No one seems to need superyachts, yet they keep selling them

London

THE end of summer is a nervous time for superyacht designers, and not because they fear that the owners of their latest creations may be disappointed with the first outings in the Mediterranean.

The worry is about the designers' next vessels, because this is the time of year when clients whose boats are still in production come back from holidays with a wish list of new features - usually, based on what they saw on their friends' yachts or at the Monaco Yacht Show which ended on Sept 28.

"Right now we are quite far down the line in completing a big yacht in northern Europe for one client who has just spent time on a friend's boat, which is not necessarily helpful," said Dickie Bannenberg, the head of one of the world's best-known superyacht design houses, Bannenberg & Rowell. He was in his London studio, an airy two-storey space lined with sleek models of its creations.

"The delivery date is in the first half of next year, and that is sooner than it might seem," Mr Bannenberg said. "It's fine when it's superficial - let's say they liked the plates or towels on their friend's yacht - but if you're not careful it can verge on, 'Oh, my friend's gym was like this, can we have something similar?' or, 'I would really like to add a submersible vessel.' "

The complex production schedules of these vessels mean shipyards will resist significant changes. "Re-engineering or rebuilding is going to cost a lot of money," Mr Bannenberg, 58, said.

That end-of-summer tension illustrates some inescapable truths about life dealing in the world's most expensive consumer products and ultimate discretionary purchases. One vessel alone can cost US$5 million to US$500 million, with annual operating costs of perhaps 10 per cent of that.

This is an industry in which problems include protecting the owner's Picasso collection from salt air, clumsy crew members and faulty sprinklers.

Or maybe you have to decide whether to build one 330-foot vessel (100 metres) or join a trend of the past few years by opting for a "smaller" 200-foot yacht with a 165-foot support vessel to carry a submarine, helicopter, speedboats and other toys.

William Mathieson, the editorial and intelligence director of the Superyacht Group, the leading analyst of the industry, said there are about 3,500 active vessels in the world that meet the loose definition of a superyacht by measuring more than 100 feet.

Mr Bannenberg's father, Jon Bannenberg, who died in 2002, used to say that nobody in the world needs a superyacht, so it was the designer's task to make them want one. Mr Jon Bannenberg, a charismatic Australian, is widely credited with inventing the profession of superyacht designer. In the 1960s, he brought together interior and exterior design skills with an understanding of marine engineering to replace what had previously been relatively simple structures sitting on top of hulls designed by naval architects.

He had waves of clients, starting with Greek shipping tycoons in the 1960s. Then came Middle Eastern royals in the 1970s, German and American industrialists in the 1980s, tech titans from the United States in the 1990s and wealthy Russians.

After Mr Jon Bannenberg's death, Dickie, who had worked as his father's project manager for 15 years, brought in Simon Rowell, a hotel designer, as the studio's creative director.

A short walk from Wandsworth Bridge on the River Thames, the studio holds 15 people, who manipulate detailed computer images of planned vessels, pore over design drawings and phone Italy to order marble fittings. There are usually six or seven projects at various stages of a construction process that takes four to five years, and that often extends to designing stationery and a logo for crew uniforms, as well as commissioning sculptures to go on board. Mr Jon Bannenberg liked to design the cutlery and crockery, flower vases, the light fittings and door handles.

He ran his practice like a Renaissance artist, training a stream of apprentices who now run some of the world's top studios, and relying on wealthy patrons for commissions. Those patrons included J Paul Getty, Malcolm Forbes and Larry Ellison. Projects were discussed with Fidel Castro and the Shah of Iran that never made it to the water.

Almost inevitably, many people rich enough to spend tens or hundreds of millions of dollars on a yacht have proved to be controversial. Australian billionaire Alan Bond was a Bannenberg customer before being jailed for fraud, and so was Saudi arms dealer Adnan Khashoggi, who commissioned a 280-foot ship called Nabila. Donald Trump bought that one (and renamed it Trump Princess) in 1987 for a reported US$30 million, with a running cost of US$2.5 million a year, justifying the expenditure by saying it was "the ultimate toy" and that he hoped it would make other yacht owners feel inferior. A string of Bannenberg yachts were built for British businessman Gerald Ronson, who also did jail time for fraud, and American magnate Bennett LeBow was forced to repay millions of dollars to companies he controlled for loans that were spent on his yachts.

The body of Robert Maxwell, the publisher and fraudster, was found floating off the back of his Bannenberg yacht, the Lady Ghislaine, which was named after his daughter who is now in the headlines over her involvement with Jeffrey Epstein, the financier charged with child sex trafficking. Epstein, who died in jail in August, represented retail tycoon Leslie Wexner during the construction of his 300-foot yacht Limitless, another Jon Bannenberg project. "It's a tricky one," Mr Bannenberg said. "Legally in any industry you have a requirement to know as best you can the source of your client's money, so in our contracts our lawyers require us to find the beneficial owner behind the project."

"The shipyard asks the same questions," he said. "They won't just build for Mysterious Corporation of Grand Cayman; they need to know who is behind it." The ownership of some yachts is a tight secret, with the owner's passion for privacy and security often extending to teams of private guards in every port.

Mr Rowell, 50, said that "once or twice" the firm has made its own inquiries and decided to stay away from a potential client, but a lot of these problems, especially white-collar crime, "only become obvious with hindsight".

Research by the Superyacht Group shows that after peaking in 2008 and then slumping after the financial crisis, the production of luxury yachts has been stable in recent years, with an annual output close to 150 vessels.

While Americans remain the biggest buyers, the United States' own yacht output has shrunk, with the global industry consolidating into fewer shipyards. The Italians now make the most vessels, and Dutch and German builders dominate the top of the market.

The most striking change in the industry is a shift in what the boats are actually for, as a new generation of owners want to do more than show off while anchored off Sardinia.

"The clients that approach us nowadays don't really want a floating palace," Mr Rowell said. "They want a boat they are going to live on and even work on, and use for more than two weeks a year."

"Owners today do realise that these are extraordinary bits of equipment that can go to pretty exciting places that are really difficult to reach, and that changes the way you design the yacht," Mr Rowell said. Modern owners sail everywhere from the Northwest Passage to Antarctica.

There is "still a minority of attention seekers, status seekers, whatever you want to call them, who really are happy sitting off St Tropez and Cala di Volpe and the Amalfi Coast", Mr Bannenberg noted.

There is a movement, he said, "towards a much greater sense of connection between the yacht and the immediate sea, by which I mean swim platforms, 'beach clubs', folding terraces and hull doors that open up to the sea."

A growing sense of environmental issues is also having an impact, Mr Bannenberg said. "There are a few yacht-based movements and marine foundations, which are sometimes labelled as a yacht-owner's guilt trip, that are part of the whole environmental conversation going on at the moment," he added.

"It all adds up to a much bigger desire to actually interact with the ocean rather than sitting in a glitzy apartment that happens to be floating." NYTIMES