This is another very interesting and informative article by Chris from Relevance telling us all about fractional yacht ownership.
I love to go to Monaco grand Prix and this year was not the exception. From one side of the sprawling roof terrace of the Fairmont Hotel Monte Carlo was the thundering GP, the view on the opposite side was debatably more impressive. Dozens upon dozens of yachts, super yachts and mega yachts dotted across the bay with tenders and helicopters tearing across the sea and skyline dropping off the privileged few to their prime seats for the race.
The yachting lifestyle has always been for the elite few. The cost of a yacht alone takes most people out of the market. Combine this with fuel, maintenance, mooring and on larger vessels crew costs and you have an annual overhead from the thousands running into millions.
In recent years a new business model has entered the yachting arena which has opened the door to new owners and injected a much needed revenue stream into the industry during this tricky period in the economy.
The affordable yacht concept is not a new business model. Co-ownership or fractional ownership is not unlike the time share model used for holiday properties but without the questionable reputation – It’s free from many of the hassles of sole ownership as the cost of purchase and maintenance is shared with others.
Another big draw for potential clients is that with shared ownership, your budget does not restrict you on the size of yacht and you can enjoy a much bigger vessel with the same budget. For example, to purchase a crewed Sunseeker 66 will set you back around €1,000,000 with an annual running cost of between €120,000 and €180,000. To charter the same boat fully crewed amounts to approximately €25,000 per week. The same boat can be purchased as a ¼ owner for €249,000, with a full service and management , possible charter returns and the use of the vessel for 9 weeks of the year.
One of the main issues with yacht ownership is that owners spend so little time of the year actually on-board that that unless there is an almost limitless pot of cash, the vessel can become one enormous overhead. The now ‘golden years’ of 2005, 2006, 2007, 2008 when the market was at its peak and demand almost outweighed supply are a distant memory. There is concern that emerging markets and ‘new’ wealth from China will not necessarily lead to more builds. Espen Oeino, a Monaco-based yacht designer was recently quoted as saying “I’m not so sure we will see many Chinese clients with very large yachts, because it’s not really in their traditions’’. A reliable source who works for the world’s number 1 yacht charter and sales company told me that a recent survey showed that only 20% of the people in the world that can afford a super yacht would actually purchase one.
So is this the time for fractional yacht ownership to take off and diversify an industry dominated by the ‘super wealthy’? This may of course put a few backs up, with ‘full’ owners turning their noses up to ¼ owners but for 6 -9 weeks per year, fractional owners have access to a fully serviced, fully crewed pleasure craft with the total cost significantly cheaper than chartering for the same period.
It seems this will be a slow transition with awareness still limited to the model and few companies out there offering the service. Here is real scope for this to be a major industry shift into the way boat ownership goes forward in the next decade keeping the ‘pleasure’ in the industry with a much lower running cost.
Have you ever thought about buying a yacht? Does co-owning it sounds like an interesting opportunity? Please let us know what you think in the comments below.
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