Yachting trends among UHNWI during COVID-19

*Press embargo until July 15, 2020

Northrop & Johnson’s recent study on ultra high net worth individuals highlights data collected from clients with regard to the yachting industry both in general and amid the global COVID-19 pandemic.

Client question: Yacht access

Northrop & Johnson customers are a mix of current and former yacht owners and yacht charter vacationers.

Of those surveyed, 42% currently own a yacht, with 27% having previously owned a yacht and 41% having chartered a yacht at least once in the past five years. The average sale price of yachts brokered by Northrop & Johnson is $9.8 million while the average yacht charter is $152,000 per week. That excludes fuel, food, port charges and crew gratuities.

Client question: What is the length of your current yacht or the one you most recently owned?

Most respondents who took part in our survey own or owned yachts between 50 feet and 100 feet, with 15% owning yachts between 100 feet and 200 feet. Two percent said they own or owned yachts exceeding 200 feet in length.

Client question: What size yacht do you typically charter?

Over 8 in 10 (82%) of the respondents charter yachts between 50 feet and 200 feet in length, equally split between yachts that measure between 100 feet and 200 feet and those between 50 feet and 100 feet long.

Client question: Charter duration

The average length of charters is 8.1 days, with seven days (59%) being the most popular, followed by 8 to 13 days (24%), less than 7 days (13%) and two weeks or longer (4%).

Client question: How far in advance do you typically start researching your next yacht charter?

Customers typically start researching their next yacht charter 6 to 12 months in advance (45%) with just over a quarter (28%) starting 3 to 6 months prior to embarkation. Seventeen percent (17%) start more than a year in advance with only 10% waiting until inside three months, including 4% who wait until less than a month.

Client question: Do you currently have a yacht charter booked for the remainder of the year?

The health-safety benefits of yacht charters are causing a surge in interest. One in six (17%) of respondents had a yacht charter booked at the time of the survey. However, 15% of respondents who did not have a booking requested a Northrop & Johnson broker to contact them regarding a yacht charter.

Keep in mind that 42% of respondents own a yacht, although owners also charter when they need a different size or when their yacht isn’t positioned to the destination they want to visit.

Client question: Of those who were planning to charter a yacht, with COVID-19, what are your plans when it comes to chartering a yacht during the remainder of 2020?

Still, it’s not clear at this point that yachting will see a surge equal to that of private aviation. Of customers who have charters on the books, 77% said they will move forward or are taking a wait-and-see approach, while 23% say they will cancel or reschedule.

Money is not the issue. The main culprit is restrictions on travel and non-citizen arrivals that had been in place and are still in place in many popular destinations across the Caribbean and Europe. This has impacted the normal migration of yachts from the Caribbean in the winter to the Mediterranean for the summer season.

To keep clients up to date on the current destination options and assist them in navigating their next charter, Northrop & Johnson developed a country-by-country Superyacht Travel Guide that contains border reopening information and important news and updates as it pertains to health, safety and travel and leisure activities that is updated in real-time.

Client question: Looking ahead, which areas of the world are you interested in for future yachting vacations?

The Caribbean (46%) followed by the Western Mediterranean (41%) and Eastern Mediterranean (38%) then Florida/Bahamas (30%) are the destinations that respondents said they are most interested in sailing for future yacht vacations.

Alaska/Pacific, New England/Atlantic Canada, and South Pacific, all considered niche destinations, each garnered interest from 19% of yacht lovers. Other destinations seeing interest include Australia/ New Zealand (14%), Northern Europe (13%), Southeast Asia (10%), and Great Lakes (9%).

“While clients are indicating that they plan to charter closer to home for the near term, there is significant opportunity to attract high-value travelers to more exotic destinations,” said Ziriakus. “The question for destinations interested in attracting yachts is two-fold; do you have the infrastructure to support this business, and, what are you doing to encourage clients to venture to your waters?”

Client question: In conjunction with your yachting vacations, which of the following do you typically do?

The good news for hotels, resorts and villas is that about half of the time, yachters combine land-based stays with their vacations at sea. Nearly a third (31%) add additional vacation time near the port of embarkation or disembarkation, while more than a quarter (27%) said they combine their yacht vacation with land-based stays at another destination away from the places they started or ended their cruise.

Client question: What are the most critical factors for you in selecting a yacht for charter?

What factors most influence yacht selection? The first factor by a significant margin is Availability of Yacht in Preferred Destination, noted by 74% of respondents. Budget (61%), Number of Staterooms and Guest Capacity (57%), and Yacht Style (55%) were grouped as the next determining factors, followed by Crew Reputation (45%) and Website Photos (43%).

