There is a new generation of ultra-high-net-worth individuals that’s radically changing the face of luxury.” So says a new report by Wealth-X and Camper & Nicholsons International, whose top thinkers say the fastest-growing segment of people who have $30 million or more are those who inherited wealth and then expanded it dramatically. This younger generation — say, 40 or 50 years old — grew up traveling the world with their parents. What they really want now, the report states, is to cruise to places their parents never imagined possible.
“The thing they really like the best is being able to tell special stories,” says Winston Chesterfield, the Wealth-X lead researcher on the study. “Not, ‘The King came aboard,’ but, ‘We had some sunburn, and the crew went ashore and found aloe plants for us.’ That tells other people they’ve done something special. They’ve had an adventure.”
The yachts still matter, of course, but the luxury makes the ultra-wealthy feel all the more, well, luxurious if those yachts are in truly remote destinations. This desire is fueling everything from charter demand in Antarctica and Indonesia to new yacht construction that pushes the boundaries of traditional yacht design.
“What we’re seeing from clients is a desire to explore more,” says Jimmy Carroll, director of marketing and communications at Winch Design. “One of our designs has circumnavigated.”
Carroll says the new generation of wealthy buyers wants such features as ice-breaking hulls. They want their yachts to be self-sufficient for more than a month without ever visiting a port. Clients from the West Coast of the United States, in particular, are demanding more efficient and eco-friendly designs — “not only when motoring,” Carroll says, “but also when being built.”
On the charter market, these tendencies are manifesting as inquiries for bookings in nontraditional destinations. The West Mediterranean, long the most popular region for crewed yacht charter, still tops the list, but it has been in decline since 2014, according to the report. Meanwhile, destinations previously considered exotic with only a handful of yachts available are seeing a surge, including the Seychelles and Maldives in the Indian Ocean.
“As this younger generation wants these experiences, the biggest problem may become the small supply of charter yachts in these destinations,” says Kurt Fraser, marketing director for Camper & Nicholsons International. Indeed, that company and others have been reporting charter activity since at least summer 2015 that is close to, or on par with, demand prior to the global economic crash, when multiple bidders used to make competing offers to secure top charter yachts in popular spots. And on the horizon is the next generation of wealth in China, where a new segment of demand for yachts is expected to emerge.
“When more of the fleet moves to Southeast Asia, more Asian people will come,” Fraser says.
Will a luxury yacht in Vietnam or Vanuatu soon hold more cachet than one in Monaco or Marseille?
“When you go to exotic places, you feel the luxury of your yacht even more,” Chesterfield says. “That’s the contrast. That’s the value. Plopping down on a beach in Barbados doesn’t have the same effect.”
According to the report, the size of yachts being chartered is relatively unchanged. New destinations are the rising trend.