How to Start a Cruise Line

A cruise line is a company that operates ships that are designed for leisure travel on the ocean, river, or other waterways. These ships typically offer passengers a variety of activities and amenities, such as dining, entertainment, and recreational activities, while traveling to multiple destinations.

Cruise lines operate on a scheduled itinerary, with stops at various ports of call along the way, and offer a range of cruise durations, from short weekend getaways to multi-week voyages. The cruise industry is a significant part of the tourism and travel sector, with many different cruise lines offering a variety of experiences to cater to different types of travelers.

Available data show that the cruise line industry worldwide generated 13.6 billion US dollars in revenue in 2022, with the US being the largest contributor in terms of paying passengers. The total number of cruise ship passengers stood at over 13 million as of 2021.

The cruise industry is expected to reach $25.1 billion in revenue by the end of 2023. The cruise industry supports over one million jobs.

Steps on How to Start a Cruise Line Business

1. Conduct Market Research

A cruise line business needs market research to identify the demand for its services, potential customers, competition, and pricing strategies. This research can be conducted through surveys, interviews, and online research to gather insights into market trends, consumer preferences, and behaviors.

The business can use this information to develop a marketing strategy that targets the right audience, communicates the unique value proposition, and drives sales growth.

a. Who is the Target Market for a Cruise Line Business?

• Baby Boomers and Seniors
• Families with children
• Young Couples and Honeymooners
• Adventure Travelers.

b. Is Cruise Line Business a Profitable Business?

The profitability of a cruise line business can vary depending on various factors such as location, operating costs, and competition. However, if the business is managed efficiently and has a good location, it can be a lucrative and profitable venture.

c. Are There Existing Niches in the Industry?

Although there are no existing niches when it comes to cruise line business, some cruise line companies specialize in long-distance moves, while others may focus on local or regional moves.

d. Who are the Major Competitors?

• Royal Caribbean International
• Carnival Cruise Line
• Norwegian Cruise Line
• Princess Cruises
• Holland America Line
• Celebrity Cruises
• MSC Cruises
• Disney Cruise Line
• Cunard Line
• Costa Cruises
• Oceania Cruises
• Regent Seven Seas Cruises
• Seabourn Cruise Line
• Silversea Cruises
• Viking Ocean Cruises
• Windstar Cruises
• Crystal Cruises
• Azamara Club Cruises
• AIDA Cruises
• Hurtigruten Cruise Line.

e. Are There County or State Regulations or Zoning Laws for a Cruise Line Business in the United States?

Yes, there are county and state regulations and zoning laws that apply to cruise line businesses in the United States. These laws vary depending on the location and can include regulations related to zoning, building codes, safety, environmental impact, and more.

For example, the Port Authority in each state typically oversees the operation of cruise terminals and ensures compliance with safety and security regulations. Additionally, many states and counties have laws in place regarding noise levels, traffic congestion, and the disposal of waste and sewage.

Cruise lines must also comply with federal regulations, such as those set by the US Coast Guard and the Environmental Protection Agency (EPA), which include safety standards for vessels, environmental regulations, and more.

It is important for cruise line businesses to be familiar with these regulations and laws and to obtain any necessary permits or licenses to operate within a specific jurisdiction. It may also be advisable to consult with an attorney or other legal professional to ensure compliance with all applicable laws and regulations

f. Is There a Franchise for Cruise Line Business?

No, there are no franchise opportunities for cruise line business.

g. What Do You Need to Start a Cruise Line Business?

• Reliable and well-maintained ships
• Permits and licenses
• Equipment and supplies
• Business plan
• Marketing strategy
• Insurance
• Employees
• Finance

2. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a cruise line business are;

Creative Cruise Line Business Name ideas

• John Barry ® Cruise Line Co.
• Captain Benjamin™ Cruise Line Company, LLC
• Lisa Nowak® Cruise Line Company, Inc.
• Chesley Sullenberger® Cruise Line Company, Inc.
• Richard Phillips® Cruise Line Company
• Charles Light® Cruise Line Company
• Edward John Smith® Cruise Line Company, Inc.
• Blue Rave® Cruise Line Company, Inc.
• Roald Amundsen® Cruise Line Company
• Ernest Shackleton® Cruise Line Company
• Robert Fitz® Cruise Line Company, LLC
• Joshua Slocum® Cruise Line Company, Inc.
• Horatio Nelson® Cruise Line Company, Inc.
• William Clark® Cruise Line Company, LLC
• Meriwether Lewis™ Cruise Line Company, Inc.
• George Vancouver® Cruise Line Company, Inc.
• John Paul Jones® Cruise Line Company, LLC
• William Bligh™ Cruise Line Company, LLC
• Sir Francis Drake™ Cruise Line Company, Inc.
• James Cook® Cruise Line Company, LLC.

