26 February 2015

The Bigger The Better?

It would be easy to assume from the increasing number of dramatically large concepts and the general industry obsession with size over the last few years that we have entered the age of the megayacht. Highly anticipated deliveries of yachts like Lürssen’s 180m M/Y AZZAM in 2013 and this year’s 140m Ocean Victory from Fincantieri, and big ‘pipeline’ projects like the 85m sailing yacht Vitters and Oceanco are currently collaborating on, have only served to draw more attention to this elite realm.
“Bigger is certainly an attraction,” says Ronald van Hulst, Commercial Director at Dutch shipyard Royal Huisman. “Just as we all tend to admire someone who has climbed the highest mountain, I think it is natural that we gravitate towards larger yachts. These, after all, are marked feats of human ingenuity.” But does the magnetism of size actually translate into an increase in large yacht purchases? “The constant focus on the top tier could give the impression to ‘outsiders’ that the megayacht market is increasing substantially,” admits Jan Jaap Minnema, a sales broker for Fraser Yachts. “However, if you look at the facts and figures you will see that the actual growth is different.” The truth is, the bulk of new-build orders still stem from the sub-50m category. In fact, only 15 yachts of 70m-plus have been signed since January 2013. Not a small figure, but still a comparatively small market share. “The number of clients who can and want to afford these types of yachts remains the same,” says Minnema, who recently sold the largest yacht ever to be built in China, the 88m M/Y ILLUSION. “It is a small market with a few players.” M/Y ILLUSION Yacht Clients may not all be rushing out to buy the 90m leviathan they have always wanted, but figures taken from January to June 2014 by Superyacht Intelligence do show that the average LOA of yachts may be on the rise. Where once the 30m to 40m size bracket was far and away the most popular in terms of new orders, orders for yachts in the 40m to 70m category are now almost as common, indicating that while there is a migration towards larger yachts, it is a bit less dramatic than the headlines often suggest. Several are already committed to serving the niche market of clients at the top end. Iconic yards such as Lürssen and Blohm+Voss or designers like Terence Disdale are known for their dedication to gigantic projects. Similarly, in 2005, Alblasserdam-based yard Oceanco, whose yachts in the past have included a 42m, made the decision to focus its energy almost exclusively on creating fully custom yachts over 80m. “Eleven out of the 25 yachts we have delivered to date are among the 100 largest yachts in the world,” says Marcel Onkenhout, Oceanco’s CEO, confirming that the yard has had steady enquiries for yachts in the 80m to 130m sector since it targeted its focus. “We have a very positive outlook for the custom-built superyacht market in the 80m-plus category.” In fact, as a direct response to market demand, Oceanco has enlarged its infrastructure by increasing its physical capacity – by the close of 2014, it will open a new facility that will be able to accommodate projects up to 140m in length. There is absolutely no question that projects of this size carry serious sex appeal. Not only does the mystery that surrounds many of them make them even more fascinating, but their dramatic dimensions and the innovation that is at the heart of much of their design is something that is unrivalled in other luxury realms. The available space on board yachts over 80m is incomparable and as a result they can come with everything from multiple helicopter landing pads to convertible swimming pool-come-squash courts or even IMAX cinema screens. And it goes without saying that for those clients wanting something that will attract attention (and envy) from fellow owners, charterers and passers by, big is best. When it comes to chartering as well, there are advantages to bigger yachts that come down to more than just the design, space and ego. “Bigger yachts tend to have more experienced crew, particularly in the more senior positions,” says Pierrik Devic, a charter broker with Fraser Yachts. He admits he often has more confidence placing guests on larger yachts than smaller vessels. “With a larger crew, the crewmembers will be more dedicated to their individual roles as well, and it is more likely the owner of a 60m-plus will invest more in his crew to ensure that he really has the best chef or the best chief steward/ess to look after him than what an owner of a 30m vessel might do.” While there are clients for whom a yacht at the top end of the fleet is exactly what they want, there is a danger that this obsession with size is possibly distracting some potential clients from the smaller yachts that might actually offer a better yachting experience for them and their families. Large yachts can rarely claim to be intimate and inconspicuous. Designer Martin Francis, instrumental in barrier-breaking giants like M/Y ECO and M/Y A, admits that although he always tries to ensure that owners do not lose a sense of intimacy even if they are cruising with a small family group on a large vessel, it can be difficult when a yacht has a large crew, for example. Designer Rob Doyle adds that most of his clients want to stay under the radar: “they value their privacy and don’t want publicity so they focus on the lower and mid-range boats, sub-45m and the 60m to 75m motoryachts.” M/Y ALEXANDRA V Owner of M/Y ALEXANDRA V John Brendmoe is someone who, after chartering everything from 50ft catamarans and 37m explorers to 100m motoryachts, decided that big yachts did not offer him what he and his family wanted. “I have chartered with Fraser Yachts since 2000, and there has been a lot of charters through the years,” he says. “Of course everybody likes big boats, but I chartered big boats and I was not happy. I was disappointed that I didn’t have the opportunity to come into port or close to the beach. I was not confident with having 16 crew; I don’t need a bell to call for a drink.” For him, a yacht should bring you closer to the ocean and the big yachts act more as a barrier. As a result, he purchased the 30m M/Y ALEXANDRA V – a yacht that allows him to have just six crew members and access marinas, beaches and archipelagos the world over. “The bigger the boat you have, the more expensive and the more complicated it gets,” he says. “It becomes like a huge company. In my case I’m very happy with a 30m yacht right now.” For Tamer Abdouni, a dedicated charter client with Fraser Yachts for the past six years, chartering has also helped him settle on his ideal size. “We have been upgrading [over the years] and now prefer the 50m range as its comfort levels and services suit our needs more,” he says. “I think 50m is the best size for chartering vis a vis size, comfort, toys, and most importantly port accommodation as some ports can’t berth yachts over 50m.” For Feadship’s CEO Hank de Vries, the obsession with size is ultimately irrelevant. “Bigger is nicer to talk about, yes, but in my mind it is much more fun to look within size brackets at quality, regardless of size,” he says. Royal Huisman’s Van Hulst agrees: “In our market, our order book indicates that size does not matter, our clients order what they want and what they want is not determined by size.” And this is really the crux of it: the best size of yacht, whether for charter or purchase, comes entirely down to the client. M/Y ILLUSION Many in the industry question whether in today’s market owners are jumping in at the top end too quickly. When in the past we typically saw clients start small and then work their way up the ladder to a size they felt comfortable with, today’s owners are often going in high from the outset. Some argue that this will result in disappointed or disillusioned owners who end up with a yacht they don’t use or enjoy. However, Martin Francis offers the example of owner Larry Ellison, who through following his instincts, naturally found the best size for him, going from M/Y KATUNA at 73m, up to M/Y RISING SUN (138.4m) before realising that this was much too big and settling for M/Y MUSASHI at 88m. “The beauty of yachting is there are many mechanics at work to conceive a deal; emotion has a very strong voice in this process,” says Minnema. “Brokerage is not about talking, but rather about listening. Evaluating the client’s use of previous yachts, charter choice and changes in lifestyle. Clients grow into their yachting life and it is a dynamic process, which needs to be modified all the time.” This article and images originally appeared in Fraser yachting magazine