Yachts the ultimate Arab status symbol (page 2 of 2)

The prince renamed the vessel Kingdom 5KR, after his company, lucky number and the initials of his daughter and wife.

Gulf Craft, one of the region's top yachtmakers, builds a variety of vessels, including yachts up to 38 meters. The company was founded in the UAE in 1982, and is based in Ajman.

"We have grown into a 300-employee company, expanded our operations to two factories in the UAE, opened a third factory in the Maldives and consolidated our network of distributors to include 40 points of sales in 30 countries," says Mohammed bin Hussein Al Shaali, chairman of Gulf Craft.

The company has a production capacity of more than 200 vessels per year, with boats which are marketed to 40 countries worldwide, through dealers in 30 international locations. Gulf Craft said that exports account for 70 percent of its sales. In 2001 the company launched Millennium 118, a 35-meter superyacht with a range of 3,000 nautical miles.

Becoming a superyacht owner is, at a minimum, a major hobby; at most, it's a different way of life with the latest maritime communications technology making an office at sea quite viable. According to associates, bin Talal sometimes runs his business affairs from the Kingdom 5KR.

Phillips says superyachts serve various functions for Arab clients, including prestige, family, corporate and personal use - and usually in that order. He adds that Arab owners do not usually make their vessels available for charter hire. If they did, you would expect to pay around $10,000 per day.

One interesting new ownership scheme, called the Whistlejack Project, offers a novel version of timesharing: 12 different owners have jointly invested $685,000 to build a 130 meter superyacht.

Each investor will own the yacht for one month a year, for the lifetime of the vessel.
Big investments. Given the complexity of modern yachts and the high level of investment, procuring one requires a major commitment. Some yards may build or part-build a vessel and then seek to market it. However, most are built to order, for charter hire or private ownership.

With vessels costing millions of dollars, owners are entitled to substantial involvement in the design and construction of their yacht. Shipyards increasingly show flexibility with changed orders, for instance, if a client wants to enlarge a stateroom. This inevitably lengthens the construction period - and adds to the cost.

Interior styling is also critical. Some clients opt for a classic interior design that is likely to age better, while others may choose more contemporary designs. In the last few years contemporary preferences are for light-colored wood fittings and modern-style hardware.

Further consideration needs to be given to the crew. Besides accommodation and facilities onboard for the owner and his guests, a yacht also needs crew accommodation. Annual running costs, including crew and maintenance, are substantial, by some estimates from 10-15 percent of the yacht's value.

"There are yachts being built for hundreds of millions of dollars, and I think we have not hit the ceiling yet" says Mike Kelsey, of Palmer Johnson yachtmakers in Fort Lauderdale, Florida. "Although I will say that there comes a point when a yacht is no longer a yacht. It is, most certainly, a ship."