Catamaran charter newbie question

[hirtop]

Hello,
I have a friend who presented me with the following very raw business plan for future consideration…I don't know this business at all, therefore I apologize in advance and maybe someone on this forum can give me some good answers, feel free to criticize and why not, make some suggestions. The numbers are looking too good to be true.
The Boat (new)…Leopard 58 Catamaran charter version (six cabins)… replace boat with a new one every 5 years

Scenario:
Location...Caribbean islands (based on USVI)
Trip...7 nights/8 days (1 week)
Estimated trips/year...20
Max people...10 (5 cabins + 1 cabin for the crew)
Potential profit per day...$325 pp/day * 10=$3,250
Total potential income/day...$3,250/day
Total potential revenue/year...$520,000/year (160 average sailing days/year)
Other revenue sources...scuba diving, kitesurfing, SUP, kayak rentals/lessons...not showed here (might offset some of the skipper and cook costs)
Expenses:
Skipper...$300/day
Cook...$150/day
Provisioning (meals)...$500/day…all-inclusive
Fuel....$20/day
Total expenses /day...$970/day
Total above Expenses/year...$155,200/year ($970*160 sailing days/year)
Adjusted Income/year...$364,800/year ($520,000-$155,200)
Other Expenses:
Catamaran Loan...$84,000/year ($1mil loan @ 6% interest/20 years)
Insurance...$17,000/year (premium insurance @ 1.7% of the hull value)
Docking fees...$6,700 (@$33/day long term storage for 205 days)
Maintenance...$5,000 (average in the highs)
Total other expenses/year...$112,700
Net Profit for 160 days of sailing ...$252,100 ($364,800 adjusted income - $112,700 other expenses)
Two more things to consider...
1- Even with half of the potential profit $252k/year these numbers are very attractive
2- I was told that the catamaran could be moved from the Caribbean when the off season starts to a different location as Mediterranean Sea or South Pacific (by a crew or by a large transport boat), therefore is it possible to increase the revenue, number of trips per year.
I am looking forward for your comments.

[carstenb]

Generally I've always adhered to the maxim that "if it sounds too good to be true - it probably is"

I'd question the income numbers. Quite possibly there is a 20 week season - but can you be sure your renting it out the entire 20 weeks?


Also this model is based on renting out to full capacity (10 guests) I'd seriously doubt that.

On the expense side

$500 per day for provisons (all inclusive) - does that include booze? $50 bucks per day per person sounds ok - but the reality is usually different since at those prices your guests will be expecting top of the line food.



$300 for a skipper and $150 for a cook - Top of the line food for $150 per day? You might get a skipper for $300 - but probably cost more

I notice there is no money set aside for cleaning the boat after the sail, doing the laundry etc etc etc - This also costs.

$5000 per year for maintenance is lala land. ON a million dollar boat boat, start figuring $100,000 per year (haul outs, new sails, engine maintenance, antifouling/bottomwashing etc etc etc)

Re docking fees - this boat has to have a home port and you will need to pay for docking there duringhte season (picking up and dropping off guests at least). $33 per day - what planet is this on?

$20 for fuel? no way. I don't know what fuel costs in the carribean or what kind of fuel usage a boat like that has - but it has to burn something like at least a couple of gallons per hour. Think of a few days where you have to sail upwind and you're burning something like 20-30 gallons. Not on $20 per day.

I'd ask to see an income statement/balance sheet from a boat actually doing this. These numbers (to me) seem to be grabbed out of thin air.

Lastly - you're running a business which will requrie you to carry insurance on your guests. What if one of them drowns on the trip? Or falls and gets hurt? Your $17,000 doesn't buy that


Just my 2 cents

[44'cruisingcat]

Yeah, just two cents worth, but ignoring it could cost an awful lot more than that...

[Steel sails]

Assume you only rent 75% of the available so knock 120k of
Increase your maintenance and insurance to 70k and 30k
Assume the boat depreciates by 1/2 in 5 years at which time it won't be a modern vessel getting top dollar
Now you are losing 50k year
Bet mines closer than yours?
On the other hand if you and your friend are the captain and cook and you can do your own maintenance and cleaning, it will get you a nice lifestyle.
Regards
Paul

[Four Coconuts]

You'll need to market the vessel. Most high end charters go through agents, so assume 15-20% for them. A bank will also ask for a rundown of your experience prior to forking over a $1m loan.

[Four Coconuts]

Getting back to agents for a minute: agents value their clients very much. They want repeat clients and want to protect their reputation. In order to market the boat you would need to go to the annual charter show in the Virgins. Agents shy away from boats in their first year because unknowns. The only way to get around this is to hire an experienced crew who are already known. They are tough to come by, but not impossible if you offer guaranteed income.

[Sand crab]

I think you will have to get a Jones Act waiver to charter a foreign made boat in the USVI. It can be done but is another issue.
Moving the boat around to the Med or So Pacific presents legal challenges. Was it Tahiti that requires a 20% tax based on the value of the boat to charter there? Many other countries have laws (fees, taxes) regarding foreign owned boats doing business in their waters so that's more hoops and expense. I don't think moving the boat back and forth from the Carib to So. Pacific is practical anyway. It's just too far and takes too long. The Med is doable.

[belizesailor]

Wait a minute. Isn't this EXACT same question posted on another thread?