Set sail for a spot of fun

Luxury yachts are promoting fractional ownership for first-time buyers.

I n London, the city of big bonuses (this was somewhat before the sub-prime crisis), there is this saying that there are the-haves-and-the-have-yachts.

India hasn't reached that stage yet. Though there are many whose net worth is worth salivating over, they are yet to progress to the "have-yacht" status.

But all that is likely to change soon with a handful of yacht distributors trying to get Indians to buy yachts by introducing the concept of fractional ownership. It is probably the best way to have a billionaire lifestyle without having to spend like one.

Says Vishal Chaudhry, director, Aquamarine Leisure, which is bringing in Princess yachts into the country, "We are pushing fractional ownership in India so that people come out and enjoy the experience of sailing."

Agrees Aashim Mongia, owner, West Coast Marine, whose company has already sold three fractional ownership yachts, "The Indian market is an emerging one and people here are still not willing to spend money."

There is some serious money at stake here. Boats available in the Indian market can range approximately in the price bracket of Rs 7 crore and go up to Rs 29 crore. Add to this the cost of upkeep which is approximately 10 per cent of the boat's sticker price with the fuel cost which is over and above this. A lot more than what it takes to buy those Mercs and BMWs.

When a boat is brought as part of a fractional ownership programme, each owner can get up to 45 days to about four weeks per year, depending on how many people share the yacht. Chaudhry's company is offering a plan where as many as 10 people can own one boat.

Says Chaudhry, "Owning a boat isn't about the cost of the boat but about enjoying the sea." Quite true. More than big cars, or fancy addresses, yachts are inextricably linked with the high life and good living. Inviting someone for a meal, or a holiday, on your personal yacht has a ring of serious money that few others luxury items can match.

The concept of fractional ownership originated in the US about 20 years ago. It is believed that initially this idea was applied for ownership of aircraft. From then to now, fractional ownership is being applied to almost everything including pets.

On its website, fractionallife.com says, "Using Fractional Life you can decide, for instance, to cost effectively own a 1/4 share in an exotic holiday home abroad, have access to your favourite yacht eight weeks a year, spend a selection of days behind the wheel of some of the most desirable cars in the world, have the latest handbag on your shoulder and even own a part-share in a nightclub!"

Apart from the high cost of owning a boat, India also does not have a sailing culture, in no small measure hampered by a complete lack of infrastructure. Says Chaudhry, "This industry won't grow as quickly as it can as there is no infrastructure in place yet."

There is talk of a marina being developed in Kochi, but apart from that not much is known about how many marinas are in the pipeline. Says Chaudhury, "If the access isn't good then the process of ownership isn't as enjoyable."

While this may slow the growth of this luxury market, those promoting yachts aren't losing hope. Says Mongia, "This year there has been 100 per cent growth in this business."

Interestingly, it's not just individuals who are looking to buy yachts. Chaudhry's company has had enquiries from corporates as well as hotels. He says, "Right now, there are no sub-categories in this market. It is all one market right now since it is at a fledgling stage."

India's economic ascent means that there are more millionaires than ever before. And if there are surplus millions around the place, then it is safe to assume that there is a need to spend them.

Nobody really needs a yacht but India, like other emerging economies, is finding its appetite for the high life. Set sail, this coming winter season, for a spot of fun and frolic. Fractional price, full fun. Now that's a return on investment that no hard-nosed businessman can refuse.

Thorstein Veblen in his book, The Theory of the Leisure Class, says that spending on expensive things that are not absolutely necessary is "evidence of wealth".

He goes on to say in the book that the "failure to consume in due quantity and quality becomes a mark of inferiority and demerit". Take a cue from that, all you millionaires and billionaires, and spend that wealth on a yacht.