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TOURIST SUBMARINES MARK ENTRANCE INTO NEW ERA FOR PASSENGER VESSEL INDUSTRY By James B. Cain* *Editor's Note: Mr. Cain is chairman of the board of Nautilus Submarines of America, Inc., a Fort Pierce, Fla.-based company spe- cializing in the manufacture, development, and marketing of tourist passenger subma- rines. 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 submer- sibles in the offshore oil industry were effectively replaced by cost efficient Remotely Operated Vehi- cles (ROVs). Perceptive engineers and inves- tors realized that this inactive sub- marine 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 Is- lands in 1986. The potential revenue that the attractions can generate is substan- tial; the submarines dive at least five times a day, operate at approxi- mately 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 opera- tions off the coasts of the continen- tal U.S. and Hawaii. Anyone want- ing to become involved in this grow- ing industry in the U.S. is required to comply with the regulations and build the submarines here with ap- proval and certification by the U.S. Coast Guard. Although there are manufactur- ers in the U.S. that specialize in underwater technology, few have ac- tually built submarines oriented to- ward carrying passengers for recrea- tional 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 profes- sionals 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 subma- rines. The design of the submarines generally resembles that of an air- plane and the interior can be cus- tomized to meet specific tastes and requirements based on the operat- ing 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 pow- ered thrusters propel the vessels and allow precise maneuvering to preserve the underwater surround- ings. 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 is- lands that currently offer the attrac- tion, the market is ripe for addition- al investors to enter the industry at sites both in the U.S. and world- wide. ZF Offers Wide Range Of Marine Gears For Workboats/High-Speed Craft —Literature Offered— The West German firm of Zahn- radfabrik Friedrichshafen AG (ZF) offers an outstanding selection of marine gears. The field of applica- tion of ZF marine gears can be divided into two typical groups: gears for workboats and gears for high-speed craft. Workboats fitted with ZF gears include fishing boats, tugs, inland craft, supply ships and ferries. High-speed craft featuring ZF gears include sport and leisure vessels (yachts, etc.); official craft (police, customs and Coast Guard as well as rescue, pilot boats and all types of Navy craft); and high-speed ferries and crewboats. Some of the latest commission- ings with ZF marine gears include the following: The 125-foot customs cruiser Schleswig-Holstein. For the triple- shaft propulsion system with Deutz MWM engines of the 604 series, ZF delivered two gears of type BW 465 and one type BU 465 for transmit- ting the power of 1,100 kw each to the propellers. The 92-foot shore patrol boats Sylt and Fehmarn are equipped with twin-shaft propulsion systems for which ZF supplied gears of type BW 460 and BU 460, respectively, for transmiting the power of the Deutz MWM engines to the propel- lers. The 132-foot yacht Octopussy, said to be the fastest megayacht in the world at a speed of more than 50 knots, is fitted with three ZF gears of type BW 755 transmitting the engine power to KaMeWa water jet propulsion units. The 116-foot catamaran high- speed ferries Virgin Butterfly and Santa Maria are fitted with ZF gears of BW 755D type transmitting the Deutz MWM engine power to Ka- MeWa water jet propulsion units. The catamaran Efortoft is fitted with BU 255 model ZF gears to transmit the power of the Deutz MWM engines to KaMeWa water jet propulsion units. For other marine applications, Zahnradfabrik Friedrichshafen also offers compact and lightweight re- duction and reversing transmis- sions. The ZF group produces in Germany (Friedrichshafen), Italy (Padua) and Brazil (Sao Paulo) an annual total of more than 10,000 gears for maritime application, some with trolling devices and some with diagonally offset shafts. For further information and free literature on ZF gears, Circle 36 on Reader Service Card Atlantic Marine Expo Sponsored by National Fisherman NOVEMBER 9-11, 1989 WORLD TRADE CENTER BOSTON. MASSACHUSETTS Don't miss your best sales opportunity on the East Coast in 1989. Plan NOW to exhibit at ATLANTIC MARINE EXPO For more information. call or write: ATLANTIC MARINE EXPO 5 Milk Street. P.O Box 7437 DTS Portland. Maine 04112 207-772-3005. FAX: 207-772-5059 The Right Show... By The Right People Exhibit in the one show designed to reach more commercial fishermen and workboat professionals in the Eastern United States and Canada than all the others ATLANTIC MARINE EXPO is sponsored by National Fisherman, the same people who bring you the highly successful FISH EXPO and PACIFIC MARINE EXPO. ATLANTIC MARINE EXPO will attract top buyers from the Northeast's commercial marine industry. Circle 204 on Reader Service Card "We make them light as a feather!" Booths -Tables -Benches Interior and Exterior Various Designs Light Weight Lowest Fire Load • Coast Guard Approved • Complete Decor Assistance More Information: Ph 206/221-2376 f w Fax 206/2 21-2141^ marine 1 interiors, inc. I'.O Box 728 Langle\ WA 98260 Circle 114 on Reader Service Card Maritime Reporter/Engineering News
