S15 E01: Jim Murren, CEO and Executive Chairman of The Ritz-Carlton Yacht Collection

[Music] You're listening to the luxury item, the podcast on the business of luxury and the people and companies that are shaping the future of the luxury industry. Here's your host, Scott Kerr. The luxury hotel yacht is one of the most competitive and exciting new areas of luxury travel. The Ritzkalton was first to market with the launch of the Ritzkalton Yacht collections first Yacht Everema in 2022, with other leading luxury hospitality brands quickly announcing plans to enter the high seas with their own superyots. Their goal is straight forward yet ambitious. To give brand enthusiasts an experience that not only meets but exceeds what they have come to expect from their favorite land-based super luxury hotel brands. My guest on the luxury item podcast is Jim Marin, CEO of the Ritzkalton Yacht collection, which now boasts a fleet of three superyots, Everema, Ilma and Luminara. The collection is meant to provide all the luxury and freedom of a private yacht with the refinement and service Ritzkalton is known for. Jim Marin was appointed as executive chairman of the Ritzkalton Yacht collection in 2023 and soon stepped into the CEO role alongside his chair responsibilities. Prior to joining the Ritzkalton Yacht collection, Jim has decades of experience in hospitality and entertainment, having been chairman and CEO of MGM Resorts International from 2008 to 2020, and presently is co-chairman of Cirque du Soleil. Throughout his career, his strategic vision has generated world-class entertainment while fostering innovation and sustainability. He is known to embrace emerging technologies to expand into new markets and create transformational luxury brands around the world. He is now leading the Ritzkalton Yacht collection through a rapidly growing cruise and superyotting transformation. Welcome to the luxury item, Jim. Well, thanks for having me. Thank you so much for joining me. The ultra high-end subset of cruising is so hot right now, it's growing much faster than the overall industry. Big name luxury resort and hotel brands like the Ritzkalton for seasons in a man have been all in for meeting the demand with new ships. The Ritzkalton Yacht collection launched its inaugural vessel of Rima in 2022 and it marked a turning point in luxury hospitality. It was the first time a hotel brand offered guests a floating five-star experience. You pioneered the category. Not long before that, superyot sales went bananas during the pandemic as the very wealthy sought even more privacy and isolation and this coincided with the collective wealth of the planet's billionaires rising. Was the idea of a Ritzkalton Yacht collection driven by this shift or was the concept in motion prior to the pandemic? Well, I like the way you describe bananas. I think that's exactly what happened. No, this actually this idea is well over a dozen years in the making. Mary-Olt and the Ritzkalton company had talked about this for well over a decade. We didn't announce the Ritzkalton Yacht collection until 2017 but as say the conversation went on longer than that so it significantly predates COVID and what we were trying to do there is create a very different category. We're not trying to replicate the cruise industry at all and we're not trying to replicate the resort industry. We're looking for an experience that didn't previously exist in the industry in terms of luxury at sea in a category that now we pioneered and we're going to have some other competitors. Did you go into designing the experience on the Avreama the same way you approach opening a new Ritzkalton property with the Guest in mind first? Absolutely. We work very closely with Ritzkalton and their design team and what they have accomplished in the Ritzkaltons and in the Ritzkalton reserves to create an ultra-luxury travel experience. We looked at what was going on in the ultra-luxury cruise market and of course we know the resort business well. We tried to elevate and I think we've accomplished an elevated experience at sea versus what has been out there in the market. I'm more replicating what you'd expect at the most exclusive resort on land. That launched in 2022 and in the experience you get what you'd expect to get at a Ritzkalton the great spas, the great restaurants and what we've done that's unique to us is we've created a marina experience so that our yachtgoers can actually experience the water. They swim, experience water sports lounge out on a marina that we set off the stern of the boat which is quite unique. The boats themselves, the yachts, are super yachts. Avreama that you mentioned is 119 meters long. She has a 150 suites. Ilma, her older sister, is 240 meters long with 220 suites and are newest in our fleet, Luminarra, who sails in a couple weeks. Passengers is a little bit bigger still at 242 meters. So we're initial bookings invitation only to Ritzkalton's most loyal guests like the ones who experience stays at your hotels and resorts. They were. We did that initially and the first several itineraries of Avreama back in October 22 were all Ritzkalton guests that had pre-booked prior to our even construction of Avreama and about 75% of all of our guests now in all of our yachts are our bond boy members. So they're very loyal to the Marriott loyalty system. Some of them have cruised as well on some