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What's Affordable????

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Old 10-08-2013, 10:39 AM
Join Date: Aug 2011
Posts: 7

Jim, Bob,

to operate profitably, the DQ needs to fetch a weighted average of approximately $360-$370 per person, per day. So you are looking at an average of about $2500 pp for a week-long voyage. At those fares, with a single-boat operation, she would need to operate approximately 270-290 days of the year at an average of 85% occupancy (150 pax per voyage) to net out a profit of approximately $200-250,000 per year.

The question is, will the public be willing to pay? If she operated primarily 7-day cruises, that equates to 40-42 voyages per year for a total of 6300 pax. Obviously, if you run shorter cruises, there are more cruises to fill, thus more pax to attract and that needs to be offset by higher marketing and operating costs which push fares up or profits down or some balance of the two.

My numbers are all predicated on them obtaining funding at a reasonable interest expense but I would hazard a guess this will not be the case. It will most likely be mezzanine or junk debt that will carry interest north of 15%. The higher the interest expense, the higher the fares need to be or lower the profit, and this boat operates on a thin margin on the best of days.


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