Eight years ago, the rapid growth in expedition cruising was questioned in my blog “Expedition Cruising: Goldmine or Bubble?”—a skepticism that now seems well-founded, as many operators struggle to fill ships and hit high “per diems” (revenue per guest per day targets). Today, a similar scenario appears to be unfolding in the ultra-luxury hotel-branded yacht cruise market, with the Ritz-Carlton Yacht Collection reporting low occupancy levels and financial challenges. With prestigious names like The Ritz-Carlton, Four Seasons, Aman, and Orient Express launching intricately designed, high-cost vessels, the industry is under the spotlight. But is this a “bubble” in the making, or are the current issues with Ritz-Carlton company-specific?
The Attraction of the Ultra-Luxury Yacht: Why Hotels Are Taking to the Seas
The U.S. Hotels, Resorts, and Cruise Lines Market is projected for strong growth, with an estimated value of $345.96 billion in 2024, expected to reach $513.45 billion by 2030. This expansion is driven by evolving traveler expectations for unique, immersive experiences.
Industry executives see hotel brands entering the cruise sector as “the best thing that has happened in years,” primarily because of the potential to introduce an entirely new target group to cruising. By leveraging powerful loyalty programs, such as Marriott Bonvoy for Ritz-Carlton, these brands can expose millions of hotel guests to luxury voyages, expanding the market beyond traditional cruise demographics. Hotel brands bring established brand equity, extensive loyalty programs, and operational expertise in guest experiences, allowing them to tap into a growing, affluent segment.
The Capacity Boom: A Sharp Increase in Ultra-Luxury Berths
The ultra-luxury hotel-branded yacht cruise market is experiencing rapid capacity growth. The Ritz-Carlton Yacht Collection has scaled quickly from its first vessel, Evrima (298 guests, 2022), to Ilma (448 guests, 2024) and Luminara (452 guests, 2025).
Four Seasons Yachts plans to launch Four Seasons I (222 passengers, 2026) and Four Seasons II (222 passengers, 2027). Aman at Sea will launch Amangati (around 100 passengers, 2027), likely with more ships to follow. Orient Express Yachts introduced the stylish Orient Express Silenseas (120 passengers, 2026) and plans a second yacht in 2027. Finally, on a smaller scale, Waldorf Astoria will debut an intimate Nile River sailing (29 suites, 2026).
The Ritz-Carlton Case Study: An Unexpected Surprise?
After the largely positive narrative around hotel brands entering the cruise space, the recent financial performance of the Ritz-Carlton Yacht Collection serves as a cautionary tale. The group reported an operating loss of $71.9 million in 2024, up from $31.9 million in 2023. Total comprehensive losses reached $176.2 million, with accumulated losses of $129.1 million by December 2024—reflecting a significant cash burn, estimated at $630 million in 2024 alone.
A key factor was achieving only 50% occupancy, far below the projected 85–90%. This gap points to operational miscalculations, suggesting company-specific challenges in driving bookings or pricing strategy. The company requires an additional $440 million in funding, with $312 million needed by June 2025. While positive EBITDA is projected from 2026, management has pushed break-even targets out to 2028–2029.
The “Per Diem” Challenge and Pricing Strategies
The financial feasibility of ultra-luxury hotel-branded yacht cruises depends on charging record “per diems” while managing exceptionally high operational costs. Pricing models vary: Ritz-Carlton and Orient Express adopt an all-inclusive model, whereas Four Seasons Yachts—despite premium per-suite rates up to $45,000 per night—excludes lunch, dinner, cocktails, wine, and excursions from its base price. Operating a superyacht is expensive, and profitability relies on achieving both high occupancy and high pricing; any shortfall can result in substantial losses.
Echoes of Expedition Cruising: Is History Repeating Itself?
The expedition cruise market, which nearly tripled in size in a short period, serves as an instructive comparison. This rapid expansion led to “too much inventory” and “crazy discounts” as supply outpaced demand, forcing an adjustment phase in 2024.
Both ultra-luxury hotel-branded yachts and expedition cruising are high-cost, niche segments sensitive to rapid capacity changes. The oversupply and discounting seen in expedition cruising could foreshadow similar challenges for hotel-branded yachts. For ultra-luxury brands, potential discounting poses a risk of brand dilution, eroding premium positioning and exclusivity.
Another “Bubble” in the Making?
The overall luxury cruise market is projected to grow at a CAGR of 8.2% from 2024 to 2037. Considering this healthy growth, the term “bubble” may be too negative. However, a “mini bubble” or localized oversupply is certainly possible. Rapid entry of new capacity from multiple players creates intense competition for a relatively small, ultra-affluent target market, particularly in the short term.
The challenge lies in balancing the “luxury experience” with perceived value. While luxury travelers seek unique experiences, concerns about overpriced offerings and lack of personalization remain. New entrants must ensure that exceptionally high per diems deliver genuine value, not just high costs; otherwise, occupancy will suffer.
The ultra-luxury hotel-branded yacht market is an intriguing frontier for hospitality. As we have seen with expedition cruising, rapid expansion in a niche, high-cost segment demands careful planning, realistic demand assessment, and a firm commitment to delivering the brand promise. The coming years will reveal whether these floating palaces can achieve commercial success—or if they too will face a period of market adjustment.
Please note: This article contains the sole views and opinions of Hans Lagerweij and does not reflect the views or opinions of Guidepoint Global, LLC (“Guidepoint”). Guidepoint is not a registered investment adviser and cannot transact business as an investment adviser or give investment advice. The information provided in this article is not intended to constitute investment advice, nor is it intended as an offer or solicitation of an offer or a recommendation to buy, hold or sell any security. Any use of this article without the express written consent of Guidepoint and Hans Lagerweij is prohibited.
About Hans
Hans Lagerweij, originally from the Netherlands, holds an MBA from Erasmus University Rotterdam and an MA in Brand Management. His early career foundation was built in brand activation, development, and sales roles within the packaged consumer goods industry. He then transitioned to the travel and tourism sector, where he has a proven track record of leading, turning-around and growing businesses. His experience includes CEO and President roles at Quark Expeditions and Victory Cruise Lines as well as leading international businesses for Albatros Travel and serving as a Senior Vice President at Four Seasons. Hans now leads Flying Dutchman Consultancy, focusing on growth strategies. He is also a trustee of the Safer Tourism Foundation and a board advisor for several startups. His first book “The Why Whisperer, how to motivate and align teams that get your strategy done”” was released in May 2025. Opinions mentioned in this article are solely his.