3. Register Your Business

a. What Type of Business Structure is Best for a Cruise Line Business?

The most suitable business structure for a cruise line company is determined by a variety of factors, including the size of the company, the number of owners, the level of personal liability the owners are ready to accept, and the tax implications of the various business forms.

However, we normally advocate entering with a limited liability company. An LLC is a hybrid corporate form that provides the flexibility of a partnership while also providing its owners with limited liability protection. An LLC can have one or more owners, and the owners are not personally accountable for the debts or liabilities of the business. This business form is frequently used for small to medium-sized organizations.

b. Steps to Form an LLC

• Choose a Name for Your LLC.
• File Articles of Organization.
• Choose a registered agent.
• Decide on member vs. manager management.
• Create an LLC operating agreement.
• Comply with other tax and regulatory requirements.
• File annual reports.

c. What Type of License is Needed to Open a Cruise Line Business?

• Business License
• Vessel documentation
• Certificate of Inspection
• Merchant Mariner’s Credential (MMC)
• Environmental permits
• Alcohol and tobacco permits
• Immigration and labor permits
• Port permits.

d. What Type of Certification is Needed to start a Cruise line Business?

You don’t need any certifications to start a cruise line business.

e. What Documents are Needed to Open a Cruise Line Business?

• Business License
• Articles of Incorporation
• Tax Identification Number also known as Employer Identification Number (EIN)
• State Permits
• Insurance
• Vessel documentation
• Certificate of Inspection
• Merchant Mariner’s Credential (MMC)
• Environmental permits
• Alcohol and tobacco permits
• Immigration and labor permits
• Port permits
• Business plan

f. Do You Need a Trademark, Copyright, or Patent?

A cruise line business may need to obtain a trademark, copyright, or patent, depending on the specific aspects of the business. A cruise line business may need to obtain a trademark for its name, logo, or other distinctive branding elements.

It may need to obtain a copyright for its website content, promotional materials, and any other creative works it produces. A cruise line business may need to obtain a patent for any innovative technologies or processes it develops, such as a new propulsion system or onboard entertainment system.

4. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Cruise Line Business?

The cost to start a cruise line business can vary widely depending on a number of factors, such as the size of the company, the type of ships used, the destinations served, and the level of luxury and amenities provided to guests.

But generally, you should budget over two hundred million dollars if you want to start a cruise line business. This is so because you would need over 130 million dollars to purchase a standard and well-equipped ship. For example, a 300-meter containership could cost over $130 million.

b. What are the Costs Involved in Starting a Cruise Line Business?

• Business registration fee: $2,750
• Ship (Equipment and Furnishing inclusive) $170 million
• Supplies: $120,000
• Salaries of Employees: $950,000
• Office and administrative expenses: $80,000
• Permits and licenses: $350,000
• Insurance: $1 million
• Marketing and branding (logo design, website, social media): $22,000

c. What Factors Determine the Cost of Opening a Cruise Line Business?

• The type and size of the vessels can greatly impact the cost. Larger, newer, and more luxurious ships will typically be more expensive.
• The number of crew members required, and their experience level can greatly impact the cost.
• The destinations and itineraries served by the cruise line can impact the cost. For example, offering exotic and remote destinations may require additional permits and other expenses, while offering shorter trips to more popular destinations may be more cost-effective.
• Marketing and advertising
• Permits and licenses
• Technology and equipment such as navigation and communication systems, onboard entertainment systems, and more.
• Infrastructure and operations such as ports of call, onboard amenities, and support services, can also impact the cost.

d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

A cruise line business typically does not require a facility to operate since they operate on the sea. Instead, the business usually requires a dockyard.

e. What are the Ongoing Expenses of a Cruise Line Business?

• Vessel operations and maintenance (fuel costs, repairs and maintenance, insurance, and other related expenses.)
• Crew and staff salaries and benefits.
• Marketing and advertising
• Port fees and taxes
• Ongoing administrative and support staff salaries and benefits, including finance, human resources, and IT staff
• Technology and equipment such as upgrading communication and navigation systems or investing in new onboard amenities
• Renewing or obtaining new permits and licenses
• Infrastructure and operations such as expanding ports of call or developing new onboard amenities must be considered.

f. What is the Average Salary of your Staff?

