The next wave

Article published in the MYS Summer Magazine, #2018 | By Justin Ratcliff

 

How do we attract a new wave of superyacht owners? All eyes are on emerging UHNWIs, and the yachting industry is busy engaging with the priorities of millennials in the hope they will take to the water like the previous generation did.

 

The European owner of 49-metre M/Y Aurora, which premiered at the 2017 Monaco Yacht Show, is Rossinavi’s youngest client to date. In his early 30s, he wanted a yacht that represented his millennial mindset: fast performance, dynamic design and a flexible layout. Prompted by the growing number of young UHNWIs, last year the Italian shipyard partnered with the International University of Monaco (IUM) to research the likes and dislikes of the emerging millennial market.

“We’ve been looking at millennials to understand how they spend their leisure time and how that transfers to the yachting lifestyle,” says Federico Rossi, COO of the family-run shipyard. “For a full-custom builder like us, it’s a fascinating market that goes beyond the bare statistics to emerge from our research.”

Technology, innovation and the environment were just some of the priorities to emerge from the study, which Rossinavi factored into a series of superyacht concepts specifically aimed at younger owners. One of these concepts, the Mark 48, was created by David J. Weiss, a young American designer who took inspiration from the design language of science fiction and—more specifically—the futuristic flying suit worn by Ironman in the Marvel movies.

“It stands to reason that younger owners are going to appreciate adventure and sports more than mahogany and cigars,” says David. “It’s a question of priorities, and luxurious comfort is less important to them than owning something new and surprising.”
For young, self-made millennials still growing their business interests, yachting is an occasional pastime rather than an enduring passion.

“They don’t think of a yacht as an end in itself, but as a sort of floating pied-à- terre for attending events like the Monaco Grand Prix or the Cannes Film Festival,” says Antonio. “They’re not interested in huge cabins, but they are into water sports and lots of exterior space for entertaining large groups of friends. They might spend a weekend on board in Sardinia, go back to work, and then join the boat the following weekend in Ibiza. It’s a different concept from the traditional two-week cruise in the summer.”

With the focus on open-air socialising, water sports, gym and spas, formal dining rooms and salons—already something of an anachronism on yachts—will be even less relevant in the future. This shift in how yachts are used is driving designers to look afresh at conventional general arrangements.

“There’s a lot of talk about blurring the barrier between exterior and interior on yachts,” says Luca. “In most cases, this usually just means putting in bigger windows or sliding glass doors, but that’s only half the battle: you also have to provide better circulation flow between the inside and outside on different deck levels.”

But there is a risk involved in designing yachts for a specific demographic. Defining what distinguishes one generation from another is not an exact science and grouping millennials into a single homogenous group is unlikely to result in solutions that suit everyone.

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This much became clear at the Superyacht Design Symposium organised by Boat International earlier this year during a debate among millennials whose parents own large yachts. Sebastien Vibe-Petersen, who co-owns the 54m Perini Navi sailing yacht Parsifal III with his father, maintained that hybrid propulsion is essential for attracting younger owners. But Alex Gibbs, whose family owns the Sunseeker Predator 115 Elysium, believes that lithium ion batteries are a stopgap technology and argued for “a bigger push in all industries towards a better solution.”

Another generalisation is that millennials value life experiences more than material possessions. They will still want the use of superyachts, but will be less interested in owning the asset. In fact, they may even see ownership as a restriction.

“We are going to see a time when the traditional idea of yacht ownership starts to follow the same path as car-sharing services: more convenient than a traditional taxi, and a real alternative to owning a car,” says Erwin Bamps, CEO of Dubai-based Gulf Craft. “There are huge challenges ahead, but also huge opportunities for those companies that find the right balance in the evolving market.”

Fractional ownership is not a new concept, but has enjoyed only limited success in the yachting world. Penny Hammond-Smith, a business development consultant based in Monaco, worked with Rossinavi to coordinate the IUM’s research project as part of its course in luxury management. She warns against over-emphasising the ‘sharing’ behaviour of Millennials.

“Sure, they’re going to do things differently and we will have to re-package the product, but I don’t believe the yachts will change that much and I don’t see the ownership concept going away anytime soon,” says Penny. “Eventually they will want their own product like the rest of us. Things change, but human nature stays the same.”

‘Re-packaging’ the product further involves how the industry communicates and interacts with the emerging market. In the past, owners were typically introduced to designers or shipyards at boat shows or via yacht brokers. Today, first contact is more often made directly through social media channels.

“It’s a much more immediate and personal form of communication, for them and us,” says Hotlab’s Antonio Romano. “From our point of view, seeing their photos on Facebook means we can get a pretty good idea of their interests and tastes before we even meet them. It makes understanding their needs or preferences that much quicker and easier.”

Social media and messaging apps are also affecting the way yacht brokers do business with owners. David Seal is a broker with Northrop & Johnson and an active vlogger. Most of his business leads, especially amongst younger clients, come from his YouTube channel.

“Just the other day I was thinking I don’t get as many emails as I used to,” says David. “But then I realised I have more and more clients who contact me through direct messaging on Facebook or with Whatsapp—and they expect an immediate response.”

The average age of superyacht owners is decreasing, but whether millennials will fill the generation gap remains to be seen. Merijn de Waard is the founder and director of the Superyacht Company, which has complied a database of more than 4,800 yachts over 30 metres in length. Research is ongoing, but his records show that self-made owners under the age of 40 make up only a tiny fraction of the total.

“This is not surprising when you think that they’re still busy with their businesses and owning a superyacht is not yet a priority,” says Merijn. “The important thing is that they charter yachts, and the industry has to be very clear about what it costs to run a yacht. In some cases, you can buy a large yacht relatively cheaply, but the running and maintenance costs over a period of five years can be much higher than the initial purchase price.”

The charter sector is strong and getting stronger, which suggests that prospective owners appreciate the yachting lifestyle and are checking out the market, possibly as a preamble to buying. In the meantime, it’s worth remembering that in 1988 when Donald Trump acquired 86-metre Nabila and renamed her Trump Princess, he was just 42 years old.

 

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