Hedonism Makes Comeback as Monaco Pitches Post-Crisis Yachts

Hedonism Makes Comeback as Monaco Pitches Post-Crisis Yachts

The largest vessel at the Monaco Yacht Show last week was the Quattroelle, an 88-meter boat with marble floors, bronze balustrades, Murano glass chandeliers and a baby grand piano — evidence expensive toys are back. With a charter price of $1 million a week, the super-yacht at the annual trade show that ended Sept. 28 also had a “collectable art” blue and white zigzag painted helicopter perched on one deck and a Porsche 918 Spyder parked on another.“It’s a buyers’ market but it’s turning fast,” Peter Thompson, a partner at brokerage Worth Avenue Yachts, said in an interview aboard another boat, the 58-meter Mi Sueno, as she sailed toward Monaco. She’s listed for sale at $40 million.

The global financial crisis triggered by the Lehman Brothers Holdings Inc. bankruptcy in 2008 led to an almost 20 percent drop in super-yacht deliveries the following year and a 60 percent drop in new orders. Now, as the U.S. stock market roars back and economic growth is slowly returning in many regions, the hundreds of shipbuilders and brokers who descended on the Mediterranean principality were increasingly confident that the worst is now behind them.

“We can see that there is demand,” said Peter Lurssen, managing partner of family-owned Lurssen Werft GmbH shipyard based in Bremen, Germany, which specializes in building the longest super-yachts.

The shipyard delivered the Quattroelle — whose name represents love, life, liberty and luxury — for an undisclosed price in January and then the even-larger Azzam, which at 180 meters surpasses billionaire Roman Abramovich’s Eclipse vessel for the record.

“It’s total hedonism,” said Thompson.

Rising Sales

Figures published this month indicate the tide may just be turning. Yachts sales rose 37 percent during the first six months of this year compared with the same period last year, according to the 2012 study of super-yachts by brokerage Camper & Nicholsons International. It tracks shipyards as well as the brokerage business of buying, selling and chartering motorized and sailing yachts measuring more than 24 meters.

According to the review, 169 boats were delivered last year worth 3.5 billion euros ($4.7 billion), a 6 percent drop from 179 in 2011. Since a 2008 record of 261, the number has steadily declined.

“It has clearly dropped,” said Lurssen. “Six or seven years ago it was much bigger.”

Nevertheless, clues in the study point to an improving environment. The number of contracts signed for new boats rose to 152 last year compared with 141 and a smaller proportion of the existing fleet was for sale.

New Markets

“The American market is starting to move,” Fabio Ermetto, chairman of brokerage Fraser Yachts, said in an interview. “Europe will follow, but not as quickly.”

The boom in Russian demand for yachts has subsided, although owners are now preoccupied with upgrading “to the next step,” he said. Markets in Latin America and China are emerging.

Yachts preened for charter or for sale were crammed into Monaco’s harbor last week as brokers jockeyed to attract customers aboard their real-estate. Between last year and 2007, the yacht-brokerage industry has doubled.

With just under a third of the world’s super-yacht fleet of 6,290 for sale at an estimated combined value of $17 billion, asking prices have dropped by a fifth since the pre-Lehman days, according to the Camper & Nicholsons study.

The heightened competition means yacht builders, designers, crews and chefs go all out to cater to every whim and folly of super-yachting clients, according to Glynne Smith, the captain of Mi Sueno.

Beats Hotels

One weekend getaway he oversaw on a private yacht in the Mediterranean recently included belly dancers and live bands at each port of call as well as fireworks loaded onto barges designed to illuminate, on cue, the darkened harbor skies — all for about half-a-million dollars.

“This smokes a five-star hotel,” he said. “No hotel in the world can match what we do.”

As the super-yachts crowding the waters outside Monaco came into view, Thompson pointed out the Nero, a 90-meter boat listed for sale at 60 million euros and styled to resemble J. Pierpont Morgan’s Corsair. There was also the Cakewalk, the largest boat to come out of a U.S. shipyard in three-quarters of a century, listed at $192 million.

“The thing about yachts is that no one needs them,” he said.

To contact the reporters on this story: Tara Patel in Paris at tpatel2@bloomberg.net; Caroline Connan in London at cconnan@bloomberg.net