The Cost of Mega-Yachts Grows, as Does Their Size
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
You’ll be relieved to know that neither soaring fuel prices nor the hurricanes in the Gulf Coast region have put a dent in the super-yacht business. This is confirmed by Jonathan Beckett, a senior partner of Nigel Burgess, one of the world’s top three yacht brokers.
Mr. Beckett, who is in New York after tending to clients at the annual Monaco yacht show, adds a twist to the old saw: “If you have to ask about the price of fuel, you probably can’t afford the yacht.” In fact, there’s a good chance most of us can’t afford the yacht anyway.
“When I started in this business in 1980, a good-sized yacht was 60 feet, and a really large one was 120 feet. A million dollars was an extraordinary price. Now the mega-yachts are running well over 300 feet, and costing more than $200 million,” Mr. Beckett said.
Nigel Burgess specializes in the sales of such craft, as well as charter arrangements and new yacht orders. These days, the construction can sometimes resemble that of a small ocean liner, and in fact mega-yachts are being built in yards that also produce naval ships.
The London-based company was founded in 1975 by Nigel Burgess, a “keen” yachtsman who competed in solo races worldwide and actually died racing, in the Bay of Biscayne, 14 years ago. Since then, Mr. Beckett and his partner, Daniel Ponchau, have gone on to build a company of some 70 employees with offices in Monaco, Fort Lauderdale, Fla., and, most recently, New York. Revenues for the firm are about $15 million to $20 million, with sales commissions contributing the bulk of income.
At the moment, the company has 12 yachts for sale. The smallest is 120 feet, the largest 460 feet, with an asking price of more than $250 million. Commissions are negotiated on these huge sales, but can run as much as 10% on smaller craft. The company is unusual in the trade in that its sales brokers are full-time employees, not independent agents. It is also unique in having been awarded the Queen’s Award for Enterprise; it was the first yacht broker to receive it.
So who can afford this new generation of super-yachts (now called by some giga-yachts, since the megayacht designation somehow seems inadequate)? Mainly, the newer, larger boats are being ordered by Russians, Arabs, and Americans. They are not “personalities,” Mr. Beckett said, which we assume is Londonspeak for celebrities, and does not imply that they are dull.
Mostly, they are industrialists who are ordering the yachts for personal use as opposed to charter, and who are looking for the ultimate in luxury, privacy, and possibly security. “The majority of buyers are self-made. There are very few old money buyers, regardless of nationality. A lot are in their 30s and 40s. Ten or 15 years ago people were more discreet. They didn’t want their names used. Now they don’t mind.”
Many Nigel Burgess clients outfit their yachts with every possible amenity, including helicopters, bowling alleys, speedboats, cinemas, gyms, swimming pools, and saunas. Equipping the yacht is just the beginning. A $200 million mega-yacht costs about $10 million to $15 million a year to operate, even though few travel very far. The crew can number as many as 30, depending on how many live on board. Even Mr. Beckett is astonished at the expenditures: “I’m still staggered by it. It’s difficult for outsiders to fathom.”
Demand is excellent for new boats and charters. There were 651 mega-yachts under construction at the start of this year, up from 507 a year earlier, and 482 the year before that, according to ShowBoats International magazine. Demand is so good, in fact, that clients have to queue for boatyard space. Recently, a Nigel Burgess client made inquiries about building a 400-foot yacht; he was told the yard couldn’t even begin work for a year. Damage to Trinity Boatyard in Louisiana, the best-known American builder, won’t help the situation.
It is not too late to line up a boat for next summer. The lovely Boadicea, for instance, is available. The yacht is 231 feet long, can accommodate 12 passengers, and offers four speedboats on board, wave-runners, a sailing dinghy, three windsurfers, three canoes, waterskiing equipment, fishing gear, a cinema, piano, gym, and a barbecue. All that for a mere $420,000 a week.
More affordable is La Coveta, a 124-foot craft with room for eight guests. It, too, offers water toys and entertainment, but rents out for a mere $73,500 during the high season. Sadly, you would have to do without the piano.
Can the fun persist? Mr. Beckett has seen that the business is vulnerable to disasters or terrorism: “We had quite a dip after 9/11. But there’s a lot of disposable income around at the moment.” No kidding.