superyacht business

Billionaires are getting ready for summer with wildly spectacular superyachts

• Superyachts, the most expensive asset  a billionaire can own, are pushing the boundaries of luxury.
• The boats, which cost eight or nine figures, are getting larger and include more features than ever.
• From massage rooms to basketball courts, here's what the world's richest want on board.

For many wealthy boat owners, a private spa is a must-have on board. A sauna is a nice touch. A Jet Ski or two makes days at sea way more fun. And if you don't have someone on board who can whip up a Michelin-star-worthy meal , you might as well stay on land.

In the world of massive yachts , there's no such thing as too much. After all, if someone spends eight or nine figures to design the vessel of their dreams — or at least $500,000 a week to charter one — more is more.

"Yachting. It's not rational; it's emotional," Ralph Dazert, the head of intelligence at SuperYacht Times, told Business Insider at the Palm Beach International Boat Show, where dozens of superyachts — often defined as vessels over 30 meters in length — were on display.

And while there are certain classic features, such as jacuzzis and bars, what superyacht owners want is evolving, insiders at the show said. That might mean more crew members, more space for helicopters, or more water toys, but might also include manicure salons and putting greens.

"The bar of what is the baseline expectation has increased exponentially just over the last four or five years," Anders Kurtén, the CEO of brokerage Fraser Yachts, said. Clients are "spending more time on the boat and really wanting to extend the lifestyle they lead on the shore."

A lot of this can be chalked up to the pandemic. Superyacht purchases and charters spiked as life and luxury travel on land screeched to a halt. While the market has moderated slightly, the number of superyachts on order — 1,166 as of September, according to Boat International's Global Order Book — is still above pre-pandemic norms.

"What the pandemic really showed is that the appetite for being out there at sea, sort of living the marine lifestyle, is still as valid as ever," Kurtén said.

That means there's a lot of money on the water. The total value of the 203 superyachts over 30 meters delivered last year was $6.4 billion, according to data from SuperYacht Times. New custom builds from the world's most prestigious shipyards — Lurssen, Feadship, Oceanco , Benetti — can run into the hundreds of millions. Even used superyachts at the Palm Beach show cost as much as $75 million.

And it's not just traditional buyers like retired wealthy couples looking for a place to relax or celebrities looking for a place to party away from the paparazzi. New clients are often younger and have families, so want areas to work and watch movies . They also want pricey water toys, access to fitness equipment, or even pizza ovens for picky eaters.

"This would've never happened in the nineties," said Giovanna Vitelli, the vice president of the Azimut Benetti Group, the world's biggest producer of superyachts. "You would go with your beautiful woman, Champagne — the idea of yachting was much more showing off with your jacuzzi and things like that."

Pure opulence has made room for function.

When Benetti's Nabila set sail in 1980, its 50-person crew, gold-and-diamond-encrusted interiors, and lavish parties captured headlines and even inspired the Queen song "Kashoggi's Ship."(Seven years later, Donald Trump bought Nabila for $30 million , renaming her the Trump Princess.)

"Life on board was considered very formal — big formal dining rooms, boats were high on the water, you would be segregated from the rest of the world," Vitelli said, remembering another client who insisted on a replica of the Sistine Chapel above the dining table.

But the ostentatious, palatial-like interiors that used to be highlighted in yacht brochures have made way for lists of more functional features .

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Rather than esoteric novelties like an extra-large safe for rifles that one builder had to construct per a Russian yacht owner's request , the superyachts on display at the Palm Beach show featured basketball courts, saunas, and ice baths.

Owners want elevators and luxury gyms. Pampering options, be it a massage room, manicure station, or a professional-grade facial machine, are a dime a dozen. Some bathrooms have fancy Toto toilets, which can cost around $20,000.

Sterns (that's the back of the boat) used to be built high to guard guests' privacy. Now, they're built as "beach clubs" — an open swim platform.

And what good is a massage room if no one on board can give one? Many superyachts can hold twice as many crew members as guests, if not more. One broker, representing a boat that didn't have a masseuse, said it could be quite a "tricky" issue because if a charter wants one, they have to find someone who can massage guests and "pull their weight with the crew."

"It's not uncommon to look for a deckhand who can also mix a martini, play an instrument, maybe entertain the guests with singing, and ideally even give a massage," Kurtén said.

Of course, a crew comes at a cost . Most are considered full-time employees, requiring salaries and benefits like health insurance. Captains, first mates, and chief engineers often make six figures a year. That's without tips; a charter guest will typically spend six figures on gratuities for the crew who worked during a weeklong vacation.

