[credit provider=”International Yacht Collection” url=”http://www.iyc.com/sales/145-Trinity-Lady-Linda”]
It’s clear that buying a luxury yacht costs a lot of money.Less obvious is just how much cash is required to keep a yacht running once it finds an owner.
In an interview about “Grand Ambition,” his book about private equity investor Doug Von Allmen and his luxury yacht “Lady Linda,” G. Bruce Knecht told the New York Times, “Operating and maintaining a yacht is at least 10 per cent of what the thing cost.”
So the owner of a $10 million yacht should expect to pay $1 million every year to keep it running.
Both Kim Kavin, the charter editor at Yachting magazine and editor of CharterWave.com, and Gianluca Fenucci, the founder and director of ISA Yachts, told Business Insider the 10 per cent estimate is pretty accurate.
That estimate is “quite in line and within the average for a standard operational use of a megayacht,” even when various conditions (like the yacht’s age) are taken into account, Fenucci said.
However, Nicolas Valin, the president of Neo Yachting, argued the rule of thumb “does NOT work…There are many aspects which interfere with the cost of operation of a yacht.”
While it may not be a perfect guideline, the 10 per cent figure puts into focus just what a luxury yacht is: a complex, floating machine that requires a crew, huge amounts of fuel, docking, and maintenance.
Kavin says that marina docking fees for a week at an event like the Monaco Grand Prix usually run in the six figures, and that fuel is commonly the biggest expense a yacht owner faces.
Then there are the people who must be paid to sail the yacht, keep it clean, and feed everyone on board. Annually, a good, experienced captain makes about $1,000 per foot of yacht, Kavin says. So the captain of a 150-foot yacht can put $150,000 in the bank every year.
Luxury Yacht Group provides salary guidelines that line up with that estimate: A Senior Master captain (10+ years of experience) can expect to make between $96,000 and $240,000 per year, for ships between 120 and 200 feet long.
At the low end of that range, that’s $800 per foot. At the high end, it comes out to $1,200 per foot.
Even for wealthy yacht owners, these huge, fixed costs can put a dent in the bank account. They are part of the reason Knecht’s book about the “Lady Linda” is a cautionary tale: Hurt by the 2008 crisis and overwhelmed by bills, Von Allmen was eventually forced to put his beloved, incredibly opulent yacht on sale last summer, for $50 million.