162m Cruise Liner 544 Pax 4 star, try offers Modern interior No SOLAS 2010
131m Cruise Ship 400 Pax, 5 Star, Price: $48 million Blt. 1992 Finland, refurbished 2002 Casino, Karaoke, etc. luxurious! SOLAS 2010
228m Classic Cruise Liner 1438 Pax 4 star Grand Lady! now back at Rotterdam
182m Cruise Ship 1198 Pax, EURO 15 Mil Fully refurbished SOLAS 2010 compliant
149m Classic Cruise Ship
680 Pax, 4 star, withdrawn at present Blt.1967 refurbished the classic at its best...
Please click on pictures to see full descriptions.
We have many more on file, please enquire for details.
2450 pax, 4 startry offers in region $350 Million
228m Classic Cruise Liner 1438 Pax 4 star Grand Lady! now back at Rotterdam
149m Classic Cruise Ship
Buy new 640-ft. Cruise Ship, Bring 1279 Friends
With room for 1280 people at the price of $31 Million, this 640-ft. cruise ship could be the ultimate party yacht. Originally built in Finland in 1970, the cruise ship was extensively redecorated and refurbished in 2005. Aside from being a steal for the price, the ship has got some amenities that caught our attention, such as a disco club, casino (pictured below), large swimming pool with self service restaurant on deck, 5 bars, a gym, 2,400+ person lounges, a main dinning room for 500, 8 passenger decks, 538 rooms, and last but not least, duty free shops. Just imagine the parties you could throw with your own personal cruise ship, and where you could take them. The possibilities are endless. And your credit card limit better be as well if your interested in making this purchase because the gas bill isn’t going to be cheap.
Subscribe to:
Posts (Atom)
