Posted: 17th September 2014 | Written by: Richard Donkin
Welcome to Monaco Yacht Show, the world’s biggest and most glamorous second-hand mart. I’ve never seen the show described this way and many industry outsiders might be surprised to think of it as a showroom for what Americans might call “pre-loved” motor yachts.
But, as the industry knows very well, most of the yachts here this year and every other year are on the market, and some of them at knock down prices if you can call €10m off a €30m yacht a bit of a snip.
Of course, these sums are all relative. A €20m superyacht is hardly a snip, even for the mega-wealthy and particularly when you throw in the annual running costs of maybe €2m to €3m a year.
If, as one broker told me this week, the cream of the second-hand slack in the market has all but been taken up in the last year, could it be that buyers might turn away from the residue, fearful of throwing good money after bad, looking after what can soon turn in to the proverbial millstone when the initial love affair is over?
Could it be that the industry is approaching the stage where superyachts are sold on for scrap or to end their days as houseboats on the Isle of Wight or some creek in Suffolk?
Unlike the commercial shipping industry where old boats can be converted in to scrap steel, a glass-reinforced plastic motor yacht has limited scrap value. For some owners the stage at which their former pride and joy has slipped from asset to liability may have already passed, almost without their notice. The realisation of this transformation isn’t so much a slap in the face but more of a drip-feed in to the consciousness with every new bill for maintenance, mooring, staffing, power and the like.
One desperate seller, who’d barely used his superyacht since he was persuaded to buy a new build, described the pain of ownership as something akin to a pin in his shoe. “When I sold the boat for him,” said his broker, “it was like someone had just removed the pin.”
The question I asked myself, on hearing this story, is: should the broker have sold the boat to someone so unfitted for ownership in the first place? It’s a difficult one to answer. I’d argue that good brokers should always insist that prospective buyers charter a yacht first to see how well it fits the dream.
But if the buyer is daft enough to insist on buying there and then, it could be argued that there’s a limit to broker responsibility. Sometimes you simply can’t save people from themselves. The sales director of one of the biggest yards said quite publically last year that people would be mad to buy a superyacht. He meant it only half-jokingly, but statements can look rather bald in print and it’s never a sensible maxim in business to pour scorn on your customers.
Besides, that’s part of the allure of superyacht ownership: “Look at me, I’m so rich I can afford the ultimate statement of excess. Sure, it costs a fortune, but I can spend my way through several fortunes and still won’t have dented my billions.” That’s the way it is for the super rich. No matter how hard you try, no mater how materialistic you are, it’s difficult to fritter away a billion dollars – possibly more of a challenge than earning it.
Long before you’ve spent the cash, your profligacy will have taken you down the philosophical path that ends on the desert island or in the hermit’s cave as you search out the simpler things in life – the things that are true and honest, that carry meaning.
You can’t find that in a quail’s egg or a caviar canapé. You can have drawers stuffed with Rolex watches for every day of the month, but they do get heavy on the wrist after a while and if you need to know the time, isn’t that poverty of a kind?
The cleverest superyacht owners are those who have made such discoveries through yacht ownership. I know of one owner who has his captain set him down on a quiet beach most days where he sits in a chair and reads his paper, just as he did before he made it rich. Perhaps it needs untold wealth for some people to discover that what they wanted most in life was what they already had. To be able to say “I can go here or there or do this or that, but this is what I really want to do” – that is the self-knowledge we need if we’re to find the happiness we crave.
But can we find such happiness in Monaco? It’s difficult at yacht show time. Potential buyers and their representatives tend to be guarded by brokers who have been known to physically fend off rival brokers as they take an interested party to view a yacht. The harbour is the glitz, the showground, and the real business tends to happen elsewhere, but still the sellers and the brokers and suppliers come to town, if only to exchange stories, make new friends and contacts and mark their cards for the difficult process of selling ahead.
There are other shows, but Monaco is in a class of its own. I’ve been for the last two years and last year chaired a session at the opening conference but I don’t put together a busy schedule of meetings. I just like to soak up the atmosphere. Last year I met a few new people and turned some acquaintances in to friends. I got a free straw hat – a Feadship hat that had to be the most practical freebie at the event. I put a J-Craft through its paces - what a boat - and missed too many meals. There just isn’t time to eat much.
The previous year I went up the mast of Jim Clark’s Athena, just for the view from the top, pictured above. Athena is still for sale two years later at a reduced price. It’ll make a beautiful acquisition for someone who appreciates a real yacht with sails. People keep asking: are you going to Monaco? I’m not sure I am. It’s so big and over-the-top. But that’s part of the attraction, and there are will be a few new boats there too, borrowed from the owners so yards can show off their latest work. Monaco is a bazaar, the most bizarre bazaar I know, but what else can we expect? This is the world of superyachts – a world apart.
Related article: Monaco Yacht Show Preview.
Richard Donkin is a writer, journalist and photographer. He writes on yachting and the superyacht industry for the Financial Times and is the author of two books, The History of Work and The Future of Work.
In addition to his sailing blog 'Cardinal Points', Richard writes on fishing, travel, employment and life, all of which can be found on his website at RichardDonkin.com