Special Report: Super Yachts
As a way of measuring the global economy, this has got to be the coolest. From Abramovich’s Eclipse to a simple $250,000 a week charter, Kipp looks at the industry.
August 8, 2010 12:36 by Liz Peek
Tom Perkins, a venture capitalist who got in early on the phenomenal success of Google, unloaded a super-yacht last year called the Maltese Falcon – the largest sailing craft in the world, and considered by some the best designed. His asking price was $165 million; the sale took place at $100 million. This discount is extreme, but since boats in this category are typically highly personalized, they can be tough to unload.
They are also tough to keep, if your fortunes have taken a turn for the worse. Wooten says that a rough rule of thumb is that it costs 10 to 15 percent of the build cost per year to operate a vessel. So, if you plan to spend $100 million on your dream boat, you should count on laying out $10 million or so each year just to keep it afloat. And that’s only the tab for crew, dock fees, insurance, and other necessities. In other words, you pay $10 million to sit still. If you actually decide to travel, the price tag soars. Add in fuel (these vessels are not exactly fuel efficient) and food (five-star chefs are considered essential), and you start to talk real money. This brings us to the legendary banker J.P. Morgan’s oft-repeated quote that if you have to ask how much one costs, you can’t afford one.
Although that advice seemed to have fallen on deaf ears a couple of years ago, it may have played a role in the sudden collapse in new orders. After all, there are other ways to enjoy a yachting vacation. For instance, you can always charter. Though most of the biggest and most renowned vessels are not available to the hoi poloi, there are hundreds of boats available from reputable yacht brokers like Edmiston, Camper and Nicholson’s, Burgess, and others. Cain says that charters are strong. “The charter business fell 30 percent off the boom years, but since has come right back.”