HARMONY II is the exciting new addition to Bristol harbour's vessel list, which promises to become the city's only resident cruise ship – although she technically comes under the term yacht. The luxury vessel arrived in her new berth near Millennium Square last month, and her nine-strong crew are now preparing to launch her role as the floating equivalent of a new four-star hotel for Bristol. Who said the city was in the middle of a recession?

"It is a difficult time to try to launch any kind of business at the luxury end of the market, but I think the money is still there, it's just that people are a little bit more cautious about spending it," says master mariner Martin Greenslade, as he shows me around the 189ft (58m) ship.

"But if you don't keep pushing forward with this kind of project, then you'd just be giving in to the recession, and you'd never come out of it."I believe there will be enough business for HARMONY II to develop into a successful vessel." She's certainly come a long way since her early days as a Croatian passenger ferry in the 1950s.

In more recent years, the ship was owned by a Russian millionaire, who ran it as his private yacht. "He'd pretty much run it into the ground by the time he sold it in 2001," explains Martin. "What you see today is unrecognisable as being the same ship. Almost everything on here, including the engine and most of the hull, is new."

The ship – then called The Prince Albert – was bought by brothers Martin and Alan Pedley, the Essex-based millionaire owners of Pedley Furniture International, the bespoke furniture maker, which is most famous for having fitted out all of the top Hilton hotels.

They renamed it after their father's beloved sailing yacht, Harmony, which he had built in the 1950s. "The brothers bought HARMONY II to run it as a sort of floating showroom for their furniture," explains Martin as we walk into the opulent lounge at the ship's heart. "It took them the best part of five years to strip it down and renovate it to the luxurious standard that you can see today."

The brothers kept the vessel on the Thames at Canary Wharf, and used it to host international clients for a couple of years. But then they decided they could do more with the ship. They sought the opinion of cruising expert Martin Greenslade, a former officer on P&O cruise ships who now works as a Bristol Channel pilot and also runs his company Global Cruising from his office in Portishead.

"They told me they were thinking about taking the ship down to the Mediterranean to run it as a luxury cruising yacht, but I advised against the idea," says Martin. "I think it's much more suited to cold water cruising, so I suggested basing it in Bristol and specialising in luxury cruises up and down the Irish Sea – up to Scotland and over to Ireland, as well as across the South West, the Welsh coast and Liverpool and the North West."

Martin came on board as the operations manager, and the in-port captain. He will keep a rota of a number of other master mariners to captain the vessel at sea. "But I had the honour of bringing her around on the two-day voyage from London," adds Martin. "It was a wonderful experience. She sails beautifully at sea." The ship can accommodate 12 guests when cruising the Bristol Channel and West coast. More than 12 passengers would make her a passenger ship rather than a yacht and make the operation considerably more tied up in red tape, explains Martin .

But HARMONY II will also be able to cater for up to 150 people for corporate and private functions while docked.

"We are planning to specialise in luxury golf-themed cruises up to Scotland and over to Ireland," says Martin. "But the vessel can also be chartered for any trip around the Bristol Channel and West coast for as little as £200 per person per day. "We can be pretty flexible, and I'll sit down with anyone chartering the yacht to work out an individual cruise based on the list of ports that we can use. "We've already had a lot of interest from individuals who are interested in chartering the yacht to mark special occasions like birthdays and weddings, and it will be an excellent venue for corporate events and parties.

"Companies can even hire us for a 24-hour cruise, so they can have a series of special conferences with their employees in an unusual setting." The ship boasts a large dark wood-panelled dining room, which can be converted during the day into an impressive conference room. There's also a large lounge, bar and even a 40-seat cinema below the waterline. The luxury continues on deck, where guests can relax in a hot tub.

The ship has six plush cabins, as well as two even more opulent suites. "The Pedley brothers have furnished each cabin as a recreation of a different bedroom from the main Hilton hotels around the world that they have worked on," explains Martin. "The cabins are so large, you tend to feel as if you're in a hotel rather than at sea. "It is very luxurious, but I do feel it is, for many people, affordable luxury. You can have all this for as little as £200 per night, which is considerably less than you would pay for chartering most luxury yachts. "It's probably even cheaper than the tariffs you would find in most four-star hotels."

The inaugural cruise will take place from June 18-23, taking in Clovelly, Lundy, Penzance, Dartmouth and Weymouth. The ship will spend much of the summer in Scotland taking passengers around some of the highlights of the golfing season.  "But Bristol will very much be her home port," says Martin. "We've already taken lots of bookings to host functions later in the year while in port, and we will be here during this year's Harbour Festival. So there's plenty for us to look forward to."