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Why Are So Many Billionaires in Love with Yachts?

Yachts

In the annals of the super-rich, many paragraphs will be devoted to super yachts. Representing perhaps the height of privacy and luxury – and certainly the height of purchase price and ongoing expense – super- and mega-yachts are gigantic, gilded and gorgeous. They’re the ultimate status symbol: Steve Jobs had Venus, Roman Abramovich has the Eclipse, Paul Allen has the Octopus, and the Emir of Abu Dhabi reportedly has the Azzam (complete with its own submarine and missile defense system).

A 2014 report from UBS and Wealth-X states that ultra-high net worth individuals collectively spend $22 billion a year on yachts. Two common themes run throughout when owners are asked about the benefits of yacht ownership: family and privacy. A private jet is a wonderful luxury, but it is used for both work and leisure. A super yacht is used solely or primarily for pleasure, and they are large enough to accommodate multi-generational family gatherings in complete privacy from public view. This is apparently a billionaire’s dream come true.

Yachting has two seasons: winter season will find vessels cruising the Caribbean (both the Leeward and the Windward islands, including St. Barth’s); the Bahamas; and the Indian Ocean (Seychelles and the Maldives). Summer season finds super- and mega-yachts in the south of France; Italy; Sicily; Montenegro; the Greek Islands and Sardinia. Some can also be found at that time of year in New England and Alaska.

The emerging “hot” new yachting destinations are focused on adventure travel – places like Tahiti, Thailand, and Indonesia. And it’s a certainty that many yacht owners will take their vessels to the Cannes Film Festival and the Monaco F1 Grand Prix.

Spending time on a super yacht is an extraordinary experience. A friend recently described a party he attended one year in St. Barth’s over the year-end holiday break on Paul Allen’s yacht. He explained:

“The ‘tenders’ – the smaller boats that pick you up on shore to bring you to the yacht – in this case were incredible in their own right. They held 10 of us! The yacht itself has a submarine dock (with a yellow submarine), 2 helipads, and a glass bottom in one room so you can see the sea lit by colored lights. The wheelhouse where the captain and crew operate the ship is a tech guy’s paradise.”

Suffice it to say, it was a really good party.

Unless you happen to own a super yacht yourself, or have experience chartering one, arguably there’s no better way to experience this glamorous milieu than at the annual Monaco Yacht Show (MYS). Held this year from September 28th through October 1st, it’s the largest super yacht event in the world. Launched in 1991, it has become a must-attend event for serious yacht owners and enthusiasts the world over. The principality takes great pride in this gathering; the boat-watching and the people-watching are both superb.

While there is no rigid definition of what a “super” yacht is, the consensus is that a yacht 98 feet or longer is a super yacht – these days anything under that is considered rather small. “Mega” yachts are generally 200 feet or longer. While prices are never disclosed publicly prior to a sale, they’re based on the length of the ship. A good rule of thumb seems to be $1.5-2 million per meter at the low end. That would give a starter super yacht a price tag of $40 million+, and a mid-range one $100 million+. The best and biggest yachts cost $500-600 million to build, and the truly iconic ones can run close to $1 billion. The cost of operation is generally 10% of the value of the vessel.

Novices (like me) tend to focus on a vessel’s exterior, but the interior design and furnishings account for a great deal of the cost of a super yacht. They feature every luxury element you’d find in a billionaire’s home, including world-class art and state-of-the-art kitchens and baths.

About 125 vessels are featured each year in the MYS marina – which was built by Norman Foster – with another hundred or so at anchor in the Riviera. Almost 600 exhibiting companies and partners participate in the show, including leading luxury yacht companies and the trendiest super yacht designers and builders. Where billionaires go, luxury companies follow, so many of the most storied names in fine jewelry, watches, art and automotive are also present.

As with a car show, attendees can just browse, charter a yacht, or buy one. The Monaco Yacht Summit, held the day before the MYS, features a panel of international experts that help buyers find the best match for them. The Hotel Metropole Monte-Carlo has a program called the ‘Sapphire Experience’ that pairs each guest with a personal buyer for the event (it costs between $5,500 and $13, 000 for two nights, depending on the size of the hotel room). Monaco has several other premier hotels – including the Fairmont, the Hermitage, and the Hotel de Paris – for those not planning a yacht shopping spree (of course once you own one, you won’t need a hotel anymore!).

The MYS also doubles as a superyacht contest. There are awards for the eco-friendliest, the best interior design, the best exterior design, and the best new superyacht of the year. This year, Galactica Super Nova – built by Dutch firm Heesen – won the top titles for both finest new super yacht and best exterior design (you can see photos of the vessel, plus many more, on our Pinterest board). Owned by Vagit Alekperov, an Azerbaijani and Russian businessman who is the president of Russian oil company LUKOIL, the ship is 70-meters and can accommodate up to 12 guests. Equipped with a deck that can serve as an outdoor cinema, a concert space or a helipad, it has an infinity pool with a waterfall, and requires a crew of 16. The sales price was not disclosed, but is estimated to be $910 million (that’s $13 million per meter, in case you’re keeping score).

