Fractional Yachting Success or Failure?

Solemates?

Traditionally, the ownership of a "trading" vessel under British registry was divided into 64 shares. One could individually own just 1/64th share of the ship, or a group of upto 5 individuals could co-own a 1/64th share or multiples thereof. I think at least 50% of the shares must be held by UK citizens or at least UK registered companies...

Further, I do believe that the term "owner's cabin" dates from a previous century, when most "owners" did not necessarily wish to spend their holidays with or without their families aboard these vessels...but then again, the objectives behind such "ownership" was never less than one "of profit"!

Yet, here we are in the 21st Century. And the phrase "Joint or co-ownership of superyachts" simply refuses to go away, even if the vessels concerned still only have one "owner's cabin"...or no longer carry cargoes?!

So, which owner will have use of the yacht for this year's Monaco GP or Cannes Film Festival, pray...?!

When it comes to superyachts, let's stop calling it "fractional ownership" but the closest that's so far been achieved to the illusion. Which is perhaps a "principal" owner who reserves a certain period for his exclusive use, whether or not that is at fixed or variable dates from year to year...?! In other words, it becomes nothing more exciting than a glorified yacht management exercise combined with central agency for charters...

But with a difference perhaps: As the "conceptor" of the fractional ownership program, responsible for the initial financing and building of the superyacht in the first place, your intention is to remain one of the (major) fractional owners without ever really wishing to use the vessel as an "owner" might wish to. Your first challenge is to convince the first (and often only) major fractional owner is that he's buying into a yacht which is really worth say upto twice what the actual newbuild cost...?! Then, in order to reinforce this illusion, enlist the aid of well-known "names" to buy a few shares...?!

But who really knows, if chartering out the superyacht's "unreserved time" actually does bring in sufficient revenues to pay for the running costs, then perhaps more than one are on a "winning streak"...? At least, until it's time that the yacht is finally sold for its true market price, at which stage one imagines, those that paid "twice what the yacht was worth new" might be in for a small surprise...?!

Seriously though, when it comes to all those oil-sheikhs, who tend to use their "alcohol-free gin-palaces" in the Med for 2 or 3 weeks of the year only, this sort of "fractional-ownership" program might actually be a lot more economical than their current arrangements with the Eastern Mediterranean managers with whom they usually entrust their floating assets...?!

My 2 cents worth...

Floating Yacht Club Membership

Great topic which addresses - as was previously noted - the concept that any of us can own a piece of luxury (air, condo, resort, car) for a short duration at probably a ridiculuous (but worth the experience) cost.

I am working with a client right now in the design of a floating yacht club. We are talking "members only" to use the vessel for all the fun and toys it offers rather than the "ownership" of a luxury, shiny, formal yacht.

Your comments are invited as to your thoughts about being able to use this "club" vessel, say 200 feet long that has on board 6 luxurious cabins for rent; a fine dining sky lounge restaurant; a casual al fresco sun deck dining area and tiki bar; the use of a 40 foot sport fish that is maintained on board; jet skis; Laser sailboats; motorcycles; bicycles; kayaks; ski boats; RIBS; windsurfers; and a dive boat with dive locker including all the gear.

The vessel is not a "Pelorus", but presents the fit and finish of the shadow boats that you have seen featured here in the Forums.

The vessel would be available for 4 months in Mexico and 4 months in the Pacific Northwest/Alaska with the other 4 months for crew rest and maintenance. Perhaps, Caribbean and New England; or Mediteranean and Red Sea?

This is all still very conceptual, but applies specifically to fractional ownership in order to gain all the joy of being on the water without all the hassles of ownership and at a fraction of the cost.

I look forward to your comments and ideas towards further discussion.

Regards to all.

Stan

I believe it can work

- on a new vessel, to be sold after 5 years with resale price divided over the owners. Keep it longer and the maintenance debates get started.
- a very detailed agreement between the owners (times predetermined with swapping allowed; are owners allowed to charter out their times, etc.)
- it doesn't make sense to have two boats (one in the med, one in the caribbean), as each of them (and their crew) will be unused for half of the year. Ship it with dockwise or comparable.
- Have a few days to a week between each time-share period, so the crew can properly prepare the boat (and transfer it if needed).
- I don't think it makes sense to have this with more than 2-4 owners. People want to be on their boat at Christmas, Easter and in July. If you have 8-10 owners, they can wait years before they finally get their boat at the right time.
- central management deciding over crew issues, maintenance, even sailing area. The owners perhaps shouldn't even know each other. They should have the illusion that they are the only owner.
- for the design, I think a more "conservative" styling has more chance to succeed, unless you take a proven popular boat like a Wallypower for example. A Feadship F45 could be a good candidate, as it's likely to retain its value pretty well. Or a Heesen 3700 series or 4400 series.

and...

you need a good chef!

If owners know exactly when and where they will be able to use the boat and how much it will cost them (no hidden extra's), there could be a market for it.

But I agree with Lars that most clients in this class would prefer their own (smaller) boat, with their own paintings on the wall and their own private bed and bathroom. They wouldn't rent out their houses either, for exactly the same reasons.


Bruno