Sunday, January 01, 2006

Happy New Year! Las Vegas Cruise Ship Style

Jan. 01, 2006
Welcome aboard, it's home
Las Vegas-based Orphalese Global Strategies dives into residence-at-sea business, plans cruise ship By NICK HALEY - REAL ESTATE WRITER
Don Allen found the best place to launch his new residential cruise ship company was in the Mojave Desert.
In addition to its more than 40 million visitors per year, Las Vegas hosts the largest proportion of second-home condominium owners in the nation -- the type of buyer who may be looking for the Next Biggest Thing in vacation homes: a condominium-like cabin aboard a self-contained luxury ocean liner that cruises continuously to interesting places and activities.
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Although 240 miles by air from the nearest berth, the city also carries the international appeal that the Los Angeles-based Allen, chief executive officer of Orphalese Global Strategies, hopes will lead potential globe-trotters to his company's sales office, which is at a temporary location in the corporate offices of Avalar Real Estate, adjacent to Southern Highlands Hospital on Medical Center Street.
"Everyone wants a reason to come to Vegas," Allen said. "We could have opened it anywhere, so we put it where we knew people wanted to go anyway."
With the amenities and shopping of a world-class resort, gaming, permanent residences and cabins for rent -- not to mention an ambitious but untried business plan -- the 90,000-ton ocean liner that the new Nevada corporation plans to build (at a shipyard in Finland) fits the profile of many businesses that line the Strip. Only this one would take guests to events near the real Paris, Venice and Mandalay.
At a recent reception inside the Stirling Club at the Turnberry Place high-rise condominium complex, Allen and his executive team detailed the jet-setting lifestyle available to "residents" and guests aboard the proposed ship, the Orphalese, to an invitation-only audience.
The crux of the ship's lifestyle, as well as its main selling point, is its itinerary. Passengers, Allen said, can enjoy attending marquee events around the world such as the Cannes Film Festival, Irish Derby, Super Bowl, Daytona 500 or Dubai Gold Cup, without having to pack and re-pack or figure out their own travel plans. Heading to renowned events -- they plan to visit about two per week -- is the ship's raison d'etre.
Allen said the idea for the Orphalese came to him about five years ago, but was built upon years of reflection. Having taken many Caribbean cruises, he realized the enjoyment more often lay in the activities than the destinations.
"I love salsa dancing. I've gone on cruises where we did salsa dancing in every port and I can tell you: A palm tree in Bermuda looks just like a palm tree in Barbados," Allen said. "The Orphalese won't have the same port or the same activity. It's event-driven. We look at it this way: Where in the world is the most interesting place to be at the moment. We'll be in Cannes for the film festival. We'll be in Pamplona for the Running of the Bulls. We'll be in Rome for the opera, or in Japan for the Cherry Blossom Festival."
The main novelty, of course, are the "residences." Clients may one of 200 residential units, which feature separate amenities and access from the 265 traditional cabins. Floor plans range from 1,000 square feet with two bedrooms and 2 1/2 baths to a four-bedroom, 4 1/2-bath model measuring 3,900 square feet.
While not actually real estate -- units are considered personal property -- the ship's cabins are sold with the trappings of condominiums since potential customers best understand them in such terms. Allen contracted Las Vegas fine-homes realty agent Shirley Bailey to assemble a team to conduct sales through new realty office Avalar of the Seas.
As designed, the ship provides the amenities one would expect of a high-rise residential complex along the Strip, with a few extras. A private swimming pool, day spa, fitness facility and business center are planned for residents. The design also provides a practice green for golfers, an area for personal water craft, restaurants, two nightclubs, a movie theater, a performing arts theater and a casino. Most important, Allen emphasized, is a satellite connection.
"They're never cut off from the world," he said. "We're (going to be) in port most of the time anyway, but even at sea, with a satellite link there is 24-hour cell service with the same phone number, no matter where in the world they are.
"For people who work from home, this is no different from a house."
The Orphalese is not without a predecessor. Four years ago, Norwegian businessman Knut Kloster launched The World of ResidenSea, the first to offer cabins for sale aboard a cruise ship. While still operating, The World, whose captain resides in Henderson, encountered financial difficulties and requires residents to pay astronomical maintenance fees, more than $40,000 per month in some cases. From the outset, it was designed for the uber-rich.
Allen said the Orphalese has a different business plan and draws revenue from multiple sources, allowing it to charge residents considerably less. For the smallest unit, which costs about $1.8 million, the monthly fee is about $2,500, which includes meals and urgent medical care.
"For a lot of people, $2,500 a month is about what they spend anyway," Allen said. "When you think about your home expenses, association fees, eating out, travel ... you're pretty close to that figure already."
Operating expenses are supported through commercial ventures, such as an 80,000-square-foot mall managed by CB Richard Ellis. Merchants selling big-ticket items have access to markets where the ship docks. In addition, the scale of the ship -- it would have a displacement greater than some American aircraft carriers -- allows it to diffuse costs over more sources.
Unlike its predecessor, the Orphalese is less about travel than it is about being in the right place at the right time, according to Ron Estroff, itinerary director. Passengers may see the ports-of-call as they wish, however the schedule is set around premier events.
"Everything on board is event-driven. Basically, we're trying to be at an international event every four to five days," Estroff said. "Ship residents can take part or explore on their own. Businesses that are on the Orphalese would be available to sell at that particular port at that particular time."
Estroff plans to minimize down time by keeping residents excited about what comes next. Aside from the events themselves, he plans to bring experts aboard for discussions and demos pertinent to the next stop, or stars from the last one just to party.
"We could have one of the most fascinating accounts of sea battles and history of anyone. We could have the winners from awards presentations in Los Angeles on board for their post-show celebrations," Estroff said.
"Don (Allen) told me not to look for 'unique.' He wanted me to look for 'interesting.' The one thing we don't want to do is bore people, and we have plenty of options in case they don't have an interest in the main event."
Despite the nonstop travel, the Orphalese is akin to a vacation home, according to Bailey, who said she plans to promote the ship among yacht clubs as well.
"We've explored just about every type of land-based living environment. We've gone to the tops of mountains and into canyons in the desert. Where is there left for us to go?" Bailey said. "The Orphalese can be thought of as the ultimate second home: Any place in the world you would want to be, it would be there."
Target buyers are typically older, but are of any background. A unifying theme is a desire for travel.
"Travel is the biggest thing for retirees," she said.
If sales meet expectations, the Orphalese would begin its journey some time in 2008.
The seas may already be crowded by then. Rival companies are at work to build The Magellan, a vessel by an Arizona developer, and The Four Seasons, a ship named for the hotel chain that is behind it.