Between a third and a quarter of respondents listed Water Toys Available (32%), Ability To Speak With Captain/Crew (30%), Build Date (30%), Chef’s Reputation (28%), High-Speed Internet (27%), and Video Tours (24%).

Broker was cited by 20% as a critical factor, with 14% saying the Ability to Visit the Yacht Prior To Booking was important. Perhaps because there are so many diverse activities, Dining Areas (9%) and Gym (7%) were only noted by less than 10% of respondents.

“Yachting vacations are destination vacations,” says Ziriakus. “Destinations need to collaborate and develop close partnerships with the yachting industry as, simply put, the economic opportunity is massive.”

Broker question: Entry to the yacht charter market

In our survey of brokers, the most common way new customers are introduced to the benefits of yacht charters is when they were previously a guest on a superyacht (78%) and it was recommended by a friend who owns or charters yachts (76%). Articles (22%) and advertising (12%) were followed by seeing a show about superyachts on TV (6%) and specifically the popular show Below Deck (6%).

Broker question: Who is typically involved in the decision process when chartering a yacht?

Who is involved in the decision process when chartering a yacht? From Northrop & Johnson brokers, it is mainly the Head of Household/ Primary Earner (80%) and that person’s Spouse/Partner (67%). Family Members are involved 20% of the time, with Outside Advisors, including Family Offices and Wealth Managers chiming in 12% of the time. If you are lucky enough to get an invite, it’s unlikely your hosts will ask you to get involved in selecting the yacht (6%).

Broker Ann Avery notes, while the Head of Household often leads in the yacht selection process, after the fact, the Partner is often the primary contact in working through the details, including provisioning and itinerary.

Broker question: Have you seen an increase in first-timers in the charter market?

Brokers also report a strong increase in new blood. Over 7 in 10 (71%) said they have seen an increase in first-timers to the charter market, with 18% saying they’ve seen a big increase. While 27% said there has been no change of significance, only 2% said they have seen any decrease.

The influx of newbies is also impacting age. One Northrop & Johnson broker says, “New [charter clients] are a bit younger than the current clients.”

Broker question: What changes have you seen in terms of yacht size?

Over two-thirds (68%) of the advisors say there is also more interest in larger yachts. Brokers say that’s partly a factor of there being more selection of larger yachts on the charter market.

Broker question: Who do charter customers typically sail with?

Of the various support staff of UHNWIs, Nannies are most likely to come on yacht charters, with 76% of brokers saying it happens Often (30%) or Sometimes (46%).

Just over a quarter (26%) of brokers say clients bring Personal Assistants Often (4%) or Sometimes (22%). Brokers say Personal Assistants (37%), Personal Chefs (39%), Personal Doctors (41%), Security (59%) and Personal Trainers (35%) Rarely get to join the fun.

Broker question: What are some of the most typical questions & requests received by the brokers of Northrop & Johnson?

While customers ask about discounts, equally prevalent are questions and requests around dining aboard, particularly about healthy options and chef credentials. The types of toys, from wave runners to slides, are also a key topic, as is arranging talented therapists for massage treatments.

Brokers say guidance in working out the best itinerary is also top-of-the-list, including the best destinations, what to do and where to eat, including restaurant reservations.

Some customers want references from previous guests on a yacht, while others have questions about bringing children or even pets.

Broker question: What are some of the most unusual requests received by the brokers of Northrop & Johnson?

Non-routine requests brokers report range from having a band flown in for a birthday party to installing a Nespresso machine in the master stateroom. To accommodate a guest who wanted to have fresh fish each day, the Captain arranged to have a mate go out at 4 a.m. each morning to intercept local fishermen before they could reach the market.

As a sign of the times, a recent request asked for the crew to be quarantined for two weeks prior to arrival. Another request was to change guests in the middle of the charter.

One charter client only was interested in yachts with helicopters, although he didn’t actually want to fly. It was just for show. Another wanted to charter a yacht, but just sit at the dock for the entire week, while yet another wanted to stay in a hotel at night and have the yacht for use during the day.

If it’s legal, the answer is yes. Like the time one Northrop & Johnson broker arranged a German Octoberfest party in traditional garb, complete with band, on the yacht, in the Bay of Naples, Italy.

There was also the request for an all-female crew as well as to have a special teapot. And last-minute requests are not uncommon, although wanting a series of custom ice sculptures three hours before a party isn’t the norm. Yes, it was done.

One customer wanted all duvets replaced by Merino wool blankets. Another asked for a Grand Piano to be boarded for a party – just for one night. Done, as was the request to make sure there was a backgammon board.