The Ritz-Carlton luxury hotel chain announced its plans to enter the cruise business with three ultra-luxury ships. Inspired by the modern yacht, they're meant to turn the cruise-ship experience on its head.

© Ritz-Carlton

Any Ritz-Carlton is the epitome of a luxury hotel. Soon this same level of lux accommodation will hit the seas with the Ritz-Carlton Yacht Collection and its three exclusive cruise ships. Ritz-Carlton is the first hotel chain to enter the cruise ship market, and its a bold next step for the brand, which already has glamorous residences and six-star Reserve resorts to its name.

When the hotel chain talks about its new venture, it never refers to "cruise ships," but rather yachts, which the company finds better describes this luxury offering. The venture is a joint project with the Swedish company Tillberg Design, which is a leader in the cruise ship design industry. They were told to start from zero, and leave behind any tried and true rules of industry design.

© Marriott International

From first glance it's evident that the ships were inspired by yachts. The silhouette of the ships is slim, long, and elegant. It's supposed to make you turn your head the way you might if a flashy car passed by, explained Fredrik Johansson of Tillberg Design. "Most ships look mostly the same-but this one will be different. I want the Maserati effect. I want people to see it and imagine how stunning it is on the interior." The ship will be 190 meters long (roughly 623 feet). There are 149 suites and up to 298 guests can enjoy the accommodations. While the outer measurements are similar to other ships of this class, they usually take double the amount of passengers, up to 600. For comparison, a smaller capacity ship, such as Le Pontant, has 132 rooms, but is only around 130 meters long (around 426 feet), offering much less interior space.

This new cruise ship concept is also evident in the interior design. Inside, there is open space instead of the usual division into restaurants, bars, and casinos. Thanks to its openness the interior has much more light, and a natural flow in the design. Yet the guests still have plenty of privacy as well as a sense of intimacy, all while having plenty of attractions at their fingertips. There will be five restaurants, which will seat a couple dozen each, open round the clock with no fixed meal times or allocated seating, all this to make guests feel as if they are on a yacht instead of a cruise, fighting the crowds for their lunch. At the stern of the ship there is a platform for lounging and a swimming pool, as well as a place to borrow kayaks or small boats. On the roof is a deck with a 270 degree view, with a bar open during the day and a club later at night. You won't find a casino aboard, they left that behind with the moniker "cruise."

We tried to create a ship that would be everything a traditional cruise ship wasn't. A place without lines, without crowds, without raised voices, simply a beautiful place for beautiful people." Fredrik Johannson, owner and director of Tillberg Design.
© Ritz-Carlton

Ritz-Carlton luxury won't be absent from the rooms either. To differentiate the rooms from ones you might find on a traditional cruise, they're calling them "suites" instead of "cabins." Each of the 149 suites will have a balcony and high ceilings. The decor and furnishings will be up to par with Ritz-Carlton hotels. The restaurants too, have high quality offerings, much like the Ritz-Carlton Wolfsburg, which features the restaurant Aqua and whose chef Sven Elferfeld has received three Michelin stars. If spas are more to guests liking, they can spend an afternoon being pampered, followed by a drink in the Panorama Lounge.

Herve Humler, COO of Ritz-Carlton Hotel Group, admits that entering the cruise market has been on his mind for the last 12 years. To justify his interest, he notes that the cruise industry have been growing at a rate of 8.5% since 1981. Yet there are few luxury options on the market that can accommodate the most discerning clients. Around 400,000 Ritz-Carlton clients go on cruises, according to the hotel's data, so why not tap into this base? With 12,000 guests per year needed to make a single vessel profitable, Humler thinks starting with three ships will be a secure but successful debut in the market.

"I don't want to stop in Marseilles. It's a big commercial port. I prefer to drop anchor in St. Tropez." Douglas Prothero, Managing Director of the Ritz-Carlton Yacht Collection
© Ritz-Carlton

In terms of securing guests, the Ritz-Carlton brand will help lure a wealthier clientele, as will the allure of a brand new venture, designed to appeal to those who would otherwise forgo cruises, especially a younger wealth crowd whose tastes differ from their parents. This means not only changing the design of the typical cruise ship, but also its destinations. Usually smaller luxury trips operate in Scandinavian waters or around the polar regions. Yet these yacht cruises are going to take more typical routes such as through the Caribbean or Mediterranean waters, but due to their smaller sizes they will be able to access smaller ports, for example Capri, Portofino, St. Barts, Carthage, and St. Tropez. Each tour will last seven to ten days with passengers spending more time on land than at sea. Instead of the typical seven ports in seven days, the Ritz-Carlton will offer four ports in seven days, with exciting outings coordinated with local chefs and artisans.

The first ship, which should hit the seas by the end of 2019, will travel between Europe and North America, visiting the Mediterranean Coast, New England, Latin America and the Caribbean. The second vessel will launch by 2022 and will sail the Great Lakes region. The third will travel the Pacific by 2023. Each unit will cost about $200 million USD. Oaktree will be a partner in this investment.

"This is a unique combination of yachting and cruising marks an new road forward for luxury travel for discerning guests who want to travel the world in a relaxed, elegant and comfortable atmosphere with the highest level of individualized service." Herve Hemler, COO Ritz-Carlton Company
© Ritz-Carlton

The first ship will start taking reservations in May 2018. The prices for a seven to ten day cruise haven't been made public yet, but they won't come cheap. The Ritz-Carlton is targeting the richest 1% of travelers. First they'll target Europe and North America, and then expand their customer-base to the Asian market. For some, an additional attraction could be taking advantage of the Marriott Rewards program. However some market watchers are less enthusiastic about this venture. In The Palm Beach Post Stewart Chiron writes that many companies have offered luxury cruises with exquisite dining options, such as Windstar by Carnival Corp. (CCL  ) and Regent from Norwegian Cruise Line (NCLH  ). Younger clients with money to burn also look to Virgin Cruises.

This is not the first time Ritz-Carlton has tired to make its mark at sea. Swiss hotelier Ceasar Ritz, who founded the company, tried along with the chef of his hotel, to launch Ritz restaurants on the ocean liners SS Amerika and SS Emperor in 1905 and 1913 respectively, but WWI ended these ventures shortly after. Since 1995, Ritz-Carlton has belonged to Marriott International (MAR  ) and has been its highest luxury brand since. There are 91 Ritz-Carlton hotels around the world, as well as 40 residences in 30 countries.

The Marriott International Group has 30 brands under its umbrella in 124 countries. Founded by John Marriott in 1926, the company has become the largest hotel company in the world, far ahead of Hilton Worldwide (HLT  ) and InterContinental (IHG  ). It is known for its innovation not only at sea, but on land as well. It has a test facility in Boston, where it is currently experimenting with Siri (AAPL  ) and Alexa (AMZN  ), to see which virtual assistant will serve its guests better.