My theories - costs to run a P&O ship

[fishart]

Hi Folks, in follow up on my personal interest about behind the scenes and costs of running a P&O ship such as the Sun... I have thus gathered the following theory...could be wayout wrong, so I challenged other interested CCers as to their theories...

My Theories:

Lets say on average there are 1500 paying adults, again on average they $700 each for a 7-8 night cruise... that equates to just over $1 million per trip..

Naturally will be more $$ allowing for extra people/kids and price variations according to cabins...but I think this is a good round figure to work on...

It's approx 1062 nautical miles to Noumea from Sydney - lets say 1400nm including the jaunt around the islands - so all up 2800nm return trip to Sydney...

They claim the ship does 21knots - but that would not be cruising speed, so my guess...lets aim at about 17-18knts cruising, maybe as low as 15 - but at best conditions I'd say 17knts...

Looking at my itinerary - it takes about 65 hours to sail from Sydney to Isle of Pines so at 17knts the Sun would travel just over 1100nm - so that timeslot fits in nicely with the speed..

(For those whom may not know – if a boat travels one knot an hour that equates to travelling one nautical mile)

Now, according to the stats I found on the engines (which by the way I am led to believe are 2 x Sulzer 7RLB66 engines -single run). Now this is where I have had some issues trying to ascertain the fuel consumption – but from about 3 hours of research on the Sulzer engines, I have a rough estimate that the fuel consumption is approx 650 litres per hour..

Hmm, fuel costs – lets say .90c per litre for diesel as I’d say they would get a fuel subsidy – for the 130hr journey - approx $76,000 plus the fuel costs to run the 24/7 gensets (generators) – so lets say $85,000 for fuel…

How am I going so far?

Well, at present I have blown a fuse trying just to work that little bit out…does anyone have any suggestions in regards to

Salaries for the 670 staff and how about food costs? Anything else??

I am kind-of thinking that the costs could amount to about $300K to $400K per trip…

Your thoughts??

Cheers!

Iesha

[Star-Man]

Anything else??

 

Plainly, yes.

 

They are paying for use of the berth at Sydney. If its anything like Portside wharf, they would be paying the base cost for 200m and then an extra charge for each metre over that.

 

These costs would be similar for every port the ship docks at.

 

Then there is the costs of employing the port personnel. Security guards, those helpful people that tell you where to go when you are lost, the people at the check in desks etc etc.

 

Dont forget about the bunkering costs as well. The diesel may cost a certain amount, but they still have to pay for the barge/bunkering vessel to get it there. Also there are charges for water, waste disposal and a few other things as well that happen port side.

 

Then there would be the costs of the tugs, pilot (i think) and customs officers.

 

Its a costly business, thats for sure

[cheznandy]

Geez, good for you working out all that, I am flat out trying to work out how many cocktails I can afford on a 10 night cruise:p but I reckon their insurance premiums would be pretty high:eek:

 

Chez

xx

[arxcards]

This is big business stuff, that I would struggle to get my head around. P&O Australia is part of Carnival Corporation, which is a publically listed company that is obliged to return profit to their shareholders each year. I won't get into specifics, as I hate being serious in a relaxation area. More considerable expense areas are:

 

Purchase and maintenance of the ship - Plant & equipment is usually more of an expense to an organisation than wages. The ongoing costs of the finance & maintenance of a floating city are huge.

 

Employees that do not work onboard - Head office (Peter Radcliffe was on $2mill year), media & advertising, legal, sales, customer services, HR, accountancy, web services.

 

Taxation, insurance, compliance (eg, Occupational Health & safety), advertising, travel agents commission.

 

Have no idea on litres of fuel. Pacific Sun uses around 63.5 tonnes of fuel per day on a typical 10 night cruise.

 

I would rather think of the relaxing side of this. How nice is the steak, how cold is my bourbon & Coke, how big is the smile on the waiter, how big is the trunk on the towel elephant, etc.

 

Thanks for your insights, though I am taking a cruise to get away from these right brain activities.

 

Cheers

Geoff

[Carlz]

how about how much they pay for lisa currypuff kenny!?!:rolleyes:

[cheznandy]

how about how much they pay for lisa currypuff kenny!?!:rolleyes:

 

he he probably not much:)

 

Chez

xx

[sailawaysally]

Do we have to think about costs etc! NO, I don't want to be considering all that, it's bad enough trying to work out how much money to take with us!!

[MsMinx]

WOW Fishart! You've put a LOT of research into this!!!

 

My 2c worth would be the cost of all the food and drinks they have to buy in for each cruise.

 

Do they own the ship outright? I'm sure there's some sort of monthy installment if not???

 

And don't forget the never ending supply of white paint that seems to get slapped on the rust spots on each ship at each port ;)

[Whoey]

I am sure they measure their profitability of each cruise by accurately working out all the costs. Where possible they would allocate costs which are obvious like cost of food / drinks / fuel / port charges / entertainers - to each specific cruise.