of the more luxury elevated cruise companies but most of them frankly had not ever cruised and didn't have a desire to do so. And so they were quite surprised that Ritzkalton got into this vertical but they knew it to expect because of the legacy of Ritzkalton and they it's up to us at Ritzkalton yacht collection to deliver on that expectation. So they they had high expectations but as I say many of them are new to the water so didn't really know what to expect so the thrill of discovery has been wonderful to see. I imagine your clientele are these discerning luxury travelers who mainly vacation at beautifully designed signature properties with stellar service or at stylish rental villas in Spain or France that are equipped with chefs and staff and Ritzkalton Super yacht offers them something new and different to experience from the brand. Is that the profile of their typical guest? That's exactly the profile. These are folks that either directly or through travel agents that focus on luxury vacations are quite familiar with and enjoy a safari luxury safari. They'll rent a villa in the Mediterranean. They'll do a wine tour of France. They'll have a educational tour that they'll do on archeological sites. They'll visit Petra and Jordan. They'll go to the great environmental wonders of the world and they but they don't cruise. They hadn't cruise typically but they're doing that now with us. Do many of your guests already own or charter yachts? A lot of them do. A lot of them do that and they enjoy that experience but what we can offer them is that intimacy you get in a beautiful cabin when you want to be alone but also the social interaction that you would get in our lounges and our pool decks or jacuzzi decks. We have an art bar on Luminara which is quite special. We have a very large gym for the gym rats beautiful big spa so things that you don't get on even on their private yacht we can provide them and so they like both. This is a little different particularly we see a lot of generational families, even multi-generational families, cruise, you know the grandparents, the parents and the kids all on the same journey. They just can't do that on a private charter. If they did obviously they're spending well over $500,000 a week to do it so we offer a nice alternative. Ritz Carlton is about to launch its third super yacht Luminara which sets sail this summer. The collection's second new build super yacht Ilma took her maiden voyage last September so as the fleet expands does Ritz Carlton apply learnings from the previous guest and product experience to shape how the next vessel is designed? We do. We'd like to say that continuous learning is really part of our DNA. We have really expert maritime designers and operators that work with resort designers and resort operators. We're really pioneered this hotel at CIDA that our yachts have, of course, a captain and an expert crew. They also have a general manager that comes from the Ritz Carlton organization. All of our crew on the yachts that you mentioned, 300 plus crew members are trained under the Ritz Carlton training program. All those ladies and gentlemen have gone through that training. And they really, in many of them now, that were on our third yacht, have already had contracts of employment on our prior yachts of Rema and Ilma. So we've learned a bit through operating. We've learned that entertainment is really important to a guest, not just the serenity, the equality of a yachting experience, but having elevated entertainment. We do long parties. We do a lot of music, magicians, art programs, culinary programs, book readings, lectures. They like that learning element, discovery element of their travel. And we can provide that and we're certainly doing that on Luminar, our latest. Could you talk a little bit more about Luminar and what's the difference between it and its two sisters and what is the itinerary for the inaugural Luminar recruit? Sure. Luminar starts in the Mediterranean. Is launching to revenue passengers in July. One of our first cruises we're doing is a collaboration with Sotheby's actually, which is going to be really fun. I think exciting because what we can do there is work with an itinerary in the Mediterranean. I think it's called Masterpieces in the Mediterranean. It's an auction voyage, but we stop at a variety of ports where we have museum tours, gallery tours. Sotheby's has specialists on board for lectures, we have private collections. That's really kind of a once in a lifetime experience. We like doing those kind of experiences where you go not just on a walking tour, but let's say you go to a vineyard with a fifth generation wine maker to tell you about his or her heritage and of wine making and how that has affected the way they look at the environment even. We're doing that pavance actually. With Luminar because she's going out to the Asia Pacific market, imagine having an artisan in Vietnam talk about lacquer techniques or Asian art product. Our guests are looking for those kinds of bespoke experiences. We can do that particularly because many of our ports are more secluded, less traveled, smaller, so they are not frequented or cannot be frequented by the big cruise ships. We can get into different areas which are less discovered and less crowded. I would imagine designing a super yacht as a complex multifaceted process involving close collaboration