Boating: The World Is Not Enough
The residential cruise ship, a notion many had dismissed as the right idea at the wrong time, soon may become the fastest-growing sector of the luxury travel market, with the numbers of seagoing condominium complexes set to double by 2007—from one to two. Numbers aside, Four Seasons Hotels and Resorts’ entry into the residential cruise market validates the concept pioneered by The World of ResidenSea. “Despite the many challenges and shortfalls they’ve encountered in the post-9/11 environment, ResidenSea has been successful in many areas, and its residents are, for the most part, satisfied with the product,” says Kristian Stensby, CEO of Ocean Development Group in Miami, which is building the $340 million The Four Seasons, the ship that will house the Four Seasons Ocean Residences.
That said, Stensby offers several reasons why one might be even more satisfied with the Four Seasons ship. For starters, there is its business model. “The Four Seasons is designed to be completely residential, with a few guest suites available for friends and relatives of the owners,” he explains. “Revenues will be generated mainly by the sale of residences and, to a lesser degree, through nominal management fees.”
Although it will be about the same size as The World, The Four Seasons will offer only 86 residences, 79 fewer than its predecessor. These homes will measure from 1,336 to 3,435 square feet and will be priced from $4 million to $15.4 million. An additional 10 two- and three-bedroom residences will be available through a fractional-ownership plan, with a typical one-twelfth (28-day) interest priced from $400,000.
The emphasis on ownership, Stensby explains, should help The Four Seasons avoid the problems intrinsic to The World’s original business model, which called for the sale of residences to cover only the shipbuilding costs. ResidenSea expected to generate additional revenues from the bars, retail shops, spa, and 88 nonresidential suites that it would offer to the general public as part of a traditional cruise product. Regardless of whether this strategy proved profitable, it was a customer-relations disaster. The residents, who had paid as much as $7 million for their apartments, resented the bargain hunters who could join them on deck for as little as $450 a day—for two, meals and wine included. As for the cruise crowd, they felt like second-class citizens among the owners.
Stensby acknowledges that Four Seasons also learned from The World’s structural mistakes. The older ship lacks natural daylight in many of its second and third bedrooms, so the new ship will situate every bedroom along the outer walls to afford floor-to-ceiling views whether by sunlight or starlight. While the private terraces on The World are long and narrow, making socializing impossible, The Four Seasons’ are square-shaped and sufficiently spacious for outdoor entertaining and mingling. “One thing we learned by studying The World was that people wanted a more intimate experience,” says Stensby. “This is why our theater will have only 77 seats, where The World’s has 203. For much the same reason, we can adjust the size of our restaurants depending on whether there are 100 people aboard or 200 to avoid that ‘empty’ feeling.”
Meanwhile, onboard The World, the angst has subsided since October 30, 2003, when its residents purchased the ship, while retaining ResidenSea to manage it, and converted many of the rental suites into residences. Several suites still can be rented, but at a $1,000-per-night rate that should deter any bargain hunters.