The Trend In SuperYachting Is Renting, Not Owning
With high cost of maintenance in mind, UHNWs (ultra-high-net-worth individuals) looking to sail the high seas often charters the yachts to sail.
According to “The State of Wealth, Luxury and Yachting” report released last week by researcher Wealth-X and yacht management and sales firm Camper & Nicholsons, UHNWs, those defined as those with a minimum net worth of $30-M, took 21% more charters in Y 2015 than in Y 2014.
“Sales Vs. charters is always a big discussion with clients,” said a senior charter broker with Camper & Nicholsons. “I think for some, the fact of being able to walk on and experience what that yacht has to offer for one week and go away, leave all the troubles behind, it’s a big plus. They don’t have to worry about the chef needing a month off, the captain needing to go into the yard, the engine has blown. They don’t want to have to manage.”
A week on a Superyacht can cost up to $200-K on average, the report found, while the average purchase price is a bit more than $10-M.
268 Superyachts were sold in Y 2015, compared with Y 271 in Y 2014 and 242 in Y 2013.
The average charter fee went up 1.3%, from Y 2014 to 2015.
Many of the Ultra-high-net-worth individuals who opt for purchases end up chartering their yachts out to others to offset the steep maintenance fees.
For a $10-M superyacht, the annual maintenance comes in around $1 million, meaning the boat will have to spend between 6 to 9 weeks being chartered to reach a break-even point, depending on what garners on the rental market.
Yes, it will help offset maintenance, but that is barring no major mechanical breakdowns, the location and crew.
If a Superyacht is kept in the Caribbean it will likely be chartered just 3-5 weeks a year.
Superyachts in the Mediterranean end up rented 8-12 weeks a year, agent fees and value-added taxes cutting into the profit, so there no guarantee that putting a Superyacht up for charter will recoup the owner’s maintenance costs, despite the growing popularity of chartering.
There are also some UHNW’s chartering yachts to see if they’re interested in buying one, and others who charter to travel to more adventurous destinations.
A new wave of Superyacht enthusiasts prefers traveling to remote locations.
“It’s more convenient, in the sense that they can charter where they want to and not have to worry about moving the yacht,” a research analyst with Wealth-X, said. “We’ve seen a trend of trying out new destinations. If you want to try out Asia one month and Antarctica the next, there’s a lot of hassle if you own the yacht.”
Have a terrific weekend.