Unlike fractional ownership of aircraft and houseboats, fractional owners of a cruise ship can all use the ship simultaneously. There is plenty of room for you and the other owners to live on the ship any time you want, or all the time. You can use it as a complete-time residence, and so can the other co-owners.
The first obvious assistance of shared ownership is acquisition cost. There are many cruise ships on the market in all price ranges, sizes, ages, and conditions. There are many smaller and older cruise ships obtainable for less than one million dollars. At the lower end, some smaller cruise ships in fair condition can be acquired for about $250,000. At the highest end, the biggest new mega cruise ships now cost about $500 million to build.
Do the math. If one hundred buyers pool resources in exchange for a percentage of ship ownership, the acquisition cost will be divided by that same number. One percent ownership of a $250,000 cruise ship would cost a insignificant $2500 for ship acquisition. At the other end of the extent, one percent ownership of a brand new mega cruise ship would cost five million dollars.
There are some other figures that must be tabulated into the total cost of ownership. Acquisition cost is first and foremost. The next figure is the cost to put the ship in service. On an older ship this cost may be higher than the acquisition cost. however, the cost to put a ship into service can be much lower if you were to get a good deal on a ship that already meets the international standards for ship safety, especially SOLAS (Safety of Life at Sea). Maintaining compliance with Chapter II SOLAS 74 amendments is cost prohibitive for some older ships and they are typically scrapped instead of being refurbished at great expense. There is a very important SOLAS implementation date coming up on January 10, 2010. On that date all commercial international ships will be required to be in compliance with the new fire safety codes. The most important new codes deal with the use of combustible materials in the ship. It will be expensive to replace all combustible materials in ships with non-combustible or flame resistant SOLAS compliant materials that meet the new safety standards. This will consequence in many ships being sold for fragment metal.
The looming SOLAS 2010 implementation date offers both perils and opportunities. The biggest peril is the possibility that the expense to bring a ship into complete compliance with international standards will be greater than the value of the ship. However, there is a silver lining in this cloud. This pending SOLAS implementation date has already started to show up as a dominant factor in the asking and selling prices of ships on the market today.
SOLAS 2010 also offers a tremendous opportunity for those who may prefer to have a very large houseboat instead of a commercial ship. Ships that are not in compliance with SOLAS 2010 are now selling for a song (inexpensively). A cruise ship can easily be converted into a megayacht with the stroke of a pen. Privately owned yachts, not in commercial service, and not carrying passengers or cargo for hire are exempt from many of the SOLAS requirements. Operating costs are also lower for a private yacht. It cost less to register, flag, and insure a private yacht. Megayachts can be flagged and classified for unlimited service. That method that a megayacht can go nearly anywhere you want it to go. There is one major drawback to registering a cruise ship as a private yacht. You cannot use the yacht commercially. This cuts off a possible revenue source.
There are many decent cruise ships for sale at prices of less than one million dollars that would make good private megayachts. For example, take the ‘VERGINA SKY’ is a ship that I have personally inspected and so I can talk first hand about it. The asking price was $750,000. Here are the specifics of the ship in a nutshell:
Current Name: Vergina Sky
Ship Details: Built: 1971 in Japan – totally rebuilt 1992 in Greece
Dimensions: LOA 97.8m x LBP 82m x beam 14.6m x draft 4.49m Dwt: 500 on 4,49 GT/NT: 4,668 / 1,717
Description: Pielstick 2 x 8400bhp, twin screw, bow thruster, 3 x 500kw generators, 16 knots, 2 saloons, restaurant, 3 bars, casino, duty free shop, disco, swimming pool, 120 cabins for 318 guests. Lying Greece
My Comments after inspecting the ship
This is a well built little ‘Pocket Cruiser.’ At just over 320′ in length overall, it is a small cruise ship. Many experienced cruise passengers prefer smaller more intimate cruise ships for a variety of reasons. This ship can go places where the big cruise ships cannot reach, such as shallow draft ports and already many rivers. It has an omni-directional bow thruster and can turn on a dime (comparatively speaking of course). I have carefully examined this ship from the engine log to the ultrasound hull report. This is a sound and safe little cruise ship. It is also a very fuel efficient and economical ship. My first time on this ship was in the middle of the summer in Greece when it was very hot outside. The ship is fully air conditioned and it was cool and comfortable inside the ship. I checked the engine room to see how many generators were running. I am happy to report that all the electric and air-conditioning requirements can be met by running just one of the three Daihatsu generators. These generators are very economical to function in terms of fuel consumption and maintenance.
