Yachts the ultimate Arab status symbol

When it comes to owning a superyacht - one of the ultimate status symbols in the Arab world - bigger is definitely better.

To make the superyacht grade, a luxury vessel must be at least 25 meters in length, and that benchmark is increasing with every newly built vessel. Thirty meters was at one time considered a big boat; now even 45 meters is seen as modest. As for the cost, think in terms of tens of millions of dollars. For starters.

Worldwide, the superyacht industry has grown more than 90 percent in the last decade. Exactly how much of that growth has come from the Middle East is impossible to say - both superyacht owners and sellers are notoriously discreet - but, since the oil boom of the 1970s, the region has unquestionably been driving industry expansion.

If you're serious about owning a superyacht, then the choices are nearly limitless. The 75 meter Katana, for instance, is currently for sale. Built for speed, with an 18,500 horsepower engine, the vessel can reach speeds of 32 knots, roughly 40 miles per hour. The Katana can accommodate 12 guests in its six staterooms, each designed in a very modern style. The price tag: $68 million.

A more modest option is the Renegade, priced at a mere $9.95 million. This 42 meter superyacht accommodates eight guests and an equal number of crew. The price includes a pair of small craft, a pair of jetskis, two folding bicycles and one inflatable inner tube, which seems the least one could expect for just under $10 million.

Superyachts are continuously evolving in both size and complexity. Modern versions are safer and more seaworthy than their predecessors, and may be built of steel, aluminum or fiberglass. As power and grace are traditionally associated with Rolls-Royce motor cars, so it is for super-yachts.

The vessel must exude a powerful, prestigious ride with stealthy quiet. Noise and vibration reduction on vessels is a battle won by superior design, high build quality and painstaking inspection to dampen any remaining noise and vibration.

Despite the high cost and custom-built nature of superyachts, there are still a few hundred constructed each year, with an estimated 2,500-plus registered worldwide. Patrick Phillips, director of Super-Yacht International, says the main yards and builders are Dutch, German, American and Italian, with Arab clients favoring Dutch yards. SuperYacht is a British-based consultancy providing sales, brokerage and chartering services to owners of yachts over 21 grade.

"Arab clients normally require speed and luxury at the lowest possible price," says Phillips. A super-yacht is an opportunity for a buyer to fulfill a wish list of desirables: Arab owners seek the equivalent facilities of a five-star hotel in a vessel that can move from place to place at very high speeds, he says.

Privacy and confidentiality are usually important to Arab owners, Phillips says. For reasons of confidentiality he cannot reveal owner names, but he adds that many of the largest and most luxurious yachts in the world are owned by Arabs.
One renowned superyacht in Arab hands is the 104 meter Lady Moura.

Owned by Mohammed al-Rashid of Saudi Arabia, the Lady Moura is reputed to have cost in excess of $100 million, carry a crew of 60 and incorporate features such as a beach resort complete with sand, a large pool with a retractable roof, a 23 meter dining table custom-made by Viscount Linley.

Prince Walid bin Talal has an 85 meter superyacht, which he bought from real- estate mogul Donald Trump. 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."