Entertainment, Financial Model, Hospitality, Tourism & Attractions, Transport

10-year Financial Projections, 5-year Financial Projections, Accounting, Amortization, Budgeting, Business Valuation, Cap Table, Cash Flow Analysis, Cash Flow Projections, Cash on Cash Yield, Cash-on-Cash Multiple, CFO, Controlling, Cost Calculation, Cost Projections, DCF Model, Debt Amortization, Debt Schedule, Debt Service Coverage, Discount Rate, Excel, Financial Analysis, Financial Feasibility, Financial Model, Financial Modeling, Financial Planning, Financial Projections, Financial Statements, Forecast, Forecasting, Income Statement, Investment Multiple, Investor Cash Flows, Investor Presentations, Investors, IRR (Internal Rate of Return), Know-How, NPV (Net Present Value), Pricing, Private Equity, Private Equity Waterfall Distribution Models, Pro-Forma, Profitability Analysis, Return on Invested Capital (ROIC), Return on Investment (ROI), Revenue Projections, Scenario Analysis, Sensitivity Analysis, Sponsors, Startup Financial Models, Terminal Value, Three Statement Model | Three Financial Statements, Uses and Sources of Funds, Venture Capital

Video Overview:

Starting a cruise ship is heavy on the initial investment requirements. These things are enormous.

The cost of building a large cruise ship can vary widely depending on many factors, such as the size, amenities, and materials used. However, according to industry sources, the average cost to build a large cruise ship can range from around $500 million to over $1 billion.

For example, the construction cost of Royal Caribbean’s Symphony of the Seas, the largest cruise ship in the world as of 2021, was estimated to be around $1.35 billion. This ship measures 1,188 feet long, has a gross tonnage of 228,081, and can accommodate up to 6,680 passengers.

Other factors that can influence the cost of building a cruise ship include labor costs, technology and innovation, and regulatory compliance requirements. Additionally, the ongoing maintenance and operational costs of a large cruise ship can also be significant.

This financial model has logic to define a construction period (determine if each line item is financed or not and %), the costs per month (or the cost of acquisition of a ship being purchased that is already built), granular ticket revenue and onboard purchase assumptions that can be varied by month for 120 months, and detailed expense schedules for staff, outsourced labor, fuel, food, and margins on things like art auctions, spa, casino, land excursions, and more.

The main output reports display monthly and annual detailed cash flow forecasting that shows all the calculations to get to gross profit, EBITDA, debt service, and cash flow. I also connected a monthly and annual Income Statement, Balance Sheet, and Cash Flow Statement. Overall the model hits all basis that a premier financial model needs to have to produce usable financial forecasting reports and test the feasibilities of various key assumptions (ticket pricing, costs, seasonality, passenger counts, labor, fuel, and more).

I added an optional cash flow waterfall that uses basis IRR hurdles to show how a joint venture may want to be structured with two parties (operator / investor) and the resulting contributions / distributions as the investor achieves various IRR hurdles. There is also a more generic structure that shows a fixed percentage profit share and contribution rate with no hurdles. Monthly and annual views were built for each of these cash flow waterfalls as well as the final IRR, NPV, and resulting DCF Analysis.

I added visualizations primarily focused on revenue, operating profit, cash flow, and overall balance of Assets, Liabilities, and Owner’s Equity over time.