I was able to negotiate with the owner, John Kosmas and get some concessions. I got the price down to $500,000. And at that price, he agreed to bring the ship into compliance with SOLAS 2005 and also to include new paint topside. The ship was fairly well furnished already including bed linen, but the ship had been laid up for years. Its most recent service was in the Mediterranean and Black Seas. Cruise ships that trade exclusively in the Mediterranean and Black Seas tend to have smaller cabins and fewer amenities than the typical cruise ships that frequent the Caribbean. The bottom line is that this ship was an economy form, not a luxury form. When I was inspecting the engine room, I asked for the engine log. When I opened it I noticed all the entries were in Greek. I was able to ascertain some dates and other data that told me when the ship was last in service, but I could not read the Greek entries so I handed the engine log back to the ship owner, and told him “It’s all Greek to me.” Being Greek, Mr. Kosmas failed to find the humor in that.
Let’s look at the numbers on this ship. 100% of the acquisition cost would have been $500,000. 1% consequently = $5000. One hundred buyers could own one percent each. There are 120 cabins so each co-owner could have a private cabin with 20 cabins left over. However, these cabins are a bit on the small side. Every cabin does have a bath and shower, but the size is just too small to be comfortable for most people, especially if the owners intend to live onboard complete time. On a ship this size I would recommend that there be no more than 60 joint owners so each can have two cabins and will have the option of converting those two cabins into a two room suite. To keep the numbers simple lets say that this ship has 50 buyers who each buy 2% of the ship. Buy in cost per owner would then be $10,000. If there were only ten buyers, then the acquisition cost per buyer would be $50,000. $50,000 will not buy much of a house on land, but on this ship it would buy 10% of a ship like the Vergina Sky and twelve cabins that could be converted into a fairly large home.
At the economy end of the extent, a co owner could buy 1% of an economical cruise ship for about $5000. However it is not necessary for all co owners to have equal shares in the ship. Ownership can easily be divided up into 1% increments. If one buyer wanted 5%, then his cost of acquisition would be $25,000. He would be entitled to 5% of the ship’s cabins, and would have five votes on operations and management of the ship, such as itinerary planning.
Before becoming a joint owner, it would be imperative to find other people who have similar goals. I would suggest composing a preliminary DCCR (DECLARATION OF
COVENANTS, CONDITIONS AND RESTRICTIONS). You can do this before you already shop for a ship. Write your version of how you envision the shared ownership of a cruise ship as it should be. Then see if you can find some people who agree with your goals and your DCCR, unprotected to some revisions and concessions to adjust to other joint owners.
Step One: Determine if you and your family have the desire and financial capability to become joint cruise ship (or megayacht) owners.
Step Two: Find others who agree with your concept for shared ownership of a ship.
Step Three: Shop for a ship. This is the fun part.
Step Four: Buy a ship.
Step Five: Put the ship into service.
already if you are not high, you can provide to jointly own a cruise ship. But then comes the next logical question: Why would you or anyone want to live on a cruise ship? Who would this be appropriate for?
If you are retired or otherwise have a stable income from a dependable source you probably can provide to be a cruise ship co-owner and live complete-time onboard a cruise ship. If you work in a field where you can work from home online, then you too can probably provide to become a co-owner of a cruise ship. Most modern ships have satellite Internet service obtainable 24-7.
Operating a cruise ship is expensive. The expenses include the cost of fuel, labor, maintenance, repairs, spares, food, port charges, insurance, technical management, shore management, registration, and the other costs of operating the ship. At first to peek briefly these costs may seem expensive, but in reality the cost of living at sea is truly a bargain considering what you get based upon what you pay. The best value does not always translate to the cheapest price. If the ship is well managed, the management will seek the highest quality goods, sets, and labor at the very best global value. If the owners are dissatisfied with either technical or shore management, they replace them.