• Chief Operating Officer (President) – $150,000 Per Year
• Chief Operations Officer (COO) – $100,000 Per Year
• Captain – $100,000 Per Year
• Entertainment Director – $80,000 Per Year
• Head of Human Resources – $70,000 Per Year
• Accountant – $55,000
• Executive Chef – $55,500 Per Year
• Attendants – $40,100 Per Year
• Customer Services Executives -$40,000 Per Year

g. How Do You Get Funding to Start a Cruise Line Business

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell shares to interested investors
• Applying for a loan from your bank/banks
• Source for soft loans from your family members and your friends.

5. Write a Business Plan

a. Executive Summary

The Ubiquitous™ Cruise Line, Inc. is a startup cruise line company that aims to provide an unparalleled experience to its guests. Our company will offer luxurious and innovative cruises with exceptional service, a variety of onboard activities, and exquisite cuisine.

We believe that our unique approach to cruising will appeal to a broad range of travelers, from families to couples, to solo adventurers.

The market for the cruise industry is growing, and we are well-positioned to capture a significant share of this market. Our team has extensive experience in the hospitality industry and has a proven track record of success in managing and growing businesses.

We have carefully researched the market and believe that our company will be successful in meeting the needs and desires of our target market.

Our business model is based on a comprehensive approach to customer service, which we believe will differentiate us from our competitors. We will focus on providing personalized service to our guests and will utilize innovative technologies to enhance the guest experience.

Our onboard amenities will include a variety of dining options, entertainment, and recreational activities that will cater to the diverse interests of our guests.

b. Products and Service

Our cruise line business aims to provide a comprehensive and seamless vacation experience to our guests, offering a range of products and services to cater to their needs and preferences.

c. Mission Statement

At The Ubiquitous™ Cruise Line, Inc., our mission is to provide our guests with an exceptional cruise experience that exceeds their expectations. We aim to create unforgettable memories for our guests by delivering personalized service, exceptional onboard amenities, and exciting shore excursions, all while maintaining the highest standards of safety and sustainability.

Vision Statement

Our vision at The Ubiquitous™ Cruise Line, Inc. is to become a leading cruise line in the industry, recognized for our innovation, exceptional customer service, and commitment to sustainability.

d. Goals and Objectives

The goals and objectives of a cruise line business are to provide a comprehensive and seamless vacation experience to its guests, offering a range of products and services to cater to their needs and preferences.

e. Organizational Structure

• Chief Operating Officer (President)
• Chief Operations Officer (COO)
• Captain
• Entertainment Director
• Head of Human Resources
• Accountant
• Executive Chef
• Attendants
• Customer Services Executives.

Marketing Plan

a. SWOT Analysis

Strength:

• Strong brand recognition and reputation
• Experienced and skilled management team
• Wide range of onboard amenities and activities
• Strong relationships with travel agents and tour operators
• A high degree of customer loyalty
• Competitive pricing and flexible payment options.

Weakness:

• Dependence on economic conditions and consumer spending patterns
• Seasonal fluctuations in demand
• Vulnerability to external factors such as natural disasters, geopolitical events, and health crises
• Limited control over port and destination conditions and infrastructure
• High initial capital and ongoing operational costs
• Competition from established and emerging cruise lines.

Opportunities:

• Growing demand for luxury and niche cruises
• Expansion into new markets and regions
• Introduction of new ships and onboard features
• Partnerships and collaborations with other travel industry players
• Leveraging technology to enhance the guest experience and streamline operations
• Increasing focus on sustainable tourism and environmental stewardship.

Threat:

• Economic downturns and recessions
• Geopolitical instability and terrorism threats
• Climate change and environmental regulations
• Health and safety concerns, including infectious disease outbreaks
• Evolving consumer preferences and changing travel patterns
• Increasing competition from land-based vacations and other forms of travel.

b. How Do Cruise Line Businesses Make Money?

Cruise line businesses make money primarily through the sale of tickets to their guests, as well as the onboard spending of those guests.

c. Payment Options

• Credit or Debit Card
• Cash
• Electronic Payment Systems such as PayPal or Venmo
• Checks
• Bank Transfers.

d. Sales & Advertising Strategies

• Promote through travel agents.
• Offer early booking discounts as an excellent way to incentivize customers to book their trips early.
• Use social media such as Facebook, Instagram, Twitter, et al for promoting the cruise line businesses.
• Leverage partnerships
• Use loyalty programs (these programs can include discounts, free onboard amenities, or other perks that can incentivize customers to book with the same cruise line again.)
• Participate in trade shows and events
• Offer referral incentives.

