Private yacht industry in full flow

Global demand for private luxury yachts has been increasing steadily over the last five years. Marinas are at saturation point in many parts of the Mediterranean as well as the Caribbean with even Egypt experiencing a rapid rise in Red Sea marina developments. This growth is due to the largest demand for leisure boats ever seen.

Recreational boat ownership is currently a $25 billion international industry and sales are growing annually at 5-10 %. According to Showboats International, a publication that tracks vessel construction, in 1993 the world had fewer than 700 private owners with boats over 24 metres (79 feet). Today, there are an estimated 7000 yachts over 24 metres (79 feet) in use.

Another indicator of the strong growth of the luxury yacht industry is the potential for ‘flipping’. With waiting lists of up to three years for luxury yachts in the USA and Europe, yacht flipping is becoming a profitable business for ntrepreneurs who commission a vessel and sell it before completion.

Why is luxury yacht ownership and the trend for yacht charter holidays increasing? There are several reasons.
1. People can live tax-free through ‘off shore’ residency on a yacht, cruising the world and docking in exotic, exciting locations such as Porto Cervo Marina on the Costa Smeralda in Sardinia, Marina Frapa in Croatia, Port d’Hercule in Monte Carlo and Emerald Bay Marina in the Bahamas. Yacht ownership offshore is on a record rise. Show Boats International’s 2005 Global Order Book indicated that that year’s increase was equal to the entire order book rating for 1995. That equates to a $1.2 billion dollar increase in sales.

2. Baby boomers are splurging on travel as a way to enjoy

their retirement, wealth, relative youth and to demonstrate that

they are still intrepid pathfinders. Many baby boomers already

own everything they could want and now they demand experiences

rather than acquisitions. Social marketing research firm

DYG’s survey of status symbols highlights this. «Travel is the

number one non-materialistic way to express success,» DYG

President Madelyn Hochstein says, «and for the older set, it is

also a way to express continued youth and vitality.»

3. Yacht chartering now tops the list of the most popular and most

expensive activity for people with a net worth of more than US$10

million. In a survey of the spending habits of 198 millionaires by

Prince & Associates for Elite Traveler magazine, summer holiday

spending in 2007 is up 56 % on 2005. In particular, spending on

private yacht charters will cost an average of US$384,000 per

family this summer with the cost of chartering between $200,000 –

$250,000 per week. This is part of an increasing trend among the

wealthy for ‘experiential excursions’ that offer much more than a

typical tourist vacation. As with most trends, what the wealthy are

experiencing now the upper middle class will be aspiring to in the

coming years. The yachts may not be as large, but they will add yet

more demand to the yachting and marina industries already straining

to meet the demands of the wealthy. Expect yacht prices and

the cost of marina berths to continue to rise.

4. There are at least two dozen Russians now worth at least $1

billion, according to private bankers, and thousands of new Russian

multi-millionaires have been created in the past five years.

Roman Abramovich, the 11th richest person in the world according

to Forbes, epitomises the growing reputation of Russians as

the world leaders in conspicuous consumption. The mega wealthy

Russian has commissioned a new yacht, the Eclipse, being built

under a veil of secrecy in Germany, at a cost of around US$300

million. Yacht brokers say at least 20 % of the business for new

vessels over 200 feet is coming from Russians – more than from

any other single country including the USA.

As Mike Kelsey, from the world’s leading luxury yacht builders

Palmer Johnson in Fort Lauderdale, says, «There are yachts

being built for hundreds of millions of dollars and I think we have

not hit the ceiling yet. Although, I will say there comes a point

when a yacht is no longer a yacht; it is most certainly a ship!»

By Meredith Drynan

http://ezinearticles.com/