NEW YORK -- It's been a year since the ResidenSea concept -- part
cruise ship, part luxury condominium -- was launched. And despite a
few bumps, executives said they're pleased with the progress
they've made.
CEO Robert Riley said the company sold nine apartment cabins on
the ship, the World, in the last seven months, for a total of $25
million.
And ResidenSea exceeded first-quarter revenue projection by 28%,
he said.
Riley and Frank Cavella, senior vice president of sales and
marketing, praised the line's relationships with travel agents,
saying about 85% of their bookings come from retailers.
But, Riley said, starting a new cruise line, and a new cruise
concept, in the current market has been a challenge.
"We spent five years telling people we have apartments for sale
... there's plenty of rental opportunities. ... It was a confusing
message, we admit."
Some first-year cruisers might have come aboard with
expectations of a typical cruise, said Cavella, and then been
surprised to find a ship that functions more like an upscale hotel:
no cruise director, no set mealtimes and a ship that often stays in
port for several nights and often sails less than full.
The World has a few different options for would-be passengers:
Short-term guests can rent an apartment from an owner, or they can
rent a standard studio cabin.
Wealthy cruise enthusiasts can purchase one of the ship's two-
and three-bedroom apartments. The two-bedroom apartments start at
$2.3 million. Riley said annual apartment maintenance is $100 per
square foot.
Now, ResidenSea will make its 88 rental cabins available for
purchase, either as studios or one-bedrooms. Prices start at
$900,000.
As the World sails into its second year, the company is making
some sales tweaks -- restructuring the price points on the rentals,
for example, and including restaurant and bar charges in the price
of apartment rentals. (Few people actually cook in the World's
apartment kitchens.)
Riley said the company recently restructured its debt financing.
"We're in good shape now," he said.
Occupancy rates on the World, on average, run in the mid-60%
range, said Cavella. "But we don't need 100% occupancies to
succeed," he said.
Response to the ship's Asia itineraries have been strong,
Cavella said. But last month the World was steered away from the
region due to concern about severe acute respiratory syndrome.