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Journeys: On Top of the World

Jack Smith

It was a drizzly morning in Kirkwall, a village in Scotland’s rugged Orkney Islands, but the villagers ignored the damp to gather on the dock and gaze agog at the mysterious craft floating serenely on the horizon. Gleaming white and more than two football fields in length, with private terraces honeycombing its flanks and stern, it was the kind of ship they did not see every day in the Orkneys. But then, there had never been a vessel quite like this one, The World of ResidenSea.

For days prior to the ship’s arrival, the Scottish press had regaled readers with reports of The World’s opulence: the palatial staterooms, the four gourmet restaurants, the displays of costly art, the landing pad for its passengers’ private helicopters.

Yet it was not just its amenities that set The World apart, because this was no ordinary cruise ship. For the majority of its passengers, it was home. With the sea as its front yard and a constant change of scenery beyond, it was the ultimate gated community, Malibu with a moat, a splendid exile from which its inhabitants need never, ever, disembark as it floated from port to port. It was the stuff of fantasy, and the frugal Scots could only speculate on the limits, if any, to the shipdwellers’ extravagances. One local newspaper, The Scotsman, observed, "Rumors that their golf balls are made of gold and their clubs of platinum may not be exaggerated."

As the visitors clambered onto the dock, the locals stood by expectantly, some with pen and paper in hand, looking for famous faces, while reporters, photographers, and TV crews made ready to chronicle the sightseers’ perambulations through the town as if they had been beamed down from a UFO instead of arriving by launch. For all of the hubbub surrounding the ship and its inhabitants, some found the very idea outlandish. As a columnist for Scottish Sunday opined, "To cruise aimlessly around the high seas with 200 superrich fun-seekers in a luxury liner" was her idea of "hell on earth."

Actually, there was nothing aimless about it. The ship’s itinerary was designed to tarry in only the most salubrious climes. In its first four months afloat, the ship already had made fair-weather stops at Oslo, Amsterdam, London, Madeira, the Canary Islands, and Corfu before arriving in Scotland. Along the way, the residents were accorded VIP treatment at such fabled events as the Cannes Film Festival and the Monte Carlo Grand Prix, and they expected no less here in Scotland.

 

"You’re from the ship?" a waitress at a dockside hotel inquired as she delivered shortbread and coffee to our table. Yes, we answered, we have come ashore to do some sightseeing.

"What’s it like then, being rich and famous," she asked, puckishly. "It takes some getting used to," I admitted.

This was true. We had boarded The World several days earlier in Trondheim, Norway, and were still adjusting to life among the floating elite. However one might envision tenscore "superrich fun-seekers in a luxury liner," nobody would confuse The World with The Love Boat. There were no crowds, no lengthy buffet lines, no toga or oldies nights, no noisy revelers packing a year’s worth of fun and romance into a week at sea. In fact, with only 320 passengers (not including the crew) on a 43,000- ton vessel, the sense of privacy, of utter solitude, was at times overwhelming. One could stroll the softly lit, sumptuously carpeted corridors from our apartment to the water sports marina and tennis courts topside without encountering another passenger. Upon our return from shore, I was no longer surprised to see the lobby milling with passengers disembarked from the launch one minute, and empty the next. We had learned to go with the flow.

"Room service? We’d like two martinis, please." Cocktails in hand, we stepped onto our private terrace as the ship moved slowly out of the port, and the tiny village faded into the distance. Soon there was nothing to be seen but the clouds, the birds flashing in the setting sun, and the vast, empty sea. From this vantage point we could have been the only people on board as we headed out to sample the best the world—and The World—had to offer. Yet, as the first venture ever of this kind, with no precedent upon which to draw, in at least one sense the ship and its parent company would be plying uncharted waters.

 

It all began the day Knut Kloster Jr., a Norwegian, sat down and asked himself the question: What is the good life? He decided it is the simple things, the opportunity to reflect, to learn, to read a book, and to see the world at one’s own pace. Another man may have settled for a subscription to the Book of the Month Club and cable hookup to the Travel Channel. But since Kloster’s family owned the Royal Viking and Norwegian Cruise Lines, he envisioned something grander: a ship where people could live and learn, expanding their minds while satisfying their wanderlust, without ever having to pack and unpack again.

