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Starr Davis packed up her life in Florida to live full-time on a cruise ship. The journey was a longtime dream for the 58-year-old – who told USA TODAY in 2024 that she wanted “to see the world” – but it abruptly came to an end last month. Residential cruise company Villa Vie Residences gave passengers hours to disembark after it ceased operations about two years into its inaugural journey – but it isn’t the only residential cruise concept to falter or struggle to get off the ground.
The company said in a late October news release that the high cost of fuel made operations unsustainable. Passengers told USA TODAY the company appeared to struggle in the months before it shut down, recounting “cash calls” to residents for additional funds to keep sailing, dwindling food options and more time in port.
Villa Vie isn’t alone. Multiple other companies have proposed homes at sea that still haven’t come to fruition.
Larry Pimentel, cruise executive-in-residence at Florida International University’s Chaplin School of Hospitality & Tourism Management, told me that “residential cruising offers a genuinely appealing lifestyle, but selling the dream and sustaining the economics are two very different things.” Here’s why.
What Are the Challenges of the Residential Cruise Model?
While Villa Vie halted its intended 3 and ½ year voyage prematurely, some other similar cruise concepts never hit the water. A three-year cruise from Life at Sea Cruises, scheduled to depart in 2023 and visit nearly 400 ports, was canceled about eight months after it was announced, citing challenges due to investor withdrawal. One passenger told USA TODAY at the time that he and his wife were alerted to the cancellation after they’d already arrived in Istanbul, Turkey, to embark.
Mike Petterson, founder of Villa Vie Residences, worked on that sailing as well but left the company months before the cancellation, The New York Times reported.
Another company, Victoria Cruises Line, planned to launch a residential cruise in 2023, but an October 2026 blog post on its website said it “will not commence operations until at least 80% of our cabin capacity has been secured through qualifying bookings.”
Viktoria Takacs-Ollram, the company’s owner, told USA TODAY that economic and political developments around the world had impacted booking levels, forcing it to delay departure. Victoria Cruises Line intends to charter its vessel and offer extended rentals rather than selling cabins or long-term occupancy rights.
“We recognize that repeated changes to planned departure dates have been disappointing for those who reserved cabins in anticipation of beginning their new lives at sea,” she said in an email. “However, we firmly believe that the long-term interests of our residents and the financial stability of the operation must take precedence over meeting a departure date that is not economically justified.”
Pimentel sees squaring the promise of a residence with the cost of operating and maintaining a ship as the “fundamental challenge” of residential cruising.
“In my view, a credible model must fund not just acquisition and launch, but crew, fuel, insurance, ports, regulatory compliance, maintenance, major repairs and eventual vessel replacement,” Pimentel, former president and CEO of Azamara and Cunard Line, among others, as well as cofounder of SeaDream Yacht Club, told me in an email. “An attractive purchase price or monthly fee means little unless the underlying economics can support those obligations through difficult years, not just favorable ones.”
Operators must have enough capital to set sail and recurring revenue to keep them going. “I would be particularly concerned about any model that needs a continuing flow of new buyers to cover existing residents’ ongoing costs,” he said.
Walt Nadolny, professor emeritus of marine transportation and global business at the State University of New York Maritime College, and a former environmental officer for Carnival Cruise Line and Norwegian Cruise Line, said there are numerous expenses passengers may not even be aware of, from trash disposal to fees to have pilots guide a vessel into and out of a port. The latter alone can cost around $5,800 each way for a small cruise ship in a major port like New York.
“That working capital from the start will go rather quickly in a small operation with very limited opportunities for additional income,” he said in an email.
External factors like oil prices can also change and disruptions may arise. Villa Vie pointed to the war with Iran in its announcement, noting it had worked to reduce fuel usage since the conflict started in February. Pimentel said he would “judge any residential model by its ability to withstand cost increases, slower sales and unexpected repairs, rather than its ability to operate when everything goes according to plan.”
The Odyssey was impounded after arriving in Singapore on Nov. 8 with only crew members on board, according to its Maritime and Port Authority. Villa Vie did not respond to USA TODAY’s request for comment.
Does the Age of the Ship Matter?
The Odyssey began its initial 3½-year cruise – with the goal of circumnavigating the globe every 3½ years – in October 2024, following multiple delays. The voyage was originally set to start in May of that year.
Petterson told USA TODAY in August 2024 that the company had “been quite humbled by the scale of what it takes to reactivate a 30-year-old vessel from a four-year layup. After the lapse of all certifications of class, we are now considered (a) new ship where all machinery and equipment must work as if new.”
The Odyssey previously sailed as MS Braemar for Fred Olsen Cruise Lines before Villa Vie bought the ship in 2023.
Purchasing an existing ship has potential upsides, such as a lower entry cost and quicker path to becoming operational, according to Pimentel.
“But a refurbishment does not reset a ship’s age,” he said. “I would look beyond new furnishings to the machinery, maintenance history, remaining economic life and reserves for unexpected repairs.”
Nadolny said cruise ships between 20 and 30 years old can cost less than $100 million, and as little as $20 to $30 million in some cases (though the process of refreshing them can be pricey).
Building a ship, meanwhile, provides the freedom to design it with residents in mind (and long-term living may call for different features than guests on vacation would need). “The trade-off is a much larger financing and delivery challenge, requiring committed capital, experienced leadership and meaningful buyer protections,” Pimentel said.
Newbuilds typically cost “well in excess” of $100 million, per Nadolny. Construction often takes between two and three years, and the design process can start many years earlier.
Storylines planned to launch a custom-designed residential cruise ship called the MV Narrative as early as 2019, according to Business Insider. That was delayed, and as of 2023 the company planned to set sail in late 2026, the outlet reported.
Storylines did not immediately share a comment on the status of the ship’s launch.
What Passengers Should Look for in a Residential Cruise
Pimentel urged buyers considering a residential cruise to ask questions about everything from how much cash is set aside for operating shortfalls, emergencies and major capital work, to how the ownership agreements are structured and what happens to residents’ money and housing if the ship stops operating.
“I would want independent legal and financial advice on the actual contracts, not reassurance based on marketing materials,” he added. “I would also keep a separate contingency fund for accommodation and travel ashore.”
Nadolny recommended back-to-back cruises with a “reputable line” as an alternative to residential vessels. Passengers can ship hop, from short cruises out of Florida to transatlantic and European sailings, racking up loyalty rewards along the way.
“I mean, all of us drank the Kool-Aid enough to want to keep it going,” Davis, the Villa Vie resident, told USA TODAY after the suspension. “There was hope for an investor to come on board and take over and save us. But literally, it was just, do you want to shut the lights out now, or do you want to make a donation to keep going?”
Still, she was grateful for the travel experiences the ship provided. She visited over 60 countries in roughly two years.
However, at least one vessel has managed to sustain the life-at-sea model.
The World, which sails with an average of 150 to 200 residents and guests and is privately owned by residents, has been sailing since 2002, according to its website.
“My conclusion is not that residential cruising cannot work,” Pimentel said. “It is that the financial and personal stakes are high: when the ship is your home, an operational failure is much more than a disrupted vacation.”
Nathan Diller is a consumer travel reporter for USA TODAY based in Nashville. You can reach him at [email protected].
Reporting by Nathan Diller, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect
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