The next wave

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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.

A study led by the International University of Monaco (IUM) in association with the Italian shipyard Rossinavi researches the likes and dislikes of the emerging millennial yachting market.

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. Younger owners are going to appreciate adventure and sports more than mahogany and cigars. 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. The yacht being only part of their fast-moving lifestyles. 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.

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 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.

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.

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. 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. According to the study, the Millenials are going to do things differently and the product will have to be re-packaged, but the yachts will not change that much and the ownership concept will not go away anytime soon. 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: seeing their photos on Facebook means we can get a pretty good idea of their interests and tastes and 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. A broker, and an active vlogger, also confesses that most of his business leads, especially amongst younger clients, come from his YouTube channel. More and more clients who contact him 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. Research is ongoing, but 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. 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.

(Text extracted from the article "The New Wave" written by Justin Ratcliffe for the 2018 edition of MYS Summer Magazine).

Picture © Jeff Brown - with the courtesy of Heesen Yachts