between the owner, designers, naval architects and engineers. It typically begins with a detailed brief outlining the owner's vision. When you and your team first sat down with the architects and designers of Revrema, Ilma and Luminara. Does it start with a detailed briefing defining the super yacht's purpose, intended use, style, features, etc? That's perfectly described of what we do. We have a variety of talks about the luxury experience where luxury is going, what the luxury traveler is expecting now. As you know, it's less about acquiring brands, it's more about meaningful trips, access, authenticity, unforgettable moments. They want much more discovery in their itineraries, educationally oriented. We need to create a yacht that provides those kind of opportunities. Not only when they're on shore, but on board, we have a tremendous number of interior designers that we use throughout Europe to create our architectural and interior design packages. We have our curators. Luminara alone has over 750 different pieces of art and 65% of them were commissioned for Luminara. We work very closely with somebody that we respect in that field. That's what they expect because these are discerning guests that our collectors themselves they'll want to take an art tour on board which we provide. And they want to know that we care as much about the culinary experiences they do. That's why we brought on board. For example, on Luminara and Ilma, we brought in a Michelin star chef Fabio Trabucci. He's got a tasty menu on board both yachts inspired by Venice. We have Michael Meena on board both yachts. He's Egyptian by birth. He has Mediterranean and Middle Eastern influences in his food. We do a Pan Asian concept on both Ilma, Afremah and Luminara. Very popular with the Mimis food, Thai, Korean, Cantonese food. We work with mixologists to have really refined cocktail menus and design around that. And I really want to focus on this marina because it's really unique. Obviously you just can't do this on a cruise ship. You can on a private yacht where you go swimming off the stern of the yacht or take a paddleboard or lounge on a lounger and really get that visceral connection to the sea which is particularly in these beautiful waters that we sail in which is so important to people. You recently marked your second year anniversary as CEO of Ritz Carlton Yacht Collection. You're gearing up to deliver your second super yacht under your leadership. Part of that you served as chairman and CEO of MGM Resorts International where its core business is gaming and entertainment. Ultra luxury hospitality and gaming and entertainment are both highly competitive businesses and guests and both have more options than ever. But the target audiences and expectations are different. What do you see are the biggest differences between the two sectors when it comes to ways of attracting and retaining guests? Thank you for that question. Great career at MGM. I was there for over 25 years. I love the company. So a shareholder. And I ran it for 12 years before I retired. And what we learned at MGM, I think people would say that now is we learned early that we're not a gaming company or casino company but we're an entertainment company. We worked hard in most of our capital investments over decades. We're in the non gaming areas. Theaters, arenas, stadiums, lounges, bars, restaurants, conference facilities, public spaces, art programs, sculpture gardens. And what we learned to gender great customer loyalty is to create these unforgettable experiences and meet and greet with Lady Gaga and Bruno Mars and curate the fountains at Bellagio with your own playlist and back of the house tours of many of the really cool areas of technology and entertainment that you'd see in a mega resort like Arya or Bellagio or MGM. Those kind of experiences are priceless and engender great customer loyalty. That translates very directly to Ritz Carlton-Jah. At MGM, we had a cater and wanted to cater to every segment of the consumer from the most value conscious at say Excalibur and Circus Circus to the ultra luxury consumer that stays at the mansion at MGM or at Bellagio for example. But at Ritz Carlton-Jant, we are exclusively catering to the Heiden-Earth individual that is this discerning guest that is very, very, very particular. They want to value proposition as well, but they view value differently. They are really focused on those experiences and moments and memories that we can create and have created over the last few years. So loyalty is, I think, transferable as a philosophy, but we are far more targeted and focused at the ultra luxury level at Ritz Carlton-Jant. You mentioned in an interview last year that you felt that the luxury hotel's super yacht market is a $5 billion total addressable market. Even if you add up the capacity of super yachts from you, a man, or antics press and four seasons and double that supply, it's just a small sliver relative to the demand. So when you look at those projections, do you also take into consideration the intensifying competition for your clients among ultra luxury hotels, exploration and expedition cruise lines, luxury safaris, and other ultra tourism alternatives that are going a step further with their own top of the stratabaspoke experiences? You really do have to do that because, as I say, that's really the decisions that our guests have