Masters of Their Atoll

REVIEW SUMMARY
Company. Cruise Naples and Marine Team International
Industry. Marine
Key. Diversification is key to offsetting volatile businesses in industries such as tourism and cinema.

Inside a cramped shack cooled by whirring fans at Tin City on the Naples waterfront, Lance Julian and his son Harry contemplate their role in the next big Hollywood movie.

The understated headquarters of Cruise Naples, a business that rents boats and takes tourists on sightseeing cruises, houses the brains behind the marine special effects of blockbuster movies such as Titanic and popular television shows such as Survivor.

The father-and-son duo recently coordinated the marine stunts on Hangover Part Two, in which a five-ton vessel crashed into a wedding party.

So you've got to wonder: Why aren't the Julians based in Hollywood? As it turns out, it wasn't a business decision that brought them to Naples.

The younger Julian met his wife, Libby, on the set of Survivor 6 in the Amazon jungle in 2002 and they moved to her hometown of Naples. In 2008 Harry Julian had been away for months working on the Quantum of Solace, a James Bond movie, when his 3-year-old daughter told him she hated him for being away so long. “I wanted to be home with my family,” he concluded.

So the Julians bought Cruise Naples on April 1, 2009. Despite the recession, annual sales rose from $1.4 million when they took over the 27-year-old business to $2.3 million today. “We work freakin' hard,” says the elder Julian.

To grow the business, the Julians got a $1.4 million loan from Key Bank backed by the U.S. Small Business Administration in February 2009, a testament to their business acumen considering the financial crisis was at its peak then. They rebranded Cruise Naples, bought new uniforms, spiffed up the boats and added Jet Skis to appeal to more adventure-oriented tourists.

Although he's 64, Lance Julian isn't slowing down. He's scouting locations for the next big-budget movie, which he won't name for competitive reasons. While Harry runs Cruise Naples and doesn't travel, he still helps his father on the movie side of the business by reviewing the details and the numbers.

Cruise Naples isn't a distraction from Marine Team International, the name of their movie business. In fact, Lance Julian says it's good diversification that offsets the volatility of the film industry.

The atoll master
Lance Julian got into the movie business by chance.

A sixth-generation New Zealander, Julian's family made its fortune taking a marine business public in 1986. Auckland Water Transport operated tugs, barges, ferries and sightseeing boats.

Julian later moved to Hawaii with his American-born wife in 1990 and worked for a cruise line and shipyard. While there, the producers of the movie Waterworld, starring Kevin Costner, needed help securing eight barges together to build the movie set. In 1992, Julian bid and won the contract to build the set and became its “atoll master.”

The project was so successful that Julian decided to strike out in the film business. “I resigned, went to work for Universal and formed Marine Team,” says Julian. “I was in the right place at the right time.”

Was Waterworld profitable? “Oh, God, yes,” says Julian, declining to elaborate on Marine Team's revenues or other financial information.

Here's what makes the movie business so lucrative: Julian isn't risking much of his own capital because he rents equipment and calls on a small army of as many as 300 experts who work on a freelance basis. “It isn't the capital that's required, it's the knowledge,” he says.

What's more, directors constantly change the movie script even as filming happens, which can boost the budget by five or six times. “You're never going to lose a penny,” Julian says.

Julian's reputation quickly grew among film producers, and in 1996 Marine Team was selected to be marine coordinator for Jim Cameron's blockbuster movie Titanic, starring Leonardo DiCaprio and Kate Winslet.

Marine Team also branched out into television, coordinating marine-related scenes for the reality show Survivor for more than four years. Because television shows have smaller profit margins than movies, Julian continued working on big-budget films such as The Last Samurai starring Tom Cruise and the Bond movie Quantum of Solace.

Despite the glitz and glamour of working with directors such as Steven Spielberg, Julian says the business is competitive and changing rapidly because of advances in technology. When it comes to special effects, computer-generated scenes are replacing stuntmen and real-life shoots are becoming more complex.

Cruise in Naples
When the Julians bought Cruise Naples in early 2009, they knew the recession was severe but like everyone else didn't anticipate the effects of the BP oil spill in the Gulf last year. For example, they suffered a 30% drop in fishing excursions. A couple of German tourists even asked to rent Jet Skis so they could go see the spill.

Adding rental boats and Jet Skis to their fleet of sightseeing boats and fishing charters helped boost business by 40% in the traditionally slow summer months, says Harry Julian.

In addition, Cruise Naples hired a person for group sales, targeting businesses, charitable organizations and churches in the area. The Julians emphasized customer service, hiring friendly employees and making sure the sightseeing boats weren't overcrowded.

Because Lance or Harry Julian are always at the business, they can make decisions on the spot. For example, when a couple recently asked to rent Jet Skis that were already rented out, Harry Julian let them use a boat for the same price. “Don't let anyone walk away without making a sale,” he says.

The improvements paid off. So far this year, Cruise Naples served 35,000 customers, more than the 32,000 it served in 2008, even as it has raised prices twice. While they won't share details, the Julians say they're planning a big investment into adventure-related boating they say will boost business by 30% annually. If they're track record is an indication, they'll make a splash.