Cruise Ships & Ferries
In today’s large and complex cruise and ferry industries, companies occasionally need to augment in-house capabilities with fresh perspectives in order to improve business performance.
Maritime Management Consulting has experience focusing on the issues that are important to cruise ship and ferry operators.
We have assisted owners and operators of Cruise Ships and Ferries with:
- Feasibility studies and new product introductions
- Market analysis and branding
- Marketing assistance
- Operational performance improvement
- Drydocking and refurbishment project management
- Economic issues and financial performance analysis
- Ship design and acquisition
- Business plans and long range plans
Client Work and Other Experience
- Strategic Overview of Shipboard Residences: A major US financial institution was preparing to market a unique ocean residence concept to high-net-worth individuals. MMC was asked to review the overall business plan, proposed operating scenarios and budgets, and identify any issues likely to impact the overall financial success of the project. In a very short time, MMC reviewed with the project stakeholders a series of concerns/recommendations covering all aspects of the potential venture. Concerns have been addressed and the residences are being marketed.
- Vessel / Business Valuation: The bankruptcy estate of a cruise company was involved in litigation surrounding favored treatment of certain creditors during the bankruptcy process. As part of the effort, MMC was asked to value a series of cruise vessels at various points in time. Valuations were established based on both comparable vessel sales (from the MMC database) as well as the value of the ongoing business at various times and in various market scenarios. The case was eventually settled in favor of MMC's client.
- Business Plans and Feasibility Studies: For numerous existing cruise companies and entrepreneurs, MMC created business plans for and assessed the feasibility of new cruise ship offerings. These plans and studies were used by the clients to seek financing for the projects, as well as to focus their plans for the business. In several cases, the clients were encouraged by the governments of France and Germany to engage MMC for this service.
- Five Year Plan: For a major cruise line, MMC prepared a five year plan, including operating costs, revenues, and growth targets.
- Acquisition: For an existing cruise company, MMC helped the client decide on the acquisition of another existing cruise operation. Analyses included market projections and financial pro formas.
- New Ship Concepts: For several cruise ship owners and operators, MMC provided guidance and assistance in developing new cruise ships:
- A new series of large cruise ships were designed and ultimately constructed based on customer values and focused market research
- A cruise ship targeted for the upscale spa market was designed with market input. Contract design was developed; however, funding was never secured for construction.
- Significantly larger ships for an operator of smaller cruise ships were conceptualized, designed and ultimately built in Europe.
- The initial product concepts for a new cruise line were developed. To date, two of the ships have been constructed and are successfully operating in the marketplace.
- Cruise Ship Development: MMC advised a ship owner during development of a series of Panamax cruise ships for construction in the United States. Assistance included: identification of required attributes for the new ship; facilitation of initial design strategy meetings; development and administration of a design competition; preparation of a statement of requirements and list of deliverables; and participation in evaluation of resulting designs, technical proposals and price proposals. This effort led to selection of a shipyard and contract award.
- Ship Valuation: On several different instances, MMC analyzed the price of cruise ships for existing cruise ship owners and operators. These prices were used in negotiations for the purchase and sale of cruise ships. MMC has also prepared valuation for ships in support of regulatory filings and/or sales transactions managed by attorneys. The commercial viability and value of a fleet of two small passenger ships was analyzed during bankruptcy hearings; MMC testified as an expert witness.
- Cruise Industry Forecasts: For the cruise industry, MMC provided an annual forecast of supply and demand for cruising in North America for the next 5 years. The forecasts tracked very closely over the years with actual statistics.
- Market Segmentation and Forecasts: For an inland cruise operator, MMC segmented their customers and forecasted the market opportunities by segment. The results were used to develop advertising and promotional campaigns.
- Itinerary Planning: For a major cruise line, MMC assisted the client in re-defining its itineraries. Sophisticated marketing tools, including a version of conjoint analysis, were used to project customer preferences for ports of call and length of cruise.
- On-board Organizational Performance: For several cruise ship operators, MMC assessed the performance of the shipboard staff in terms of efficiency, customer focus, technical capabilities and communications
- One of the largest ships in the world had operating problems that needed to be pinpointed and corrected. MMC went on the ship and found organizational structure problems, maintenance and repair shortcomings, poor communications, and technical inadequacies. The recommendations to the president of the company were implemented and the ship has been operating smoothly for two decades.
- An upscale cruise ship had a series of accidents and events that indicated more than simply mechanical problems. MMC sailed with the crew and determined that the organizational structure was preventing clear and timely communication among the crew. A number of recommendations were implemented and the accidents and events were eliminated.
- Using techniques from Process Realignment and Total Quality Management, MMC restructured the onboard staff of all of the ships in the fleet of a large cruise ship operator. Customer satisfaction improved, performance to budget was achieved, and the staff morale increased.
- Onboard Processes: For a large cruise ship operator, MMC conducted an extensive onboard audit of the way the ships were being run. A series of workshops on the ships were then conducted to refine and improve the operating procedures and processes. This work included a number of the concepts and steps normally associated with Total Quality Management.
- Operating Budgets: For a large cruise ship operator, MMC assessed the on-board operating budgets for the fleet of ships. Using industry standards, budgets were adjusted to reduce costs by $5 million in the first year.
- Cruise Ship Operating Profile: For a major cruise ship operator, MMC reviewed the operating costs and compared them with industry-wide standards. The cruise company was then able to focus on budget areas that were out of line in order to cut costs.
- Organizational Design: For a travel and leisure company in Hawaii, MMC assessed the organizational structure of the entire company and recommended a flatter, focused structure to capitalize on the specific strengths of the company’s employees. The new organization was put into place and both customer satisfaction and financial performance improved.
- Due Diligence: For numerous investment firms, MMC provided due diligence on new cruise ship offerings. These activities were typically under the direction of the firms’ corporate attorneys.
- Large Passenger-Car Ferry Construction: Late delivery and cost overruns resulted in a claim by the shipyard responsible for design and construction against the ship owner. Working on behalf of the ship owner’s attorney, MMC researched the shipyard labor market during the period in which the dispute took place. This analysis helped establish the strategy for response to the claim.
- Drydocking and Refurbishment Management: Over a period of several years, MMC managed the in-yard drydocking and refurbishment of six cruise ships. The value of each project ranged from $5-20 million, and took place in yards in the United States and Europe. MMC put together a team consisting of consultants and client staff to utilize sophisticated project management tools during the ships’ work. MMC also assisted the client in selecting and then managing a cadre of international subcontractors who performed the work at the shipyards. Each of the six projects was completed on time (with no subsequent onboard work required after leaving the yards), under the budgeted price, and to the satisfaction of the ship owner. While resistant at first, the shipyards all agreed that the techniques used were useful to both the owner and the yards, and they recommended using MMC on subsequent cruise ship work.
- Cruise Ship Repair Litigation: On behalf of the owner of a cruise ship, MMC provided expert advice in determining the causes of late delivery and cost over-runs on the drydocking and refurbishment of the ship. The case was settled to the satisfaction of the client.