is not just should they try a Ritz Carlton yacht or a competitor's yacht experience, but should they go on that other luxury experience like a safari or renting a beautiful villa? So I look at it at all as competition, but the market is vast. We had a number of big time companies do market studies for us. And yes, we do believe the market is about a $5 billion market. And we're just going to scratch the surface over the next several years. These yachts are very capital intensive. They take three years to build. They take three years of design and development before the three years to build. So the amount of supply that's going to come into the market is really fairly diminimous relative to the demand for it. And frankly, we're looking forward to the help because we're the lone ranger out there of marketing this product. We're the only one sailing in this category. And we spend a lot of money on marketing to introduce people to the idea of a luxury yacht experience. Four seasons is coming into the market. As you mentioned, a man or an express, they'll have to do what we did three, four years ago and induce trial to their guests, market to their guests, which is really marketing the category, which we think is going to help us. And of course, we've learned a lot over the last several years. And I think we're better upward as a result of that. So I think we view it as an opportunity for guests to have ever more experiences and options which they deserve. They worked hard for their money. And they want that optionality. And we're looking forward to being that option of choice for them. As you well know, across the entire service landscape, the meaning of luxury is shifting. High net worth customers increasingly value unique experiences and vibrant atmosphere over opulent formality. Bane data showed that last year, luxury spending increasingly shifted from goods to experiences. Experiences showed the strongest growth as consumers, prioritize travel, social events and wellness focused activities over traditional consumption. So knowing this shift is in full force, how does it shape your itineraries, destinations, ports and experiences? Well, we really feel like with three yachts, we can really serve a lot of the world and go to many parts of the world that people want to explore. Whether that be in the Baltics, where Ilma is going later this summer or in the Mediterranean, where the yachts are today or in the Asia Pacific market or in Polynesia and Hawaii, where we're going to be going for the first time next year. In all those cases, we're looking for those boutique ports, those lesser traffic destinations, those areas where you can immerse yourself in culture and frankly not be surrounded by all the big mega cruise ships around you. Ports that feel a little bit more intimate, undiscovered. Our guests have told us clearly they want more optionality on shore. They want to learn, they want to experience, they want to create moments that they can remember forever. And that's what we work on. Itinerary design is a very big part of our secret sauce. And if you were to get online and get on in Ritz Carlton yacht, take a look at the ports that we go to, you'll see the diversity of them and the creativity we think of them. Then when we can partner as we are, for example, with Sotheby's, we've done this with other partners, that's just a completely unique experience that you just wouldn't get otherwise. And we like doing that more and more and we will be doing that more, particularly as we bring Luminara and into the Asia Pacific market where a lot of folks, you know, the majority of our customers today are North American guests. They're much younger than the typical cruise customer. As I say, many cases, multi-generational families on board, but a lot of them haven't been to the Asia Pacific market, go to Thailand and Singapore, go to Alaska and Canada. And so they're going to be able to experience that with us on Luminara. So we really want to create those kind of opportunities where they can do something they've just never done before and we can do that now with three yachts. In curating these artinaries, do you think about how to best leverage your core hotel business? We work really closely with Marriott. It's a big competitive advantage that we have because Marriott through its luxury collection led by Ritz Carlton, but with their other brands as well, obviously, with St. Regis and Boulgary that they operate and other brands. They have luxury resorts in most every market that we sail to, particularly active in Asia Pacific where Ritz Carlton is a household name. So the pre-trip and the post-trip experience is very important to the guest. It's not that they're airlifted onto our yacht. They need to fly someplace. They want that experience to be seamless. They're going to stay likely in a hotel resort someplace for a night waiting for our yacht to arrive. They're going to disembark, might stay a week more in a destination. That's very common for our guests. So having that network with Marriott's very valuable and as a say, the majority of our guests are bond-void members and they are loyal to the brand. The growth of the luxury sector post-pandemic has led to retail offerings on luxury cruise ships. Ritz's Starboard group has been curating and managing luxury retail operations for the Ritz Carlton yacht collection. Last year Boulgary