A clever crossover between the boating industry and the hospitality biz is about to raise some eyebrows.
It's only natural for businesses and industries to tap into markets with similarities to their service or product. Once a business carves out a niche in its primary market, it's only logical for them explore related markets in order to expand.
That attitude has resulted in plenty of crossover in the boating world before -- albeit with industries where the connection is more obvious. The overlap between boating and the automotive industry is longstanding, and that willingness to share ideas has spanned everything from engines to hull designs to AI. Boats and vehicles need many of the same things, so it stands to reason they work together to improve both sides.
That being said, despite boating being largely centered around travel and accommodation, there has been little crossover between the boating and the hospitality industries.
Ritz-Carlton has been quietly building a boating portfolio that's slipped under the radar. The new division is called the Ritz-Carlton Yacht Collection.
Back in 2017, the hotel chain announced they were taking to the sea by offering charter yacht experiences -- basically taking their expertise in hospitality and applying it to high-end clients on the high seas.
The first superyacht -- Evrima -- launched in 2022 and with an ample length of 623 feet (190 m) serves as a superyacht/cruise ship hybrid that boasts149 cabins for up to 298 guests and weekly rates are as low as $2200 USD. The ship spends its winters chartering in the Caribbean and Bahamas while spending its summers in the West Mediterranean.
The second ship -- Ilma -- just launched in September 2023, and at 791-foot (241 m), has room for up to 448 guest across 224 cabins. Like her sister ship Evrima, the Ilma resides between a cruise ship and a superyacht by offering a yacht like experience with cruise ship amenities. In 2024, the Ilma will offer up to 12-day trips with routes including Greece to Israel, Spain to Portugal, and Israel to Italy.
The third yacht -- Luminara -- is currently under construction and is expected to be ready for 2025.
In the meantime, it appears the success of Ritz-Carlton's crossover business has gained enough traction to warrant a public offering, along with more plans to expand to the growing fleet.
In an interview with Bloomberg last week, Jim Murren, the Executive Chairman and CEO for Ritz-Carlton Yacht Collection, said he envisions “a large fleet of exclusive resorts at sea” in the future.
“We would like to get into the Pacific for ships four and five, Australia and New Zealand, Singapore,” Murren added.
To accomplish the goal, the company is seeking to raise $400 million USD in fundraising towards an IPO. Should they reach the target, Murren says the company will be seeking to build 8-10 new yachts as part of the endeavor. According to Bloomberg, Ritz-Carlton already has the backing of Oaktree Capital Management, and is looking to Citigroup to raise funds.
Until then, Ritz-Carlton's current flagship -- Evrima -- has already sold out its entire 2023 charter offering, indicating the strength of the yachting market.
“We think this particular type of [luxury hotel] guest represents a $5 billion market. If everyone built (ships) as fast as they could, we still wouldn’t have enough supply to cater to this demand. We have the early mover advantage,” Murren told Bloomberg.
You can check out the Ritz-Carlton Yacht Collection in the video below: