The Super Yacht Industry in the Wake of the 2017 Hurricane Season
The author John ‘Mac’ McDonald, Owner of Mega Yacht Services, originally hails from Newport, Rhode Island. He spent his early years sailing lasers, 420s and 470s which initiated a life long passion for sailing and the ocean/water sports. A career in finance pulled him away from the water for an extended period and he spent 18 years working on the Chicago and New York options exchanges. It was during this time that his burgeoning interest in food and wine led him to start exploring investment opportunities in this sector. In 2015 he took the plunge and purchased Mega Yacht Services, a business established in St. Maarten 16 years previously. His business acumen and experience on Wall Street provides him with a unique understanding of what high net worth individuals want and expect from a service provider in this market. Mega Yacht Services is now entering a new chapter as John drives the company’s expansion into Europe.
As St. Maarten recovers from the worst storm we have faced in over 100 years, it gives me a little time to reflect on the super yacht industry and its past, present and future. Formerly dominated by sheikhs and tsars and Russian oligarchs, we are starting to see a more diverse mix of people getting involved in the Super Yacht and Private Jet world. A new class of 30-something American tech millionaires are entering the market for the first time with 54 meter motor yachts, along with new purpose-built expedition boats running the Northwest Passage and heading to Antarctica. Along with new destinations, they’re bringing with them a change in the quality and type of the experience they expect. No longer are caviar and champagne nights on the yacht at anchor or at the dock the standard experience. These super yachts are starting to get used as designed, moving frequently between ports with support crew moving along with the yacht, while private jets are tasked with dropping guests and owners at one port and picking them up elsewhere at the end of the week. It’s a dynamic time in the luxury travel industry and I am looking forward to what is to come as the mentality incorporates more mobility, and as new ports open up, which means new opportunities.
This trend towards seeking out new experiences has led to more super yachts towing ‘tenders’ (28’ to 40’ center consoles and even 35’ sport fishers) this season than ever in the past. They allow guests quick, dry access to more remote spots while aboard, or spots where the water is too shallow for the yacht. On one trip through the Northwest Passage, the towed tender was the thing that made the trip for the bosses and guests, giving them closer approaches to icebergs and creating life-changing memories like seeing narwhals and other sea life surfacing next to the boat. As that owner and many others make plans for their next big trips, the towed tender will be a big part of the equation.
Along with new experiences come new challenges. These new must-see destinations include locations that are not accessible by general aviation for transfers. This has really opened the door for private jet charter companies to step up and offer destinations that are not easy to get to directly from normal aviation options. As the yacht industry becomes more dynamic, transportation options have to follow suit. Clients who might have previously settled for a small commercial flight are now landing at private terminals, being shuttled to the yacht via helicopter and then returning the same way, and discovering that they prefer it, for security and privacy as well as convenience.
It is an exciting time to be in this industry. As far as purchases, we are seeing a smaller inventory in what is for sale in the 150’ to 170’ range; boats are moving and people are stepping up in size as vacations become more bespoke and charter guests make the move to become owners. As mobile access and working from home or remote becomes more commonplace, I expect to see more people using their yachts as an intrinsic part of their lifestyle rather than just for vacations and short breaks away from the norm.