Superyacht Running Costs

Running costs

When it comes to enquiring about the running costs involved in keeping and maintaining a superyacht there are two standard answers.  The first is: “If you have to ask, then you cannot afford it.”  The second answer often delivered with an air of social one-upmanship is that: “It costs 10% the cost of the yachts original selling price when new.”

But according to Rupert Connor, CEO at the Luxury Yacht Group both answers are wrong 

So how much do superyachts cost to run?  Connor has the answers in the form of an online yacht running costs calculator. He explains “Our new yacht operating running costs calculator is now on its third major revision.”  He adds “This version took over a year to program and is way more detailed and versatile than those we have issued before.”

Explaining how it works Connor suggests: “We start with actual yacht expense data from our yacht management accountants and then generate formulas to extrapolate out the budget for a wide range of yachts. We have been providing accounting services to large yachts for the past 18 years.

The operating costs calculator is tuned for yachts from 24 to 200 metres. Over the years the Luxury Yacht Group have proved operating variables create the largest variances for yachts smaller than 35 metres feet and larger than 75 metres.

Take fuel costs for example. The budget calculator factors in the fuel burn for a range of engine sizes typically those seen installed on yachts by length. Dragging the green “fuel dockage” slider to the right increases the projected fuel burn rate and therefore the budget cost for fuel. The default position would be for a typical displacement fuel burn. Position the slider in the 60-80% range for fuel projections for planning hulls.

Other factors allow for running costs to be calculated that include such variants as keeping a yacht in perfect readiness and reducing costs while the yacht is on the market for sale.  Calculating the costs of shipping yachts across the Atlantic on board Sail on sail off ships versus crossing under the yachts own power are equally laid bare by the calculator 

So where did the 10% of purchase price figure come from?  Rupert Connor says; “We hate to hear when yacht owners were told by their broker to factor in 10% of the purchase price to operate the yacht. This over used saying is sadly right occasionally, particularly for newer yachts in the US$20-30 million range, but just because a broken watch tells the right time twice a day you shouldn’t rely upon it to tell the time.”  It is a well established fact that as yachts get older so their capital value decreases and their maintenance costs increase. “But,” says Connor There is no way that a fixed 10% of purchase cost rule can be true… if your broker told you this rule then you need a new yacht broker

So do the numbers work for every yacht?  Sadly no! Sailing yachts for example fall outside the scope of this great tool.  Rupert Conner explains: “We did not build this version with sailing yachts in mind. Early in our development of this version we decided to exclude sailing yachts as a few of the major cost drivers scale very differently for sailing yachts compared with motor yachts. For example: To calculate paint costs we reviewed the surface area of over 100 large yachts and created a formula for painted surface area to length. Sailing yachts just don’t scale in a consistent way.  Similarly crew numbers don’t scale in the same manner that they do for motor yachts.”

The good news is, if they can demonstrate there is sufficient demand, the Luxury Yacht Group may well build a sailing selector switch into a future version of this hugely impressive tool.