For the superrich, there must be room for toys.

It's not just the onboard amenities that count. What's known as "toys" in the industry — water slides, eFoils, Jet Skis, and underwater scuba diving jets — are popular, and costs range from merely hundreds of dollars (banana boats) to millions ( submersibles , which are still popular despite the recent tragedy).

" Tenders and toys, the sky seems to be the limit," Kurtén said. "More is more."

Of course, if you can't fit all those toys in the yacht's storage space, you can just use another boat. Jeff Bezos' support yacht is a superyacht in itself, measuring 75 meters and costing tens of millions of dollars. (His main yacht, Koru , cost a reported $500 million.)

Support yachts are also faster, meaning the crew can get to a destination first and set up the Jet Skis, seapools, and the like, Dazert said. "By the time the owner arrives on the main yacht, everything's set up, and he can go and have fun."

Even tenders, the smaller vessel that brings guests from the ship to the shore, are getting glow-ups. The Nero, a 90-meter beauty available to charter for about $500,000 a week and modeled after J.P. Morgan's 1930s ship, has custom-built tenders to match the design. The most expensive ones often cost seven figures. Nero has three.

"It used to be a tender was a tender," Jeffrey Beneville, who handles yacht insurance at NFP, told BI. "Now they're called limousine tenders. Think of an incredibly luxurious gondola that's got a hard top so nobody's hair gets mussed when they're being dropped off at the Monaco Yacht Club ."

One thing that clearly hasn't changed in superyachting: showing off. If the boat next door at the marina has an indoor-outdoor cinema, it's natural to want one too. Ditto a wine cellar or helipad.

"It's a bit of a celebration of your success in life, of wealth," Vitelli, whose company is behind the Lana yacht Bill Gates chartered for a birthday party three years ago, said. "You push it a little more."

And that's a boon for yacht makers and brokers catering to the superrich.

"Our job is to make clients' dreams come true," Kurtén said.

Watch: Inside the world's biggest cruise ship that just set sail

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The Billion Dollar Superyacht Business Is Booming

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By Corina Pons (Reuters) – When Chinese billionaire Jack Ma took a trip to Spain’s Mallorca island last month, much was made of it being his first foreign foray since a 2020 fallout with regulators had clipped his wings.

However, Ma’s sunny sojourn on his newly-built 88-meter (289 ft) cruise boat Zen – estimated to be worth $200 million – also put a spotlight on a global trend: the return of the superyacht.

As the number of billionaires grows and COVID-19 has added to incentives for avoiding crowds, the multi-billion-dollar global luxury boat industry is rebounding fast after near-paralysis at the onset of the pandemic.

Related Book: Grand Ambition: An Extraordinary Yacht and the Millionaire Who Can’t Really Afford It by G. Bruce Knecht

“2021 is significantly outperforming any of the last 12 years,” said brokers Fraser Yachts.

Sales of luxury vessels longer than 30 meters (98 ft) rose over 8% in the first nine months of 2021 from the same period of 2019 pre-pandemic, according to industry publication the Superyacht Group.

The cost of a superyacht can range from $10 million second-hand to $600 million new, industry figures show.

Over 200 new ones hit the water for the first time this year until September, up from 165 in the same period of 2019, the Superyacht Group said.

Some 330 have been ordered to be ready before 2023.

“Some have seen that their ultra-rich friends who own yachts had a nice time during the pandemic, while they had to lock themselves at home,” said Pepe Garcia, chairman of Spanish shipyards MB92, the world’s leading superyacht refit firm.

“I think this phenomenon is going to last for a few years.”

MB92’s Barcelona shipyard is full to capacity with boats measuring up to 180 meters. Around 1,000 workers paint, fix engines and perform other maintenance for owners seeking to have them ready for the year-end Caribbean season.

The company’s commercial director Txema Rubio said as much as 10% of purchase value tends to be spent annually on maintenance and refits.

And with the number of billionaires soaring to 2,755 – 660 more than a year ago according to Forbes – there is clearly money washing around, even as campaigners decry the impact of private yachts, jets, and space travel on the environment.

‘ALL YOU NEED IS NOW’

Italian yacht builder Ferretti’s order book exceeded 900 million euros ($1.04 billion) in January-September, well above 2019’s full-year 691 million euros.

“There is a beautiful song by Duran Duran called ‘All you need is now’,” mused chief executive Alberto Galassi. “The pandemic has taught us how fragile our life is. Postponing is no longer an option for those who can afford it.”

