In these tough economic times---and who among us is not besotted with dire economic news these days---a tiny leisure travel company, defying most financial indicators, is on a roll.
That tiny company is SeaDream Yacht Club, operator of the elite, twin, mega-yacht cruisers SeaDream I and II, each accommodating no more than 55 couples. It has just completed the first two quarters of 2008 with 100 percent occupancy.
And the privately owned, ultra-luxury, passenger shipping operation---it doesn’t call itself a cruise line---started in 2001, 10 days before 9/11. In recent years this has become the little yachting company that constantly exceeds its financial expectations.
And just to back up that 2008, first half success let’s consult the GPS on the company’s business plan dashboard and find out where it has been and where it is now:
· Utilization of Inventory---In 2006 SeaDream experienced 99 percent utilization of inventory (staterooms) and in 2007 achieved 100+ percent utilization. Year to date in 2008 it has achieved 100+ percent utilization. This is impressive by any standard!
· Revenue Growth---There has been a steady upward trajectory in revenue of 18.9 percent growth each year since the company’s inception with no increase in inventory.
· Average Per Diem---From 2006 SeaDream’s average per diem has increased from $536 to $653 per person through the first half of 2008. For 2009 the company is experiencing an 8 percent per diem increase. This leads to excellent yields!
If you look at all of the above it spells profitability. Many industry observers thought that small ships could not achieve proper profits. Again, this maverick company proves it is an exception.
And how does SeaDream’s 2009 look? Advance bookings are 11 percent ahead of this time in 2008. So the company is well positioned to develop a better bottom line picture for next year.
What’s going on here?
The Conservative Approach
SeaDream’s Larry Pimentel, President, CEO and Co-Owner says: “Certainly, in view of what’s taking place with the global economy, we are conservative business people. Business conservatism is, and has been, our economic mantra since we began in the fall of 2001. Frankly we watch every penny and cost containment is an obsession
“But, he adds quickly, “While our style is to employ budgetary conservatism and to eschew showy spending, at the same time we want to offer the best in value to our upscale clients.
The Aggressive Approach
Pimentel continues: “Even though we are proceeding with confidence into the second half of 2008, and things are looking equally good for us, and even though we are ahead of the game at this point for 2009, we can’t rest on our laurels.
“Certainly we are concerned about fuel prices, the credit crunch and the global economy in general, but we believe this downturn is part of an historical cyclical pattern. Our goal is to turn short-term economic concerns into long-term gains.
“We are convinced that with our position at the very top of the luxury spectrum, our affluent customers are not frivolous big spenders. They are thoughtful luxury lovers who seek value. That’s what we have been providing them with and that’s what we plan to accelerate even higher on our value tachometer.
“In short we want nothing less than to be the luxury value and profit leader in 2009. We are ratcheting up our value proposition,” states Pimentel.
Standing Still is Not an Option
“We will be announcing a series of aggressive marketing initiatives in the coming days to assure that SeaDream is the luxury value and profit leader in 2009 and beyond. Standing still is not an option,” Pimentel says.