If there are many other co-owners of the ship to divided the operating expenses of the ship, it can be affordable for those with a moderate level of income, such as a retirement check. I do have specific operating cost figures but I won’t bore you with that data. The bottom line is that it would not be extremely expensive for a middle-class average person to be able to provide to own a fraction of a cruise ship and be able to provide to live on the cruise ship complete-time if they elect to do so.
For comparison purposes it is noteworthy that you have expenses in land based housing too. Those expenses include character taxes, homeowners insurance, maintenance and repairs, yard care, and utilities. Additionally you have transportation costs and of course food costs. Most people also use money on entertainment too. When these expenses are additional up the maintenance fees for living aboard a ship are comparable.
There are truly some savings resulting from living aboard a ship. The ship’s executive chef buys food and kitchen supplies in bulk for the ship and can get better prices than the average shopper. Other savings consequence from the large freezers and the mobility of the ship giving the food service management the ability to stock up on supplies in countries where prices are low. Some crew and owners may choose to fish for leisure. This can supply some fresh food at already lower costs to the owners. Labor savings are realized when the crew is hired based upon the best global labor rates. The laws of supply and need excursion prices down in some places in the world. Proper ship management can capitalize on these disparities. All the savings would be passed on to the cabin owners resulting in an economical cost of living similar to what you could expect to use with a traditional home. Ship management should have accounting transparency will all books (financial records) open and obtainable for any owner to inspect. Also ship management should submit all financial records quarterly to an outside auditor for the peace of mind of the owners. Anybody in the chain who spends any of the ship’s operational funds should also be regularly audited. For example, a good way to audit the executive chef would be for one or more of the live-aboard co-owners of the ship to go to the food market district of each port of call and they should try to haggle and get a better price for the same food than the price the executive chef was able to acquire. If the executive chef cannot find better deals than the ship’s co-owners, then the executive chef should be given his walking papers. The executive chef position is a vital position on a cruise ship. This is a position of trust because he will bill the food he buys to the ship. He must never be tempted to accept bribes from vendors or suppliers. consequently, he should know that he will be ordinarily audited and any substandard performance will consequence in termination of his employment.
The biggest value of all onboard cruise ship is in labor costs. The better cruise ships tend to be labor intensive, providing passengers with unrelenting attention and extravagant pampering. The hotel staff on all cruise ships provides the basic sets including food preparation and serving, laundry, cabin stewarding, entertainment, casino operation, beauty shop operations, This is one area where I would prefer to not scrimp because of the very good value in these sets due to the low cost of international labor. I would prefer to go beyond the level that most cruise ships go in the area of spas. Land based luxury and specialty resort spas are very expensive, but the exact same level of service, professionalism, skill, and treatments can be provided on a cruise ship at extremely low cost. Labor is the meaningful and the dominant reason for most of the expense of spas. Labor is a tremendous value on a cruise ship because the cruise ship managers can choose workers from the global marketplace where it is easy to get the best value for the money.
Spa treatment is customized for each client. Spas commonly offer sets such as:
Soothing massage therapies, skin and body treatments drawing from European and Eastern principles, expert hair and nail sets, and a complete menu of therapeutic treatments employing a thorough-cleansing facial at the start of the program, in addition as a series of detoxification and contouring wraps, lypo-reduction wrap, in addition as marine mud and herb wraps. Massage Therapies including: Swedish Massage, Shiatsu Massage, thorough Tissue Treatment, Maternity Massage, Therapeutic Foot Massage (Reflexology), French Hydrotherapy Massage.
The healing therapies include a variety of massages, reflexology, facials, firming and many other body treatments. Plus a wide variety of sets and wellness programs specially designed to meet the individual’s needs and desires. A complete service salon offers all manner of hair treatments (including a certified colorist), in addition as a variety of manicures, pedicures, and ‘facelifts’ for your hands. Extensive skin care includes: Age Management Therapies including, Glycolic Facial, Anti-Aging Facial Peel, Microdermabrasion; Facials including: Aromaplasty Facial, Teen Facial, Gentleman’s Facial, Nutrisource Facial, Regulating Acne Facial, Vitamin “C” Skin Renewal Facial; Body Treatments including: Decleor Sauna disguise, French Hydrotherapy Massage, Andromeda Salt Glow, Mummy Mud disguise, Seaweed Body Wrap, Safe Sun Treatment, Herbal Wrap; in addition as various hair and nail treatments.