At Azimut Benetti, another Italian yacht builder, the order book tripled to 1.2 billion euros by August from a year earlier, with U.S. clients driving the demand.

“The real boom started last spring,” said chief executive Marco Valle, adding that clients also sought larger boats.

The yacht sector is one of a few winners in the post-lockdown era. By contrast, just half of large cruise ships had returned to the seas by September under strict anti-COVID measures, the Cruise Lines International Association said.

Despite fears of contagion and extra COVID-related costs for travel, appetite remains high.

Spanish-based travel group Amadeus said cruise demand is on the rise for 2022.

Renting a super-yacht is also an option – if you can afford it.

A one-week luxury charter for up to 12 passengers in Greece or Italy can cost between 300,000 and 500,000 euros, two market sources said. On board facilities include spas, Michelin-level dining, watersports instruction and fitness classes.

In another popular destination, Croatia, around 433,000 people enjoyed a yacht charter holiday this year up to mid-October, 88% more than in 2020, according to the national tourist board.

The boom has plenty of spin-offs.

Refitter MB92 is seeking to expand to the Middle East and the Americas, while its Barcelona neighbor, Marina Port Vell, will build 23 new berths for superyachts.

European investment fund Squircle Capital has stakes in both companies, attracted by the sector’s high margins and evolution.

“We believe there is a very clear tendency of growth and transformation,” said its founder and director Jose Caireta.

($1 = 0.8678 euros) (Reporting by Corina Pons in Madrid, Joan Faus in Barcelona, Elisa Anzolin in Milan, Igor Ilic in Zagreb; Editing by Andrei Khalip and Andrew Cawthorne, Reuters)

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Stefan Wagstyl

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Read the headlines about sanctioned superyachts and you might think the ownership of such vessels is dominated by Russian billionaires with close links to the Kremlin. But the truth is that, while most superyacht owners are rich, most are nothing like billionaires. Nor are they necessarily Russians, let alone oligarchs loyal to President Vladimir Putin.

As our charts below show, Russian owners account for only 9 per cent of the global fleet of 1,957 boats of 40 metres or more in length, according to data from SuperYacht Times, an Amsterdam-based research group. That is way behind Americans on 24 per cent.

Admittedly, among the largest boats — those 80 metres and longer — the Russian-owned share is 20 per cent. But there are only 153 such vessels in the world. They may make a big splash, both in the water and the media, but this category represents just 8 per cent of the 40 metre-plus global fleet.

Define superyacht more broadly — starting at 24 metres, like Boat International, another research group — and you reach a global total of more than 11,000 boats, half of them owned by Americans. As one observer says: “The whole industry is held up by buyers in the 24-50 metre range. These are not oligarchs; they’re just people, generally Americans, who have done very well in business.” The most expensive yachts, costing $500mn-plus, are generally affordable only for Saudi royals and other billionaires, but a second-hand entry-level vessel of 40 metres can be had for $5mn.

Of course, this is not the whole story. For boat yards specialising in the top end of this rarefied market, sanctions have come like a bucket of dirty water on a pristine deck.

Boat International says Russian buyers finance about €3.9bn of a global order book of €35bn-€40bn, but the cash is not evenly spread. Italy is building the most superyacht projects for Russian clients, with 60 projects, followed by the Netherlands and Turkey. Yards elsewhere are much less involved in the Russian market.

Sanctions have also worried others dealing with Russian owners: brokers who buy and resell boats; charterers who hire out vessels; and the multitude of staff needed to keep these floating palaces in good order. Know-your-customer rules are much tighter, including for yachts held via tax havens such as the British Virgin Islands. “It’s not good enough to know that it’s owned by a BVI company — you have to know the people,” says Michael Howorth, a yacht industry commentator and former superyacht captain.

But brokers insist sanctions are having little impact beyond Russian owners and their networks. Overall, the industry is in rude health with record order books, boosted by buyers looking for Covid-safe holiday space.

Contrary to popular belief, superyachts are not an easy place to conceal illicit wealth. As the past few months have shown, their movements can be tracked by nerdy amateurs with laptops and apps. Once spotted, they are as inconspicuous as a row of Rolls-Royces. A country estate or a seaside villa with high fences is far more discreet. It is much easier — and cheaper — to hide money by buying a stack of Picassos or gold bars.

Rich people don’t generally buy superyachts to keep quiet about their wealth, but to flaunt it. It is — and is likely to remain — the ultimate form of conspicuous consumption.

Stefan Wagstyl is the editor of FT Wealth and FT Money. Follow Stefan on Twitter @stefanwagstyl

This article is part of FT Wealth , a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment

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