As for the prospective voyagers for this lifelong odyssey, Kloster knew precisely where to find them. The Royal Viking Lines’ own figures showed that 70 percent of its clientele were repeat passengers, with some of them cruising six months out of the year. Furthermore, when booking their cruises they would demand the same cabins, the same stewards, and the same tables and waiters in the dining rooms. How would they like to extend this equation and make a luxury ship their home?

In 1997, a new company, ResidenSea Ltd., was formed in the Bahamas to finance, build, and market just such a ship.

The residences would be the most luxurious ever on a commercial ship. With 1,106 to 3,206 square feet of space in five basic floor plans, they would be five to 10 times the size of conventional staterooms, with double-door entrances and marbled bathrooms off every bedroom.

Meanwhile, sales efforts appeared to be on track, and in December 2000, ResidenSea announced that it expected the residences to be fully sold by the 2001 launch. More precisely, the apartments would be leased, rather than sold, with prices ranging from about $2.5 million to $7.5 million with an additional 5 percent annual fee to cover maid service and other maintenance expenses.

In one sense, however, The World recalled J.P. Morgan’s advice regarding yachts: If you have to ask the price, you can’t afford it. Or, as ResidenSea CEO Frédy Dellis was wont to proclaim, "We’re not selling an investment, we’re selling a lifestyle." Either way, the apartments would have to be paid for in cash, because moneylenders are reluctant to mortgage a depreciating asset, much less one that might be bound for the China Sea at a time when a bank may wish to foreclose.

In addition to the leased apartments, The World’s final blueprints included 88 guest suites for rental to family or friends of apartment owners, prospective buyers, or vacationers who simply wanted to go on a luxury cruise.

In March 2002, three months after the projected launch date, everything was in place, and the first residents began moving into their new pied à mer for the voyage from Oslo to Amsterdam. En route, they would become acquainted with their new neighbors and their new way of life.

 

Where does the population of this brave new world come from? According to ResidenSea, 40 percent are American, 20 percent are British, and another 20 percent hail from continental Europe, with the rest from Asia and South America.

Richard Reed, of Scottsdale, Ariz., operated a chain of karate studios before forming a software business, which he plans to run via the Internet while on board approximately six months of the year. What he finds especially appealing is the community feel to the ship. "I had a ski lodge in Breckenridge [Colorado] for 14 years and never met the guy next to me. Here, you’re sharing a space 600 feet long and 100 feet wide. You can’t help but meet your neighbors." Fortunately, the apartment owners all get along for the most part, says Reed. "We’ve got Friday night poker games, gin games, I have my regular golfing buddies. There’s always plenty to do."

Indeed, the ship offers everything one might desire from a luxury liner. There is a driving range with biodegradable golf balls, a computerized golf course simulator, and the world’s only shipboard putting green with real grass. Nearby stand the world’s only shipboard full-size tennis court and paddle tennis court, an outdoor swimming pool (an indoor pool is located belowdecks), a jogging track, and a fitness center. Aromatherapy, reflexology, lymph node drainage, and body shaping are just some of the treatments available from the Clinique La Prairie spa. A personal shopper will appear on one’s threshold with a bottle of Charles Heidsieck Champagne and assist with purchases from The World’s boutique or its Graff Diamonds of London shop.

The dining possibilities include French fusion at Portraits, sushi at East, Mediteranean at Tides, and California Coastal at the Marina. There is a deli that dispenses caviar, Champagnes, wines, and other foodstuffs along with groceries and light-dining dishes.

Apartment owners also have the option of summoning executive chef Peppy Schlupper, formerly of Vienna’s famed Drei Husaren, the ship’s sommelier, pastry chef, and a waiter and bartender to their apartment to create a truly memorable dining experience.

For all the activities on board, there is ample opportunity for The World’s passengers to dine, shop, or sightsee on shore, because the ship is scheduled to spend approximately half the year in various ports, with stays averaging 21/2 days. Abercrombie & Kent excursions offer residents the opportunity to explore such natural and man-made wonders as Machu Picchu in Peru, Moorish castles in Spain, and the volcanoes of Hawaii. There are a few glitches to be ironed out, says Jim Bisciglia of Seattle’s Specialty Cruise & Villas, but in general The World far exceeded his expectations. "I don’t think they really need so many restaurants," says Bisciglia. "So many of the apartment owners dine in their homes that the restaurants seem kind of empty. But the food has been remarkable, a cut above anything I’ve ever experienced on a ship. And I’ve been on a lot of ships."

