(Bloomberg) -- Marriott is doubling down on cruising, not just with its Ritz-Carlton Yacht Collection but with other hotel brands, too. Along the way, it plans to expand from three ships to as many as 10—some superyachts, some not.
The Collection—which licenses the Ritz-Carlton name from Marriott International Inc.—is also eyeing an initial public offering within three years, Jim Murren, the company’s executive chairman and chief executive officer, said in an interview with Bloomberg.
He says he envisions “a large fleet of exclusive resorts at sea.” To build that fleet, he is currently raising as much as $400 million, in collaboration with Citigroup Inc. The funding round will help the company—majority backed by Oaktree Capital Management, with additional investments from Mohari Hospitality Ltd. and GIC—fast-track ships four and five. The IPO would follow, Murren says.
The company has a compelling argument for growth: The first yacht, Evrima, sold out this summer’s Mediterranean sailings at average fares of $1,500 per person, per day. The average passenger age is 53—younger than at most cruise lines—with at least 50% of guests cruising for their first time; 75 percent are Marriott Bonvoy members, Murren says. “These are high-net-worth individuals that if they are not cruising with us, they are on a safari some place or have rented a beautiful villa in the Mediterranean,” he says.
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Murren, who joined the Collection’s board early this year and has led the company since May, spoke about the plans just before the company’s second ship, the 448-passenger Ilma, hit the water for the first time in what is known as a float-out. The brand’s entire management team was in attendance at Chantiers de l’Atlantique in Saint-Nazaire, France.
In October 2022, the company less-ceremoniously celebrated launch of its first superyacht, the Spanish-built, 298-passenger Evrima, which debuted after a delay of nearly three years, mostly due to Covid-19-related construction issues.
Murren, the former CEO of MGM Resort International, says the big question now is where to go from here. “Expedition ships? Larger ships? More intimate, smaller ships?,” he says. “And what [Marriott] brands do we use?”
The most likely targets of Marriott’s eight luxury brands, he hints, are Bulgari, Edition and perhaps W. “It’s not going to be just Ritz-Carlton product, although that is certainly the most fertile territory for us to mine, that 25 million-name database,” Mullen explains. That may be the most moneyed part of Marriott’s pot, but there’s much more to draw from than that, with 177 million total Marriott Bonvoy members registered.
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Another yacht, Luminara, will follow in 2025. Ships four and five will represent a stylistic departure from their predecessors.
Ilma and Luminara will follow in the footsteps of Evrima, cruising the Mediterranean in summer and Caribbean in winter, Mullen says. Future ships will venture to additional destinations. “We would like to get into the Pacific for ships four and five,” he explains. “Australia and New Zealand, Singapore.”
Unlike Evrima, which uses traditional marine fuel, Ilma looks to cut its environmental footprint by running on four dual-fuel engines with liquified natural gas as the main fuel source, reducing emissions, according to the company. The ship will be able to switch to sustainable fuel in the future, the company said. The Collection doesn’t publish a sustainability report, so comparisons with competitors are difficult.
Ritz-Carlton is facing competition from other luxury hotel brands—with Four Seasons, Aman and Orient Express (an Accor-owned brand) all announcing they will enter cruise with new ships. Four Seasons Yachts said this week that inaugural sailings on its first vessel, due in 2025, would be invitation-only, due to demand, with spots first being offered to Four Seasons hotel guests and “valued travel partners.”
“We think this particular type of [luxury hotel] guest represents a $5 billion market,” says. “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.”
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