TOURIST SUBMARINES MARK ENTRANCE INTO NEW ERA FOR PASSENGER VESSEL INDUSTRY
*Editor's Note: Mr. Cain is chairman of the board of Nautilus Submarines of America, Inc., a Fort Pierce, Fla.-based company specializing in the manufacture, development, and marketing of tourist passenger submarines.
The firm is currently considering joint venture partnerships for operation of the submarines with a variety of investors. Mr.
Cain also is owner and president of Indian Trails, Inc., a luxury community in Vero Beach, Fla.
As tourist passenger submarines troll undersea reefs and shipwrecks off the coasts of Caribbean islands, their operators are reaping treasure in the form of extremely high profit margins.
Now, for the first time, these lucrative attractions are presenting opportunities for investors in the U.S., and there is plenty of room for growth and expansion.
In fact, in a recent Time magazine article, industry analysts predicted a $250-million-per-year market with more than 100 passenger submarine operations by early next decade.
The industry first experienced a period of rapid growth during the early 1980s, when manned submersibles in the offshore oil industry were effectively replaced by cost efficient Remotely Operated Vehicles (ROVs).
Perceptive engineers and investors realized that this inactive submarine fleet created an opportunity for the general public to enjoy the previously exclusive experience of underwater submarine exploration.
Larger multipassenger submarines were developed to serve the growing consumer demand, and the first multipassenger tourist submarine began operation in the Cayman Islands in 1986.
The potential revenue that the attractions can generate is substantial; the submarines dive at least five times a day, operate at approximately 90 percent capacity, cost about $50 per person per ride, and carry about 50 people. The standard submarine costs about $2.5 million, and investors can expect to turn a large profit within two years or less.
However, until recently, the Jones Act somewhat restricted the expansion of the submarine operations off the coasts of the continental U.S. and Hawaii. Anyone wanting to become involved in this growing industry in the U.S. is required to comply with the regulations and build the submarines here with approval and certification by the U.S.
Although there are manufacturers in the U.S. that specialize in underwater technology, few have actually built submarines oriented toward carrying passengers for recreational purposes.
To overcome this obstacle, one option is to establish a business relationship with an experienced manufacturer overseas, and enlist a technology transfer. Another option would be to team up with professionals in the existing commercial submarine industry in the U.S. and attempt to develop the vessels. Both options involve quite a bit of time, risk, and money.
The simplest, easiest way to enter the industry and take advantage of the outstanding profitability is to join forces with a company that has already purchased the technology and that has the full capabilities of manufacturing the submarines at a U.S. location.
This way, an investor can benefit from proven expertise not only in the manufacturing, but also in the marketing and design of the submarines.
The design of the submarines generally resembles that of an airplane and the interior can be customized to meet specific tastes and requirements based on the operating location.
Viewpoints should be large and plentiful to ensure an open, serene atmosphere, and the design should incorporate ample headroom space.
The submarines can descend to depths of 250 feet. Electrically powered thrusters propel the vessels and allow precise maneuvering to preserve the underwater surroundings.
There are several criteria for the site selection. Again, it is wise to work with a firm that has previously conducted feasibility studies and that is fully aware of the myriad conditions that compose an ideal dive site.
For example, the site should have relatively calm waters to facilitate the transfer of passengers from the subtender to the submarine. Of course, the water should be clear for maximum visibility, and the area should have a deep-water harbor.
With the proven potential for high profitability and success of the submarines on the handful of islands that currently offer the attraction, the market is ripe for additional investors to enter the industry at sites both in the U.S. and worldwide.
