High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
by Nikki Ekstein (Bloomberg) It takes a lot of good business to be able to afford a megayacht. But owning one is very, very bad business, according to Aaron Simpson, founder and group chairman of the members-only concierge service Quintessentially.
“It costs 10 percent of a yacht’s purchase price just to maintain that boat every year,” said the London-based entrepreneur. “If you spend 25 million pounds on the yacht itself, it’ll cost you another 2.5 million to run it—and to use it maybe three weeks of the year!”
So, then, why is he building the world’s biggest one?
“I had this thought back in 2007, when the world was all bling and everything was fantastic, that it would be so much easier for people to own an apartment on a megayacht than own the megayacht outright,” explained Simpson, recalling conversations with boat owners who bemoaned the expense of their lavish seafaring lifestyle.
Quintessentially, a company built on the principle of streamlining the lives of influential people around the globe, saw an opportunity. Its concierge team—which provides 24-hour support to members in 60 cities—is known to fulfill requests that range from hard-to-get restaurant and hotel reservations to having Madonna perform at a spectacular birthday party. (Memberships cost anywhere from $5,000 to $60,000 a year for varying levels of service; the highest tiers are invite-only and there are wait lists to join in several cities.)
At 45,000 tons and 220 meters (721 feet) long, the $304 million Quintessentially One will be 40 meters longer than the biggest yacht sailing the seas today, the $1 billion Azzam, which has been tied to an Emirati royal. The price tag is lower because Simpson didn’t feel the need to include things like a missile defense system and personal submarine. Instead, there’s a “James Bond-y” bi-level pool, an offshoot of London’s Wolseley restaurant, a helipad, a theater, and a beach club that’s staffed with Champagne-toting butlers.
If this sounds suspiciously like a small, tricked-out cruise ship, we thought so, too. What Simpson is creating isn’t structurally unlike a Ponant ship; the French company’s large yachts tend to have between 110 and 135 staterooms apiece. (For comparison’s sake, the smallest ship on a more traditional cruise liner such as Norwegian can hold almost 2,000 guests.)
But there’s one key distinction: Quintessentially One is meant to be about the impressive people on board; the vessel is just an equally impressive backdrop.
Simpson describes it as a TED conference on the seas, attended exclusively by influential professionals you’d want to rub elbows with—a floating hotel for VIPs that drops anchor outside culturally significant events and hosts the most interesting parties. “We wanted to create a boat that you want to get onto—not a boat that you want to get off when it docks,” Simpson said. He sees his ship as an end unto itself: It is the destination.
It’s worth noting that Simpson isn’t the only one with this idea; Summit at Sea is accepting applications for an intellectuals-only cruise-slash-think-tank in November. Compared with Summit, though, the Quintessentially One is a little less TED and a little more Soho House—and maybe that’s not a bad thing at all.
The Quintessentially One is currently scheduled for completion in time for the 2020 UEFA Euro soccer tournament—one of many global events that will inform the ship’s sailing circuit and further differentiate it from the traditional notion of cruising. (Other events will likely include Art Basel Miami Beach, New York Fashion Week, the Cannes Film Festival, and Carnival in Rio.)
“We want to be in the places at the right time rather than on classic routes that follow the sun,” said Simpson. “We’re going to where the party is at and where people want to mingle.”
Quintessentially One will be an invite-only affair, making it “the world’s largest floating private members club,” according to Simpson.
If you do get in, expect to spend about $18,000 for the privilege: That annual fee will buy you two nights on the boat at your choice event. (The expectation is that guests will board for three days, not three weeks, at a time—to attend events in single port cities rather than sailing between multiple destinations.) Additional nights will cost $2,000.
It’ll have eight to 12 permanent residences that get you access year-round—architectural plans are still being finalized, but they’re anticipated to sell for about 12 million pounds ($14.6 million) when they go on the market in the next few months. There will be additional staterooms for about 280 guests, plus 400 staff. Owners and more temporary guests are both subject to the same admission standards—ability to commit to a $3 million down payment notwithstanding.
“Quintessentially members obviously are within automatic right, but we’re not that prescriptive in terms of which members get on,” said Simpson, emphasizing a desire to create a diverse crowd on board. “I’m concerned about getting too many people from any one place.”
There will be a “smattering” of ultra-high-net-worth members, said Simpson, adding, “We want to engage with the world’s premium audience in terms of wealth but also the people who make [the world] exciting. Successful businesspeople, yes, but also artists and innovators. We want equal representation from different industries and different backgrounds. It should be as multinational as possible.”
Considering that a large number of Quintessentially’s members are bankers from New York and London, that demographic is likely to face high competition getting onto One. Sell yourself as an eccentric hobbyist with a résumé full of speaking engagements, however, and you’re right in line with the mission.
“We already have an extensive global network,” said Simpson, though the company was unwilling to share its total membership figures. “So the first boat will probably be taken up exclusively by our membership—with 5,000 members per boat.” (Simpson envisions a Quintessentially Two and Three down the line.)
Not a Quintessentially member? You have three options. You can apply to join the service before the committee meets to dole out yacht “subscriptions” in the third quarter of this year. If your city is all tapped out, you can theoretically move to (or buy) a Quintessentially-affiliated estate or apartment, which gives you a sort-of backdoor into membership.
Or—probably the most realistic strategy—make friends with those who are already Quintessentially members. Once Simpson assigns a committee to vet nonmembers for access to One, they’ll be working on a referral basis and looking for “the great and the good who can get together and discuss the key issues of the day.” And party in an underwater nightclub, too, apparently.
“We want people who want to be a part of something,” said Simpson. “It’s easy to create a beautiful ship. We’re looking to create an offshore Davos here.”
©2017 Bloomberg News
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