 

I reckon they would spread a flat cost of all staff (office and onboard) across 12 months as an indirect cost, this would be easier to manage. They would probably have some flat daily cost for all onboard wages for a standard Pacific Sun cruise, for example if a 10 night cruise costs about $150,000 in wages (silly guess ok) then it would be $15,000 a day.

 

The maintenaince of the ships costs like paint, drydock etc would also have to spread across a years worth of cruises.

 

All of these huge costs are probably the reason we RARELY see super cheap cruises, especially anything over 8 - 10 days... they HAVE to cover their costs at least and make SOME profits to cover the indirect costs.

 

I am sure i heard somewhere your cruise cost covers their base costs only, i.e. the $1million roughly covers the total ship costs as expected (Short of breakdowns unforseen issues like storms etc) and they make profit on the drinks / shore tours / photograpy etc.. every onboard dollar you spend is pure profit for them as your cruise cost has already paid for all the costs, employee costs is just another part of that.

 

Take a $100 visit to the Lotus Spa for a 1 hour massage, that staff member is already getting paid their salary and they would probably get $20 for each massage they do on top of a low base wage, hence the pacific daily specials you get through cruises which would boost the total number of massages for the cruise and effectively means P&O wouldn't need to lose out on this persons base wage.

 

I reckon the bar staff, waiters, photography staff are all covered in a base wage only and only speciailist services like massage these people might make a little more. People in the duty free shops would make % on total sales etc...

 

If you go on a cruise and take very little spending money, dont do tours, dont pamper yourself - I reckon P&O would not make much profit from you. However if you enjoyed yourself, the word of mouth business you might generate for them and your potential repeat business where you may spend more - that is priceless!!!

 

just my opinion... :) sorry for the essay... lol

[Ephraim]

• Food costs are generally in the range of USD$10 to USD$15 per person on the mass market lines, depending on many factors.
  
• Capital costs are also something to think about considering that the ships are essentially mortgaged as property.
  
• Insurance costs - Insurance on lawsuits, ships, property.
  
• Port costs - Berthing, stevedores, pilot, etc.
  
• Amenities - Toilet paper, soap, shampoo, cleaning supplies, robes, etc
  
• Maintenance - Nuts, bolts, vacuums, paint, air conditioning, etc
  
• Salaries - While those at the bottom of the scale are paid approximately $50 to $100 a month (plus tips), you have higher salaries for those who do not receive tips
  
• Commissions on sales, refunds, obc, etc.

[Ephraim]

I am sure they measure their profitability of each cruise by accurately working out all the costs. Where possible they would allocate costs which are obvious like cost of food / drinks / fuel / port charges / entertainers - to each specific cruise.

 

I reckon they would spread a flat cost of all staff (office and onboard) across 12 months as an indirect cost, this would be easier to manage. They would probably have some flat daily cost for all onboard wages for a standard Pacific Sun cruise, for example if a 10 night cruise costs about $150,000 in wages (silly guess ok) then it would be $15,000 a day.

 

The maintenaince of the ships costs like paint, drydock etc would also have to spread across a years worth of cruises.

 

All of these huge costs are probably the reason we RARELY see super cheap cruises, especially anything over 8 - 10 days... they HAVE to cover their costs at least and make SOME profits to cover the indirect costs.

 

I am sure i heard somewhere your cruise cost covers their base costs only, i.e. the $1million roughly covers the total ship costs as expected (Short of breakdowns unforseen issues like storms etc) and they make profit on the drinks / shore tours / photograpy etc.. every onboard dollar you spend is pure profit for them as your cruise cost has already paid for all the costs, employee costs is just another part of that.

 

Take a $100 visit to the Lotus Spa for a 1 hour massage, that staff member is already getting paid their salary and they would probably get $20 for each massage they do on top of a low base wage, hence the pacific daily specials you get through cruises which would boost the total number of massages for the cruise and effectively means P&O wouldn't need to lose out on this persons base wage.

 

I reckon the bar staff, waiters, photography staff are all covered in a base wage only and only speciailist services like massage these people might make a little more. People in the duty free shops would make % on total sales etc...

 

If you go on a cruise and take very little spending money, dont do tours, dont pamper yourself - I reckon P&O would not make much profit from you. However if you enjoyed yourself, the word of mouth business you might generate for them and your potential repeat business where you may spend more - that is priceless!!!

 

just my opinion... :) sorry for the essay... lol

 

Just to correct this, the Lotus Spa is not run or owned by the cruise line. On almost every ship, except the Cunard QMII the spa is a concession of Steiner of London. If I remember correctly the ship's hospital and photo departments are also concessions. One some cruise lines the catering department is also a concession (essentially they pay a catering company to serve food). None of these employees are paid anything by the cruise line at all.

 

I do imagine that since these are concessions that the cruise line pays the Steiner for hospital services rendered to the staff.