Other stories from January 1989 issue
- Northwest Marine Services Named Distributor Of Hamilton Marine Jets page: 5
- TOURIST SUBMARINES MARK ENTRANCE INTO NEW ERA FOR PASSENGER VESSEL INDUSTRY page: 6
- ZF Offers Wide Range Of Marine Gears For Workboats/High-Speed Craft page: 6
- 500th Voith Water Tractor, First Of New Generation, Now Under Construction* page: 7
- Tax Corrections Act Offers Good News To Domestic Operators page: 8
- Texaco Marine Services Names Gaffney President, Chief Operating Officer page: 9
- Supply Vessel Overhauled By Homeport Marine page: 9
- CRUISE SHIPPING 89 page: 10
- A.G.M.A. Elects Haley To Serve Three-Year Term On Board Of Directors page: 11
- 1989 NAPVO ANNUAL CONVENTION page: 12
- NAPVO Appoints Lauridsen Technical Consultant page: 12
- Atlantic Marine To Build Caterpillar-Powered Longliner Processor page: 13
- Wartsila-Turku Delivers Barge Carrier To USSR page: 13
- A LETTER FROM THE PRESIDENT OF THE NATIONAL ASSOCIATION OF PASSENGER VESSEL OWNERS page: 14
- Hornblower Dining Yachts Contracts Trinity Marine Group To Build West Coast's Largest Diner Boat page: 14
- Seaward Offers 105-Page Technical Manual On Marine Fendering Systems page: 14
- POTENTIAL FOR SIGNIFICANT GROWTH FORESEEN IN EXPANDING CRUISE SHIPPING INDUSTRY page: 15
- OUTSTANDING PASSENGER VESSELS OF 1988 page: 16
- New Rope Specification Sheet Available From American Manufacturing page: 27
- Alfa-Laval's Nirex Distiller And New Ice Marine Are Ideally Suited For Trawlers & Variety Of Small Vessels page: 28
- 315-Passenger Boat Delivered By Leevac page: 29
- Aeroquip Offers New Cargo Control Products Bulletin page: 29
- MagneTek Consolidates M i l i t a r y Business Efforts page: 32
- Letter Of Intent Signed By SPD To Acquire Dyncorp Unit page: 32
- First Of 39 Hopper Barges Launched At Reactivated Equitable Shipyards page: 33
- Crowley Maritime Names Sean G. Burke President, Atlantic Division page: 34
- E.H. Wachs Introduces N e w Model HPS-15 Hydrostatic Power Supply page: 35
- Wartsila Launches Baltic Cruise Ferry For V i k i n g Line page: 35
- Schichau Seebeckwerft Delivers Gas Carrier page: 36
- 1989 SNAME Meeting To Feature Diversified Technical Papers— Small Craft To Icebreakers, CAD/CAM To Instrumentation page: 38
- Trinity Marine Group Awarded $5-Million Contract To Build Two Washington State Ferries page: 38
- Sophisticated Cableship Launched At Swan Hunter's Wallsend Yard page: 41
- Sohio Oil, Subsidiary Of BP America, Makes West Coast Acquisitions page: 41
- Service Marine—A Full Service Yard For The Passenger Vessel Market page: 42
- Comsat To Provide Low-Cost Standard-C Messaging Service page: 42
- Fjellstrand Delivers High-Speed Catamarans 'Sea Cat' And 'Jetcat' page: 43
- Innovative Propulsion System From Krupp MaK Offers Smooth, Economic Service For Passenger Ships page: 44
- TFC Corporation Offers Full Line Of Trash Compactors To Meet New Annex V/MARPOL Rules page: 44
- Pictou Industries Completes Third Enlargement Of Crandall R a i l w a y Drydock page: 46
- Jamesbury Offers N e w Compact Corrosion-Resistant Actuators page: 50
- Krupp Atlas Elektronik Introduces Atlas 8630 VTC Radar Designed For Vessel Traffic Control Applications page: 53
- Understanding Marine Rope Specifications Increases Safety And Cordage Life page: 53
- Schottel Pump-Jets Allow Passenger Boat To Operate Even In Shallow Water page: 54
- Hopeman Brothers Named U.S. Representative For IMAC page: 55
- Universal Tankships Installs NTC Ship Manager Software System page: 55
- A N e w Source For CP Propeller And Control System Service page: 58
- Inspection Service Founded To Meet N e w Offshore Platform Inspection Requirements page: 58
- Quality Shipbuilders Changes Name And Revamps Structure; Jack Edwards Named President page: 58
- Morrison-Knudsen Appointed EMD Distributor In 17-State Area And All Of Caribbean page: 58
- SWDiesel-Powered 'Arctic Storm' Is Largest U.S. Factory Trawler page: 59
- Marinette Marine Completes Yard Patrol Boat Contract page: 59