launched its first boutique on a super yacht. I think it was the Ilma. Could you talk about how you approach luxury retail on your super yachts and the strategies to drive guests to shop? Sure. This was a learning with Averima. Our guests were looking for more shopping. Not a massive amount of shopping experiences but very targeted high luxury, bespoke luxury experiences. We work with Starboard to expand that offering on Ilma with Boulgary. We're doing it again with Luminara with IWC and Cartier and Piaget and a couple others. The idea of luxury retail is really a natural. extension of that guest experience. They expect that. They want to prove some one in a lifetime kind of items. I WC for example will be presenting a time pieces that they've never had available at C before. And all the luxury brands are taking this as a challenge to show off some of their offerings for the first time. And that weaves in really well with the spa experience that we have in the curated culinary experiences we have. It really weaves together with this cultural journey that a lot of people are on. It extends beyond just the experience it extends into jewelry and art and clothing particularly inspired by a lot of the destination ports that we visit. And so we want that retail to feel like that personal and very place-driven. I'm sure you're doing intense R&D work on ships four five and beyond as we speak. How do you and your teams identify emerging trends that enable you to anticipate future needs and challenges whether it's sustainability solutions, cutting edge technologies, etc. Well we have a what I believe to be an extraordinary marine team that work tirelessly on not only improving the operational efficiencies and safety of our existing yachts but to look at what the where the industry is going and what environmental programs we can deploy because that's a very big element of the consumer consciousness of our guests. So that a lot of R&D work goes into that. We are working on yachts four and five right now in the R&D phase. It's really looking at how do we elevate the experience even further adding to what we've already learned. But really the focus right now very frankly is on Luminara and continuing its improvement on Ilma and on Averima. As I say these design shrets and work take years in the making. So we need to be mindful of the growth of the company which we project and anticipate and expect. But we don't want to lose sight of what we're doing right now and nothing right now frankly is more important than a perfect launch of Luminara. Some of your competitors are diverging into other categories like private aviation and luxury train voyages. Does expanding outside the luxury super yacht space interest you for the brand? I don't think so for us. I have seen that and I understand it and we look at that but our focus is is ever elevating the yachting experience. The marina that we designed was first of its kind and had to be innovated by us and our partners that designed that. And as we talked about earlier, luxury travel is very very competitive and at the same time's never been more exciting and fascinating. So we really want to focus on the yachting experience, looking at ways to enhance it, always to make sure that our repeat guess and remarkably already 25% of our guests sailing today have already sailed with us even though we only started sailing in October of 22. So they want to see what we are up to next. They become part of the family and they have their preferences largely now they're deciding where to go, what yacht to pick based on where the yacht's going. But they also want to see what we're doing on board as well. They want to make sure that we're continuously innovating and that's really our focus. So Jim, my final question is the luxury item question which I ask on my guess. If you were stranded on a deserted island and you could only have one single luxury item with you, what would that luxury item be? It can't be any form of air, water, transportation or anything that requires mobile service so you can call somebody at the Ritzkalt and yacht collection to pick you up off that island. It's just you on this lonely island all by yourself. What would that single luxury item you would like to have with you? I have, this is a confession but I travel with my favorite pillow. I don't know if that's luxury but it's something that's important to me and so I think I'm kind of an orchid a little bit. I'm not really a rough kind of guy so maybe a really high quality tent with great bedding and my pillow with me would be the one thing I would really like assuming you're going to feed me because I like to keep you're on your own Jim. All right, well I'll take the tent and I'll forage for myself. Jim Marin, Executive Chairman and CEO of the Ritzkalt and Collection, thank you so much for joining me on the luxury item. It's been my honor, thank you very much. That's it for this episode of the Luxury Item Podcast. Thank you so much for listening. If you found this useful and entertaining I would be really grateful if you can share it with a friend or colleague. I would love it if you subscribe so you never miss an episode and while you're there be sure to rate and review us on Apple podcasts. It really helps other listeners find us. The luxury item podcast is a production of Silver Tone Consulting. I'm your host Scott Kerr. Until next time.