 

The waiters and bartenders generally earn a base wage, minus a charge for breakage (even if there isn't breakage) that is usually in the range of $50 to $100 a week. I would imagine that the store staff are paid a set wage with an extra small commission.

[fishart]

Hi Folks,

Thanks to those concerned that offered the constructive input.

 

I just want to make the point that my intent with this thread was purley a lighthearted fact finding mission - as a boatie myself I find the immesity of such an operation very interesting. I cant image who wouldnt when it comes to these big beautiful ships?

 

When aboard next month - I am keen as mustard to see if I can get a squiz of the engine room - (hope they let me) - I ve read the engines are about 4 stories high... pretty cool!!

 

Okay, well as I was typing just now the Aust Post courier has just delievered our tickets!! Yaayyy!! Gunna make a coffee and have a peruse of the P&O blue folder ...

 

Cheers and thanks again to all who have taken interest...

Iesha

[Kiwi Kruzer]

Do they own the ship outright? I'm sure there's some sort of monthy installment if not???

 

[*]Capital costs are also something to think about considering that the ships are essentially mortgaged as property.

 

I remember reading somewhere that the ships are owned by Investment Companies,Building Societies,Retirement Funds etc, and the shipping companies just lease,run and maintain them.

[Pirate King]

Take a $100 visit to the Lotus Spa for a 1 hour massage, that staff member is already getting paid their salary and they would probably get $20 for each massage they do on top of a low base wage, hence the pacific daily specials you get through cruises which would boost the total number of massages for the cruise and effectively means P&O wouldn't need to lose out on this persons base wage.

 

 

Only thing is the company running the Spa is a concession (Steiner of London) so P&O neither pay their staff or make much of the profit......

[Pirate King]

Hi Folks,

Thanks to those concerned that offered the constructive input.

 

I just want to make the point that my intent with this thread was purley a lighthearted fact finding mission - as a boatie myself I find the immesity of such an operation very interesting. I cant image who wouldnt when it comes to these big beautiful ships?

 

When aboard next month - I am keen as mustard to see if I can get a squiz of the engine room - (hope they let me) - I ve read the engines are about 4 stories high... pretty cool!!

 

Okay, well as I was typing just now the Aust Post courier has just delievered our tickets!! Yaayyy!! Gunna make a coffee and have a peruse of the P&O blue folder ...

 

Cheers and thanks again to all who have taken interest...

Iesha

 

 

Sorry, but for liability reasons you will get nowhere near the engine rooms. Just not worth the risk for any cruise company to let a guest near the technical spaces. God bless the litigant society for that one.....

[MsMinx]

When aboard next month - I am keen as mustard to see if I can get a squiz of the engine room - (hope they let me) - I ve read the engines are about 4 stories high... pretty cool!!

 

I wish you the best of luck with this. Hate to be a nay-sayer but I think you've 2 chances of it : Buckley's and none. Too many risks of not only liability but terrorism. I know that sounds a bit full on, but sadly it's a risk they just can't take anymore :(

 

It's hard enough just to get to see the bridge as you have to be invited. We were rejected on our first cruise as it was only days after Sept 11 and everyone was still too scared!

 

If you want to do a bridge tour I suggest going straight to the Purser's desk when you get onbaord and asking to be put on the bridge tour list. The sooner you do it the better, so you don't miss out, but don't be too disappointed if they don't invite you. It's nothing personal ;)

 

I agree that it would be AWESOME to see the engine room tough!

 

AND YAY for getting your blue folder :D:D

[Riffraff]

I'm lucky enough to have been in a couple of engine rooms - on container ships. Imagine you've been shrunk to about an inch tall, and walking around in your car's engine - that's pretty much what it's like - and loud, and hot.

I'd love to see the engine room on the cruise ships as well, but will have to make do with a trip to the bridge, hopefully.

 

In regards to the costs of running the ship, I had a look at the port corporations sites - Sydney port has a charge for the harbour pilot and navigation within the harbour of 48 cents per gross ton..so with Pacific Sun being about 47,400 tonnes that's $22,752 every time they come in the harbour - and the same again when they leave. (But there is a 35% discount for less than 29 visits per year, which makes it $14,788.)

Then there is the cost of tugs, etc etc..

On top of that is the port charge, the same for Circular Quay or Darling Harbour, of $275 per hour.

So it is cheaper to park a car in Sydney - but only just:D !

[karmac]

...On top of that is the port charge, the same for Circular Quay or Darling Harbour, of $275 per hour.

So it is cheaper to park a car in Sydney - but only just:D !

 

Well, there you go. I thought that the reason they use Darling Harbour as opposed to Circular Quay was because of cost. Thought OPT would be much more expensive than DH.

 

Not long for you mow Martin. Hope you & Kym have a wonderful cruise.

 

Karen

[Riffraff]

Thanks Karen! Yep, not long now...getting very excited!:D