A recent post on LinkedIn caught my eye. It was about another yacht/boat syndication going under. Now first of all, this is a concept which intrigues me and one I have written of before. However, this time around, something occurred to me: they are not failing because of money but because of love.
The post asked why fractional ownership in the private jet and supercar arena was successful yet not yachting and I believe, the answer lies in passion. You can justify a jet or car. Busy, global citizens need quick and efficient ways of traversing distance. There is, at the core of these products, a utilitarian purpose. Furthermore, you don’t spend a great deal of time in jets and cars. They have evolved to get you to your preferred destination with efficiency. Someone who squarely falls into the Ultra High Net Worth Individual category once told me that the time in his Bentley being driven was some of the most productive in his day.
No matter how much a marketing department will try and tell you, there is absolutely no rational reason to own a yacht.
You cannot justify it and fractional ownership fails precisely because it tries to do so to the most passionate of purchases. Having a sense of ownership about a boat or a yacht is possible the most powerful element of owning it. It is the idea of owning privacy, status, potential discovery and adventure. To then take that feeling and cut it into proportions where the benefit is only respectively partially consumed undermines the very reason to own a yacht.
‘Then what about charter?’, I hear you say. Charter, psychologically speaking, is about ownership. Just for a week. You pay the €265.000 + APA + VAT to have the yacht for a week and you are made to feel as though you own it. Once satiated by the experience, you walk down the dock not having to pay anything until you once again consume the giddy joy of being at sea in sublime luxury (side note: for some, this could well be $1000 for a day out on the local bay. The same concept applies.)
Comparatively, with yacht syndication, you purchase your share, pay for the consumables when onboard and contribute to the costs of maintenance, just as you would if you owned it outright. Yet this time, you share it and there is the inevitable negotiation over access times and frustration with the other owners whose actions lead to unscheduled maintenance. You get all the labours of owning a boat without the unfettered sense of blue water possibility at any time of the year. Charter is the opposite. You get to feel like the Owner any week of the year you are free without the continued hangover of costs. Yacht ownership is the epitome: yes, you get all the costs but also the full passion of having something so alluring as your own.
My thoughts don’t come from theory or my professional life but an experience as a teenager. My father has owned precisely seven boats since I was born; two in a fractional arrangement with the same person. The first boat was a modest 50-footer and generally, our family considered the boat to be ours alone. There were never any arguments over access as the other family simply showed little to no interest. My father is an accomplished captain so we had the boat to ourselves but there was a paid captain for the other family. They just never took up the opportunity.
The second vessel was more grand and had a full time crew. One owner had found it, loved it, negotiated the purchase and refitted it. The other felt it was a yacht which finally befitted a person of his stature. They both felt a sense of outright ownership which they didn’t have. Lo and behold, the problems started. And it did not end well.
It seems to me as long as fractional ownership schemes don’t address the very passionate, irrational nature of owning a pleasure craft then I am not sure they will ever succeed.