The Ultra Rich Bought Bigger, More Expensive Yachts in 2015
The ultra rich spent last year buying the most fabulous—and gigantic—yachts in the world, according to the Knight Frank Wealth Report, which determined that superyacht sales were up 40 percent from 2014 to 2015. The report, conducted with Wealth-X, surveyed around 45,000 ultra-high-net-worth-individuals whose collective wealth is more than a half trillion dollars.
Defined as yachts longer than 78 feet by Knight Frank, "superyachts" are most popular in the Pacific. The boats are extremely expensive not only to purchase but also to operate. Kitty McGowan from the United States Superyacht Association estimated the annual cost for operating a 180-foot yacht was $4.75 million.
Individual retailers experienced sales increases well more than 40 percent: Y.Co, a company in Monte Carlo that focuses on yacht sales, management, and charters, said the company sold 16 superyachts in 2015, with an average length of 154 feet, for a collective sales value of $350 million. That’s twice as many as Y.Co sold in 2014, the company's chief executive officer, Charlie Birkett, said.
“I certainly don’t think we are up to the levels [of sales] that we were in pre-2008, but we are certainly getting close,” Birkett explained. He expects that by the end of 2016, there will be 48 super yachts longer than 100 meters, or 328 feet, sailing the high seas. According to market data compiled by Boat International, only 16 superyachts over 60 meters were sold in 2015. Notably, Boat International's market report, which looked at the number of superyachts sold rather than dollars spent, found that 20 fewer such ships were sold in 2015 than in 2014, with 392 and 412 on the brokerage market, respectively.
How the super wealthy use their superyachts is shifting: Once used primarily for leisurely travel around the Caribbean and Mediterranean, the Knight Frank report noted that travel destinations are changing “to more adventurous locations such as the Antarctic and Asia.”
With the change in locale comes boat redesigns. “People are looking at beach-house, single-deck living, like a loft apartment, as opposed to a conventional several-deck yacht, like a wedding cake,” Birkett explained. “The clients are younger, more adventurous, more into water sports, not just sticking to the normal cruising grounds.”
More outgoing superyacht shoppers demand a highly trained crew that can navigate and manage a ship of this size 500 to 1,000 miles away from the mainland, Birkett said. Y.Co’s superyacht crew members now include paramedics and water sport instructors.
Superyachts aren’t the only toy of the ultra wealthy. Knight Frank’s report also determined that plenty is spent on classic cars and collectables, primarily fine art. The most collected car over a million dollars was the Mercedes-Benz 300SL, best known for its gullwing doors.
“People are prepared to pay for their passions,” Andrew Shirley, editor of the report, concluded.