The cuisine and recreational opportunities and excursions aside, says apartment-owner Reed, the real pleasure comes from being part of something new and unprecedented. "We’re all entrepreneurs, risk takers. And this has all been a great adventure."

If the scenario suggested by some of The World’s early leaseholders is any omen, it may turn out to be more of an adventure than Reed or his fellow residents intended. In a lawsuit filed last spring in the U.S. District Court for the Southern District of New York, seven families who had made deposits on a total of eight apartments alleged that ResidenSea was insolvent and that if ResidenSea were to go bankrupt, the residents could lose their lavishly furnished, multimillion-dollar, seagoing Xanadus.

 

The World’s financial stability has been the topic of speculation in both the travel and international shipbuilding communities since its launch. Despite ResidenSea’s frequent assertions that the apartments would be 100 percent leased by the launch date, the ship began its exotic journey carrying from $75 million to $100 million in unsold inventory, with 30 of its apartments still on the market. In August, Norway’s Oslo Aftenposten reported that only one additional suite had been sold since the launch and that the company’s creditors were now operating the ship.

Since then, contends a ResidenSea spokesperson, sales have picked up. In October, the company declared that over the preceding six to seven weeks it had closed on an additional five residences, and that overall "about 75 percent" of the apartments have been "sold or reserved." However, according to the plaintiffs’ lawyer, David Ellenhorn of the New York–based firm of Solomon, Zauderer, Ellenhorn, Frischer & Sharp, this figure is misleading because apartments may be "reserved" for a payment of $5,000, a figure he describes as "insignificant" in the context of multimillion-dollar properties. Nonetheless, the 75 percent "sold or reserved" figure means that 25 percent of The World’s apartments remain unsold, as was the case when the ship set sail.

The 88 guest suites, too, have been slow to rent at their original $1,000-per-night rates, says cruise specialist Bisciglia, prompting the company to cut the suite rate to $450 a night.

"The ship was getting a reputation in the travel industry of running empty," says Bisciglia, who sailed on the Norway-to-Scotland leg. "People renting the guest suites weren’t prepared for the lack of crowds, which is, after all, a sign of luxury. They were saying it was kind of depressing to be on a ship that had only 100 or 150 people on it. I was getting e-mails from clients with words like ghost ship."

All of this might not be of great concern to the tenants if their apartments were on land. At sea, however, it may be a different matter. According to ResidenSea, The World’s apartment leases are no different from those associated with traditional condominium ownership. However, as the plaintiffs’ complaint alleges, there is a significant difference between the two. "In a condominium the purchaser receives title to a piece of property which has some inherent value even outside the venture," reads the complaint. "Here, by contrast, if ResidenSea became bankrupt, the Residency Rights would have no value whatsoever, and the value of Residency Rights is totally dependent on the efforts of ResidenSea." Or, as Ellenhorn puts it, "If, as my clients believe, ResidenSea were to go bankrupt, there is no guarantee that the residents would not lose their right to occupy their apartments."

In August 2002, says Ellenhorn, the lawsuit was settled out of court, with the plaintiffs receiving about half of their combined deposits of $4.5 million and being released from their obligation to purchase apartment leases. Since then, ResidenSea has declined to comment on its residents’ property rights except to reiterate that its leases are based on New York condominium law.

Remarkably, and to the company’s credit, ResidenSea has resisted cutting corners in an attempt to reduce operating expenses. "The quality is evident in everything," says Bisciglia. "The suites, the apartments, and the restaurants all make it a marvelous product. The suites were a bargain at $1,000 a night. At $450 it’s the best deal in the deluxe end of the cruising industry, and we’re selling the suites now like hotcakes. It should get enough bodies on board so that the ship will be getting new business by referral soon."

Richard Kaufman, also of Specialty Cruise & Villas, who sailed on the ship’s inaugural leg from Oslo to Amsterdam, is no less enthusiastic about the ship, but he adds, "It may be a great idea at the wrong time. I hope it works out because if it doesn’t, we won’t see anything like it again in our lifetime."

The same thought occurred to me as the ship arrived in Edinburgh, and after five days on board, we disembarked. As we stepped onto shore, an attendant asked how we had enjoyed our time on board. "It was great while it lasted," we told him. We were referring to the cruise. We would hate to say the same about The World.

ResidenSea, 305.264.9090 (apartment leases), 800.970.6601 (guest suites), www.residensea.com

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Copyright by Adriaan Louw
Photo by Darren Setlow
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