Haven’t you always wanted to go on a cruise? Open waters, the warm sun on your shoulders, and the endless activities on board – these are all great reasons to enjoy a vacation on a cruise ship. While many of us dream of going on a cruise, I’d say that a very minute percent of us have actually considered owning a cruise-line of our own. Sure, the initial start-up cost is most likely in the millions, but imagine how great it would be to earn a passive income from your very own cruise ship?!
The Upfront Costs of a Cruiseliner
Many cruiseliners can run you $300 million or more, but these are the brand-new, high-end ships for the big dogs. I would start out with a ship similar to the one above. It was originally built in 1967, but has had some recent updates. Instead of a $300 million price tag, this beastly boat will run you about $10 million.
This ship has 288 cabins, a couple of restaurants, a few casinos, a movie theatre, a beauty salon, a swimming pool on the deck, and even has it’s own hospital! The maximum capacity is 680 passengers.
With a ship of this magnitude, it’s obviously going to cost some money to maintain.
- Fuel – the average cruise ship gets 30 feet to the gallon (at $5/gallon)
- 25 Employees and the captain = $800,000/year
- Ship wear and tear repair = $100,000/year
The employee and the ship’s repair costs are constant, but the fuel costs are going to be variable, depending on the distance of the cruise. You’ll see how I work this in the overall calculation for potential earnings.
Set Your Sights On a Cruise to the Bahamas
Let’s say our port is in Ft. Lauderdale, Florida and our regular cruise route is to the Grand Bahama and back – a round-trip distance of 130 miles. Typical cruises cost about $200 per person for a 3 day, 2 night trip to the Bahamas, but since our ship isn’t exactly the Royal Caribbean, we’ll charge only $170 per person. Assuming that we book 80% of our full-capacity, let’s calculate how much our earnings will be per trip.
- 544 passengers at $170 per person = $92,480
- Food, Alcohol, and Retail Profits ($100 per person) = $54,400
- Employees = $16,000
- Wear and Tear = $2,000
- Fuel = $114,400
Profits Per Outing
- Income = $146,880
- Expenses = $132,400
- Profit = $14,480 per trip
Proties For the Year
If we make this trip 50 times per year (which is actually a pretty full schedule), our estimated earnings would be $724,000. Those are pretty slim margins considering the initial cost of the ship was over $10 million!
I honestly thought that this passive income idea would have generated a much higher revenue, but it appears that the fuel expenses are just too much these days – they are eating up all of the profits!
Sure, it would be fun to own a cruise-liner, but it would take about 15 years to recoup your initial investment. By that time, you’re going to have to buy a new boat!