Additionally, spas also can ease weight reduction programs, and already administer physical therapy. In short, you can be treated like a king, on the budget of a pauper.
Labor Costs – International competition provides the most value to the ship owners.
On paper it seems to make good sense to man the ship with a Philippine crew. I love the Philippines. I have been there several times. English is nevertheless widely spoken and usually spoken quite well. The people are usually friendly and happy to see foreign tourists. A large percentage of ships worldwide are manned by crews from the Philippines. The Philippine government has a pretty good structure and system to ease the export of Philippine labor. in spite of of how attractive it seems on paper, I would recommend NOT hiring a crew from the Philippines. Philippine workers tend to be envious of others, and especially of everybody else’s wages. They tend to think they are getting the raw end of the deal. It is scarce to find a Filipino who is happy with his employment. While I am sure there are many good employees from the Philippines, there are more who are dissatisfied than satisfied with their employment. There seems to be a cultural anomaly in the Philippines where people feel that employers are bad guys. I would hesitate to recommend a crew from the Philippines in spite of of the apparent advantages on paper.
My recommendation (for what it is worth)
I do know something about what I am writing about here. I am the former President of Adventure Spa Cruise. My advice is not just uninformed ranting. Back to the point now, the second best manning nation for a ship is India. I highly recommend India for the medical staff and the complete hotel staff, including the spa, and every other position except the deck and engineering. The labor costs in India are very attractive. I would also recommend using an Indian based manning agency. It is best if the ship’s owners do not have to deal with every employee issue or concern. The manning agency takes the pressure off the ship’s management, and their service is very reasonable. Indian employees tend to make better employees than do Filipinos. Indians also speak English, albeit not quite in addition as Filipinos. I know Americans tend to get all worked up when someone uses a general brush to paint an complete ethnicity. I love the people from the Philippines, but as employees they tend to be more problematic than do Indian employees. I realize that this statement is politically incorrect, and these days that might get me thrown in jail. I usually do not worry so much about being politically correct. I call it the way I see I and I let the cards fall where they may, and hope I can stay out of jail for speaking my mind.
All deck and engineering locaiongs should be filled with an all Ukrainian crew. The ship will realize the most value for the money with Ukrainian deck and engineering staff. The Ukraine has a long maritime history and tradition. Maritime training and standards in the Ukraine are among the best in the world. Ukrainian deck and engineering staff are as good as or better than any other, but the cost of their labor is a very good value. The labor for deck officer and engineering staff are governed by international agreements, including STCW (Standards of Training, Certification and Watchkeeping for Seafarers).
Putting a cruise ship into service
After acquiring the ship, it will require some more investment to put it into service. At this point the joint owners will need to reach some agreements on many points. The cost of putting a cruise ship into service as a megayacht (very large private yacht) is much less than putting the ship into commercial service. However, if you can provide to buy a ship can easily meet SOLAS 2010 requirements, and can provide to flag and register it as a commercial ship then you can use the ship commercially to produce income and ROI (return on investment).
There are many marketing options for a commercial cruise ship. If the owners use no more than half the cabins, then that will leave sufficient method to produce enough revenue to at the minimum pay for operating costs, and possibly produce a profit above operating costs. I will just briefly touch on some of the options obtainable for marketing cruise ship capacity.
1. traditional cruises. There is a trade-off here. You can produce revenue by providing traditional cruises. This will require that the ship have an itinerary that suits the commercial cruising market.
2. Freight and cargo. Some cruise ships have enough cargo capacity to produce some revenue by booking freight.
3. Assisted living. A cruise ship is well suited for assisted living, including crew and facilities. The going rate for assisted living in the average city in America is higher than the average cost of a cruise of the same duration.
4. Timeshares. This is an option not obtainable to traditional cruise ship operators but could be facilitated if your co-owners agree to this kind of marketing to fill cabins not used by co-owners. I will not go into the figures here, but timeshares tend to be high profit sales. There is a good chance that if the joint owners use no more than half the ship’s cabins for their own personal use, the remaining cabins could easily produce more than the total amount all the joint owners combined have invested.