The rules of the MYS are that no vessel is to be shown at the show twice – one of the reasons it’s a must-attend event is because there is always something new to see. Reportedly, nearly one-third of the yachts in the marina are being shown to the public for the very first time. Because it takes years to create a new super yacht, from design to construction, the buzz and excitement build. This year, the 70-meter sailing yacht Sybaris (which has the largest flying bridge ever), the Mia Elise II (notable for its wine cabinet, and for sale for $50 million), the Sarastar (built by Mondomarine, it’s the largest in its fleet to date), the Maybe (the largest yacht ever built in Spain), the Quinta Essentia (from Heesen, notable for its spacious master cabin), and the Lurssen 78.4-meter TV (for sale for $100 million) all had their coming-out parties.

There’s an intriguing emerging trend afoot, with automotive companies expanding into the luxury boating arena. A year ago, Aston Martin partnered with Quintessence Yachts on the AM37. Rolls Royce makes the 450EX. At this year’s MYS, Mercedes unveiled its highly-anticipated yacht model, the Arrow 460-Granturismo (the “Silver Arrow of the Seas”). List-priced at $1.7 million, the company plans to build only 10 of these. In recent years, McLaren Applied Technology has partnered with yacht builder UltraLuxum – at the 2012 MYS, one of their debut yachts came with a McLaren MP4-12C included (the car’s list price alone is $275,000).

The largest yacht at the show (and the 5th largest sailing yacht in the world) was the 80-meter Athena, built by Royal Huisman – it’s currently for sale with an asking price of $69.9 million (at that point, why not just round up to $70 million?)

For the first time this year the MYS featured a Car Deck: a new exhibition space dedicated solely to ultra-luxurious automobiles. Lamborghini, Rolls Royce, Tesla, and Centigon were co-sponsors, and guests were allowed to test drive and buy cars on the spot.

Because super yachts are built-to-order rather than on spec, the MYS features numerous concept yachts, as well as updates on works in progress. On the concept front, the Tetrahedron super yacht would rise out of the water as it gains speed (really useful in rough stormy waters). Norwegian company Haride Design showed a 350-foot concept yacht with 6 levels, a double-story grand hall, its own garden and a private beach onboard – it’s selling point is “a seamless indoor to outdoor experience” and bringing passengers closer to nature. The Solaris concept super yacht would be solar-powered, running silently on ethanol and solar panels.

The most controversial work-in-progress seems to be the super yacht “Sailing Yacht A,” being built for $450 million by Andrey Melnichenko. Designed by Philippe Starck, the yacht will have three masts, each taller than the Statue of Liberty; be 143 meters long; and require 54 crew members. It will reportedly cost $500,000 to refuel. The design, while ground-breaking, seems to be polarizing the ranks of owners and others in the ecosystem. It’s a high-class problem, but still. If you’re spending that much, it would be nice to have your peers show some love.

Today’s super yachts are as tech-savvy as they are luxurious. Evo Yachts’ Evo 43 allows the owner to expand its deck area by 40% at the touch of a smartphone. The Majesty 155 super yacht won a CEDIA award for best “smart home” technology on a yacht. Taptl manufactures yacht windows that double as a TV or GPS. Other companies are working on VR technology for yachts.

Other most-wanted features these days include state-of-the-art audio and video systems, advanced satellite guidance systems, a “beach club” on the stern with a spa, bar and water toys readily available, and eco-friendly features. A friend speculated that perhaps Tesla will follow other luxury car manufacturers into this space and figure out how to build an electric yacht.

One of the reasons for the high spirits at the MYS is that yacht sales have been steadily increasing for the past three years (there was a slight dip early in 2015).

If you become entranced and want to delve deeper into the yachting world, there is a circuit of shows to attend in the coming months (known as “boat show season”). The Fort Lauderdale International Boat Show takes place in early November, and is the largest boat show in world (two eagerly-awaited new yachts will be unveiled by U.S. firm Christensen: the Chasseur and the Silver Lining). The Palm Beach International Boat Show in March is smaller and more sophisticated; next February’s Yachts Miami Beach show will be a hotter ticket than before, as mega-yachts will be able for the first time to dock at the new Island Gardens Deep Harbour Marina on Watson Island. The Dubai International Boat Show and the Singapore Yacht Show are also highly recommended.

My in-the-know friends feel strongly that before buying a yacht, it’s imperative to charter several different ones, so that you can determine what you really love. Like luxury automobiles, there is a distinct difference in vessels designed and built in the U.S., the Netherlands, Italy, and Norway. Yacht charters generally require a 7-night commitment (no, you cannot rent one for a night to throw a party). A super-yacht charter runs in the range of $60,000+ per week, and the best way to book one is through a reputable yacht broker like Burgess Yachts. Not every yacht is available for charter, of course, but some very special ones are: Ulysses is a brand new expedition-style yacht with a luxury interior – 100 meters long, with an ice breaker and its own submersible, it can hold up to 30 guests, and it’s being marketed to people who are looking for adventure. Hey, Santa – this would be just fine as a gift this year. You don’t have to get me anything else. We good? K.

I was lucky enough to have once spent a lovely evening years ago in New York Harbor on the Highlander, the Forbes family yacht. It’s an experience I’ll never forget. There is something very special about a floating luxury palace that conveys a sense of freedom, adventure, and ease. So whether in your daydreams you are Onassis-era Jackie, or present-day Jay-Z or Beyoncé, picture yourself, your family and your friends on your own super yacht. And let the sea take you away.

1 comment on “Why Are So Many Billionaires in Love with Yachts?

  1. Pingback: Luxury Calendar: The New and Not-to-be-Missed in January

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