The CEO of Royal Caribbean has stated that the new large ships such as Icon are cash flow positive at 35% occupancy vs 50% occupancy for previous generations. The larger ships also have additional revenue generating experiences onboard so it is likely the average revenue per passenger is higher than the current industry average.
You've got to factor in deprecation. If the vessel cost $2b and lasts 20 years you need to repay $200m a year to repay the amount over 20 years.
However I suspect 8% would be far higher that the rate they'd get.
You'd also have to include maintenence costs, and also the reduction in revenue as it gets older (people will presumably not pay as much to travel on an older ship than a newer one), or the refurb costs you'll need to offset.
On the other hand inflation has to be factored in. At 2% that debt will reduce 30% over the period.
I feel like it’s just easier to use the existing cruise companies’ public financials. It looks like 10% to 15% are the real world profit margins, but with quite a bit of volatility.
How long does this supposed fraud take to show up? Carnival and Caribbean have been doing business for decades, and Norwegian has been public since 2011.
Surely, it would have impacted the bottom line by now at at least one of those 3 businesses.
I don't understand the point you are trying to make. If the estimates are incorrect, then they will show up after decades of operating as a business, being realized via the sale price of the ships or repair costs or whatever. The profit margins reported in the 10-Ks seem like an an accurate estimate of what a big cruise company can expect to earn, based on the current best management practices and technology.
Taking a boat to go on vacation seems like a stronger industry than you're making it out to be. These are huge companies with highly scrutinized finances and obvious capital expenses.
Revenue: 52 weeks of sailing x 5.6k passengers [1] x 1.8k $/week [2] ~= 525m $/year
Costs: Interest [3] 160m $/year + Crew [4] 118m $/year + Hospitality [6] 200m $/year = 478m $/year
Profit ~= 47m $/year or ~9%
[1] https://en.wikipedia.org/wiki/List_of_largest_cruise_ships [2] https://www.cruzely.com/heres-how-much-money-cruise-ships-ma... [3] 8% on 2b$ [4] Crew: 50k $/year * 2350 crew [5], just guessing the costs here, including all accomodation + living costs, probably still to high? [5] https://en.wikipedia.org/wiki/Icon_of_the_Seas [6] Hospitality: 100 $/guest/day? = 52 * 7 * 100 * 5.6k = 200m $/year