It’s not your grandfather’s yacht anymore. Uber-rich young people are flocking to buy luxury boats for space on the high seas during the COVID-19 pandemic.
Yacht seller Fraser sold $1.6 billion in inventory in 2021, a 175% increase over the prior year. CEO Raphael Sauleau told Yahoo Finance Live that young crypto investors and tech startup executives are fueling the boating industry boom. According to Forbes, a record 493 people joined the billionaires club globally in 2021, including nine new crypto billionaires.
“The background of these younger buyers is pretty diverse, but mainly [people] from internet companies and obviously finance,” said Sauleau.
Two years ago the average age of Fraser’s customer base was between 55 and 65 years old. That age range has now fallen to between 45 and 55 years old, but Sauleau said the fastest growing segment of buyers are freshly minted millionaires and billionaires in their mid-20s.
“We had one young gentleman who sold a couple of software companies he developed and then went into yachting, where he's having a rather good time today and is actually looking into buying a second yacht now,” he added.
For these younger buyers, size matters. Sauleau said 100-foot superyachts are popular and carry an average price tag of $7 million with over-the-top-amenities like state-of-the-art gyms, beach clubs and cinemas on board.
Over 40% of Fraser’s clients are first-time yacht buyers and like homes and autos, they are selling yachts for the full-asking price. Competition is so fierce for these ultimate status symbols that Sauleau said some buyers are purchasing yachts sight unseen.
For the first time in Fraser’s history, the company did not have any yachts at last fall’s Fort Lauderdale International Boat Show because all the inventory they planned on bringing was sold out.
“A yacht is not an investment. It's a pleasure purchase,” said Sauleau. He said the need for space away from crowds during the pandemic has been a big driver of sales as the ultra-wealthy turn their yachts into “floating offices.”
“Some of our customers, they've been taking that opportunity to spend time on their yacht, sometimes for five, six months in a row, together with their family, their kids, sometimes tutors to take care of the children,” he said.
According to the U.S. National Marine Manufacturers Association, boat sales reached record highs in 2020 and 2021, and with high demand flowing into this year, inventory continues to be a challenge. Supply chain disruptions are impacting new boat deliveries, pushing more buyers to the pre-owned yacht market, which posted record sales of more than $7 billion in 2021.
“If you want today to build a new yacht, you will most likely have to wait between four to five years before taking delivery of the yacht,” Sauleau said. “You actually see today some off-market boats being sold, meaning we are calling some of our customers to see whether or not they would be interested in selling their yacht.”
Alexis Christoforous is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AlexisTVNews.