Financial Projection

a. How Much Should You Charge for Your Product/Service?

The cost of a cruise can vary widely depending on a number of factors, including the cruise line, the destination, the length of the cruise, the type of cabin, and the time of year. On average, a 7-day cruise can cost anywhere from $500 to $3,000 per person, depending on the factors mentioned above. However, some luxury cruises can cost upwards of $10,000 per person or more.

b. How Much Profit Do Cruise Line Business Owners Make a Year?

The amount of profit a cruise line business owner can make in a year varies depending on several factors, such as the size of the business, the number of ships in the fleet, the level of competition, and the economic conditions of the industry.

c. What Factors Determine the Amount of Profit to Be Made?

• The capacity of the cruise line business
• The location of the cruise line business is covering
• The management style of the cruise line business
• The business approach of the cruise line business
• The advertising and marketing strategies adopted by the cruise line business.
• The additional service offerings of the cruise line business.

d. What is the Profit Margin of a Cruise line Business?

According to a report by Statista, the global cruise industry had an operating profit margin of around 16 percent in 2019. However, it is important to note that this is an average figure and the profit margins for individual companies can vary significantly.

e. What is the Sales Forecast?

Below is the sales forecast for a cruise line business. It is based on the location of the business and other factors as it relates to such startups in the United States;

• First Fiscal Year: $12 million
• Second Fiscal Year: $20 million
• Third Fiscal Year: $30 million

6. Set Up your Shop/Office

a. How Do You Choose a Perfect Location for a Cruise Line Business?

• The demography of the location
• The demand for the services offered by cruise line companies in the location
• The purchasing power of businesses and residents of the location
• Accessibility of the location
• The local laws and regulations in the community/state
• Availability of sea that leads to other tourist locations.

b. What State and City are Best to Open a Cruise Line Business?

• Miami, Florida
• Fort Lauderdale, Florida
• Seattle, Washington
• New Orleans, Louisiana
• Galveston, Texas
• San Diego, California
• Boston, Massachusetts
• Honolulu, Hawaii
• Baltimore, Maryland
• Los Angeles, California.

c. What Equipment is Needed to Operate a Cruise Line Business?

• Cruise ships
• Navigation and communication equipment such as radar, GPS, communication radios, and other equipment.
• Safety and security equipment including lifeboats, fire suppression systems, and security cameras and personnel.
• Food and beverage equipment
• Entertainment equipment such as theaters, casinos, and music venues.
• Onboard amenities such as pumps, filters, and exercise machines.
• Maintenance equipment such as welding machines, power tools, and cranes.
• Administrative equipment such as computers, office furniture, and other supplies.

7. Hire Employees

If you are looking to start a cruise line, then you should make plans to hire employees. A cruise line business cannot be run by an individual, it requires a team.

8. Launch the Business Proper

Organizing a launch party when opening a cruise line business can be a great way to generate buzz and excitement around the new venture. A launch party can help to attract potential customers, create a positive first impression, and build brand awareness.

a. What Makes a Cruise Line Business Successful?

• Providing a memorable and enjoyable experience to customers
• Constantly innovating and introducing new offerings to attract and retain customers
• Safety and reliability
• Effective marketing and branding strategies
• Managing costs effectively

b. What Happens During a Typical Day at a Cruise Line Business?

• Guest services such as providing information on activities and events, helping with reservations, and resolving any issues that may arise.
• Food and beverage service
• Entertainment and activities such as live performances, games, sports, and other onboard activities.
• Keeping guest cabins and public areas clean and tidy throughout the day
• Maintenance and repairs
• Administrative tasks such as managing reservations, handling customer inquiries and complaints, and managing finances and budgets.
• Throughout the day, there are also team meetings and briefings to ensure all staff is informed of any changes or updates that may affect their work.

c. What Skills and Experience Do You Need to Build a Cruise Line Business?

• Leadership and management skills
• Engineering and technical expertise
• Customer services skills
• Interpersonal skill
• Good Accounting and bookkeeping skills
• Business management skills
• Work experience in the cruise line industry
• Leadership and management skills
• Experience in managing people
• Experience in business administration
• Experience in handling relevant software.