Ships that would easily meet SOLAS 2010 tend to cost a bit more money to buy up front, and cost more to put into service. So I will give you associate of examples.
The Orient Venus is one of my favorite high-end ships. The specs:
M/V ORIENT VENUS
BUILT: JULY 1990 AT I.H.I.TOKYO
JG. NK OCEAN GOING
GRT: 21,884 TONS
DWT: 4,863 TONS ON 6.50 M
LOA x B x D : 174.0×24.0x8.7 M
M/ENG: DIESEL UNITED-12PC2-6V x 2 SETS ,
TWIN SCREW CPP
SPEED: SERVICE ABT21.0 KNOTS / ABT 56.70MT /D
FUEL TANKS CAPA: IFO 1,500.4 M3 /MDO 87.30M3
GENERATOR: 1,600KWxAC450Vx60HZx 3 SETS
ENGINE ROOM M0 SYSTEMS
CRUISING RANGE: ABT 7,000MILE
PASSENGERS: MAX 606 PERSONS
CREW: 120 PERSONS
DELIVERY: BY ARRANGEMENT
INSPECTION : KOBE.JAPAN
OWNERS PRICE USD 22 MIL net here
My personal assessment of the Orient Venus
It is a late form and beautiful ship. It has many highly desirable attributes for a residential ship. It is a high end luxury cruise ship with an extraordinarily high tonnage to passenger ratio. This is very important for a residential ship. More living room and more space per passenger is far more basic for a residential ship than for a traditional cruise ship. When passengers are only on a ship for a short time, they can tolerate cramped living quarters, but when they live year-round on a ship, the additional space is quite valuable. The owners have been trying to sell this ship for $22,000,000. That may seem like a high price, but when you divide it by the number of cabins (195) the asking price per cabin is $102,564. This price is in line with what you would expect to pay for a condominium. The last information I got from the owners is that they will sell the ship for $18,000,000 now ($92,307 per cabin). The cabins are all “outside” cabins and are large. The ship can adjust to 606 passengers and a crew of 120, for a total of 726 people.
Several ship brokers have this ship listed. I usually do not talk to ship brokers. I prefer to talk directly with the ship owners. I am in contact with the owners of the Orient Venus. I could probably get this stunningly beautiful ship for less than $15,000,000 today, and get some concessions and extras thrown in to boot.
Another example of a high end ship that would make do well as a commercial cruise ship, plus adjust to a hundred or so complete-time live aboard co-owners is the Dream Princess, originally named Song of Norway.
Max Draft: 6.7 M in sea water
Length: 194 M.
Total No. of Cabins: 538
Total No. Of Beds + Berth: 1280
Outside Cabins: 346
Inside Cabins: 192
Cabins size range: SQ. M: 11 -18.
Main Engines: 4 Wartsila Sulzer – 18,000 HP.
Service Speed: 16 Knots.
Main Dinning room – “King & I”- about 500 pax.
South Pacific Lounge about 400 pax.
My Fair Lady Lounge about 500 pax.
Self Service Restaurant on the swimming pool deck
Large Swimming pool
Duty Free Shops
8 passenger decks
extensive outdoor areas
Ship was redecorated / refurbished extensively during 2005.
The asking price on this ship is $31 million USD. Divide the asking price by the number of cabins and the average cost per cabin would be $57,620. Of course some cabins are better than others so co-owners would have to agree of the shared usage before agreeing to the buy.
I have some bad news for the ship owners and some good news for you. This ship will not sell for the asking price.
Ship fuel is cheaper than automobile fuel for a few reasons. There are no road taxes on ship fuel of course and also it is different fuel. Ships main engines usually run on IFO180 or IFO380. Generator engines tend to be more finicky and commonly require diesel (MDO), which is nevertheless cheaper than automotive diesel. IFO 180 and 380 costs much less than MDO, usually about half the price. Ships consume a lot of fuel. So fuel cost is a major concern. I have some suggestions. If I were a co-owner of a ship I would be willing to invest a little more in the ship to increase fuel efficiency, and consequently lower operating costs. There are many things that can be done to increase fuel efficiency. I would start with hull resistance. There is a new silicone-based paint from International Paints that when applied to the hull reduces amount of resistance in the water sufficiently to consequence in a 3 to 5% decline in fuel consumption. A similar coating for the propellers also has been proven to increase fuel efficiency.
