🗝️ The Ritz-Carlton Yacht Collection reported some tough financial results. What does this tell us?

The company, 55 percent owned by private equity firm Oaktree, recently told bondholders it does not expect to be profitable until 2027.

They projected 85 to 90 percent occupancy by 2026 and came in around 50 percent in early 2025.

The $300 million in bonds issued a year ago have dropped around 16 points, and the company needs an additional $440 million from shareholders, with $312 million due before the end of June 2026.

Reports from my own clients:

1) hard product is great

2) food is solid but can be inconsistent. It’s annoying you have to make reservations the second you board the ship.

3) shore excursions are overpriced and absolutely terrible

My clients who have enjoyed the experience most just booked their own private excursions through a DMC I arranged.

How is the ownership structured?

The operating entity, Cruise Yacht OpCo Ltd, is owned by Oaktree Capital at 55 percent, Mohari Hospitality at 30 percent, and the Singapore government at 15 percent.

This is basically a hotel franchise relationship. Marriott can set standards and withdraw the license if they are violated egregiously, but day-to-day execution is entirely on the operator. When a franchised Ritz-Carlton hotel has a bad service night, Marriott does not intervene in real time.

The same dynamic applies here, with the added complexity that the operator is a private equity-backed startup under significant financial pressure, which rarely produces better service consistency.

Does the market make sense?

Orient Express, Ritz Carlton Yacht, Aman, Four Seasons Yacht - these brands are positioning themselves as cruises for people who do not typically cruise.

So why are they all charging into a space where the first mover is struggling?

Share of Wallet. A yacht lets these brands capture more of their existing clients’ travel spend without building another property on land.

The company’s own CEO has claimed that 75 percent of guests are Bonvoy members.

However, the expectations behind that brand can also cause a value gap.

Cruise Critic’s aggregate rating is at 3.5 out of 5, with 63 reviews split fairly evenly between excellent and poor. 

Guests who love it tend to be repeat sailors who knew what they were getting. Guests who had a bad experience say that the Ritz-Carlton name sets an expectation the product does not always meet at this price point.

Do these compare to a private charter?

I brokered a fair amount of charters, and clients are always blown away by the pricing once you add in provisioning and crew gratuity etc. I’m not talking about catamarans in the BVIs bc that’s not the same thing.

A 100-foot crewed motor yacht in the Mediterranean runs minimum $130,000 to $160,000 per week all-in once you add in all the costs.

The hotel-branded ships do make more financial sense in this comparison, but with less freedom and privacy obviously.

What do you think? Will these products continue to underperform?