As we posted yesterday, Operational “Core” expenses are those that do not change very much and can be scaled and accounted for.
Operational “External” expenses
Next, we have Operational “External” expenses that vary depending on external factors that are out of or only partially within our control. These include docking and port fees, fuel, and certain additional repairs or parts that may be needed but cannot be handled by the ship’s crew. Some of these categories may technically overlap with other expense areas, but are dependent on additional variables and circumstances beyond Fabled Voyages.
Ensuring that we have properly budgeted for these expenses and/or have contingencies in place to help hedge against additional or changing costs around the world, and is why we have categorized these expenses separately. Variables such as war, local economies, and unexpected world events can dramatically change what would otherwise be considered a “normal” price.
To help explain these expenses better, let’s take docking and port fees as an example. Depending on whether we are anchoring in a safe harbor and tendering or ferrying residents into port, the costs may be dramatically less expensive than docking directly for several days. This can potentially eliminate or minimize direct portage and piloting fees. Additional costs and factors such as waste disposal, water, and power at port can also lead to major differences in expenses. Additionally, while there are fixed port costs, many ports also have taxes or fees associated with a ship’s headcount. A prime example of this would be Mexico’s non-resident duty fee, which is increasing annually. Currently, this fee is $10 per person and is scheduled to increase to $15 per person in 2028.
While we want to ensure that we are good stewards of the world and our oceans, there are many additional considerations when it comes to waste and water management. There are also substantial differences between having services provided directly at the dock versus having them transported or handled elsewhere. Additionally, major cities and ports such as New York City or Barcelona are going to have significantly higher fees than ports such as Lisbon or Jakarta. Where we are in the world can make a substantial difference in what it costs to operate the ship.
Another major factor is fuel. We have seen fuel prices increase by 50–100% at times this year, with prices remaining close to 100% higher for much of the year compared to when initial budgeting began. This is a major cost consideration when fuel can scale up to represent an additional 20% of your budget after previously being relatively stable around 25%. That on top of us having to account for fuel delivery, as well as the delivery of goods and services needed to support the ship. These costs can fluctuate significantly depending on our location, availability, and the local market conditions.
Resident Specific Expenses
Finally, we get to Resident Specific Expenses. This portion of the Monthly Maintenance Fees is based upon several variables that are directly tied to resident headcount.
To help clarify why things like fuel are not technically tied to Resident Specific headcounts, consider that adding an extra shower or having an additional light on is not necessarily a major cost factor when it comes to moving and powering the ship. Cabins and Common Spaces must all be maintained at relatively consistent temperatures, whether occupied or not, and whether occupied by one person or several, and water will be heated regardless of how many people are on board.
Costs that are Resident Specific encompass items such as port fees calculated by headcount, additional crew members needed for resident services rather than ship operations, food, and other similar expenses. Service employees covering areas such as laundry, housekeeping, janitorial services, kitchen staff, and so on are factored in using variables and headcount rates, so are Resident Specific. Some can be based on simple calculations, such as how many rooms a housekeeper can clean per day, how many loads of laundry an attendant can manage, or how many hours a cook can operate a pizza oven or a barista can staff a coffee bar to help determine the necessary staffing levels and their associated costs. Just like any other business, these calculations allow us to determine the appropriate staffing requirements based on workload, pay rates, and the number of residents being served.
Setting budgets for resident and employee food expenses can be based on industry standards and generalized cost factors, allowing for a relatively balanced approach to how much is spent on food. By finding that middle ground, we can account for larger and smaller appetites, as well as those who may focus more heavily on one meal than another.
The region we are visiting will also dictate food availability, selection, and cost. For example, in areas where beef consumption is lower and fish is more readily available at a lower cost, our general menus may lean more heavily toward those options. Obviously, our stocks and inventories will also vary depending on where we are in the world. For example, having American hot dogs stocked in large quantities for the entire three-plus months we might spend in the Asia-Pacific region is probably not necessarily the most cost-effective use of funds or storage space. The same could be said for Europe, where there are so many other options available. As a world cruise, we should hopefully be eating the world’s cuisines along with seeing its sights!
These Residential Specific Expenses are variable fees that must be accounted for in our pricing based on the number of people onboard. They are calculated by headcount, and these Resident Specific Expenses are deducted at a standard rate from your residence when it is not occupied, and is deducted at a standard rate in the Monthly Maintenance Fees associated with purchasing an additional residence.
Hopefully, this two-part series has provided you with some additional insight into how we plan on utilizing Monthly Maintenance Fees. Our goal is to provide a product whose ongoing costs have been thoughtfully analyzed, budgeted, and planned for, helping to support the long-term financial success and solvency of our Residential Cruise Ship.
As we continue developing Fabled Voyages, transparency and understanding remain important parts of our journey. We believe that understanding where the money goes and why these expenses exist is just as important as the journey itself.