In addition to hull and prop coatings, there is an already more promising way to unprotected to emotional fuel savings.
There is a company called Kiteship that has developed and produces kites for racing sailboats. These sailing kites do not require a mast. The kites fly high above the canal, attached by cable and controlled from the canal. Dave Culp of Kiteship has done a technical feasibility study on fitting a very large kite onto a traditional cruise ship. This would dramatically reduce fuel consumption. It would transform a fuel guzzler to a “green machine.” This is tantamount to converting a powerboat into a sail boat. The design of a cruise ship limits the amount of sail that a traditional ship can safely adjust to. A cruise ship lacks the ballast of a sail boat. If used in addition to the main engine(s) the kite will increase fuel efficiency. If the kite is used to pull the ship with the main engines shut down the ship’s speed will be reduced significantly. However, in this case, not only would the ship save IFO (main engine fuel) but also save MDO (generator engine fuel). If the kite were pulling the ship unassisted by the ship’s engines, then the propellers could be used to propel the ship’s generators without firing up the diesel generator engines. already if the ship were traveling very slowly in the water, the propellers would turn in reverse if freed from the main engines. This is a very simple and easy task for the ship’s engineer to accomplish. In other words, the ship can be pulled by the kite, and that motion will push the ship’s propellers providing strength to produce electricity and strength the air-conditioning without using any fuel. The trade-off is a loss of speed and also some tacking is required, further reducing actual speed. What’s the rush? Why not go for maximum fuel savings? The salient point is that a high flying large kite can pull a cruise ship. If I were a co-owner of a cruise ship I would hope to find like minded co-owners who would be receptive to using such state-of-the-art technologies to save fuel.
There are hundreds of cruise ships on the market but I will just mention one more here. This cruise ship has RO/RO (Roll-On, Roll-Off) capability. This would be very functional for live aboard owners who want to bring their “toys” with them. The garage deck will adjust to 6 to 8 trucks, or 60 to 80 cars. That converts to a lot of co-owner toys such as motorhomes, travel trailers, campers, cabin cruisers, ski boats, jet skis, sailboats, houseboats, bass boats, motorcycles, ATVs, cars, and trucks.
650 PASSENGER CRUISE SHIP FOR SALE
canal IS FULLY FITTED WITH SPRINKLERS
SOLAS 2005/2010 FITTED
TWIN SCREW CRUISE
canal DIMENSIONS LOA 137.10 X BREADTH 21.00 X 5.8 METERS DRAFT
BUILT 1981 / POLAND
REBUILT – UPGRADED 1999
REBUILT – RENOVATED – REFURBISHED 2002
CLASS R.S. ICE CLASS L2
PASSENGERS 650 IN 230 CABINS (BASIS 3 BERTH OCCUPANCY)
ALL CABINS WITH PRIVATE FACILITIES (INCLUDING SUITES AND SEMI SUITES)
MAIN ENGINES SULZER 4 X 4,350 BHP
SPEED ABOUT 17.5 / 15 KNOTS ON ABOUT 45 / 36 M/TONS + 9 TONS DIESEL OIL
BOWTHRUSTER 800 BHP
120 TONS PER DAY WATER MAKER
RESTAURANT (420 SEATS)
DUTY FREE SHOP
CHILDREN’S PLAY ROOM – TWO DISCOS
DUTY FREE SHOPS
ONE PASSENGER ELEVATOR
LAUNDRY SPA & HEALTH CLUB
TWO SWIMMING POOLS (ADULT & CHILDREN)
Cost per cabin based on asking price, $71,739. This ship will sell for less than asking price. It is already SOLAS 2010 compliant. It would cost very little to put into commercial service.
Becoming a co-owner of a cruise ship is not a far fetched idea. It is functional and possible if you are able to find like minded people who would be willing to proportion the expenses.