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Luxury yachts cost a ton to maintain. The average luxury yacht requires at least $1 million in maintenance spending each year. Yachts guzzle money at the speed of lightning, irrespective of whether or not they are being used. In fact, running expenses of an idle yacht can in some cases be higher than what would have been spent operating them.
Crew Salaries
The majority of staff on yachts are full-time employees, whether or not the yacht is moored or idle. The first and second officers, as well as cleaners and technicians, work for the yacht full-time, making at least $50,000 each, with some making as much as $200,000. Total annual salary costs can, as a result, be as high as $500,000, sometimes more for large yachts.
Fuel
Yachts, just like all other large vessels, use a lot of fuel. Depending on their size, they can use anything between 100 and 500 liters of fuel every hour. A 24-hour cruise can, as a result, use as much as $50,000 in fuel alone. Since the engines have to be fired up from time to time, fuel is always a permanent expense for yachts that can be significantly high.
Docking and Berthing
Yachts have to be docked at some point, preferably in a marina, away from commercial liners. Marinas charge hefty fees for each day a yacht is docked there. Most sought-after hot spots, such as Monaco, charge thousands of dollars per night for docking. Costs can run into hundreds of thousands per year. A home berth exclusive to a specific yacht is also equally expensive.
Maintenance and Repairs
Saltwater destroys almost everything that is put in it. Yachts are no exception. Corrosion of exposed surfaces is bound to take place, meaning replacements have to be done from time to time. Wear and tear also means components such as the engine, generators, and other electronics have to be repaired and replaced from time to time. Estimates show about 10% of the yacht's value is spent each year on maintenance. A yacht that costs $8 million will therefore need close to $800,000 in repairs annually.
Luxury and Entertainment
Numerous components meant to provide entertainment also have to be included in yachts. Things such as jet skis, dive gear, and amenities that can support luxury living need to be included.
Insurance
Insuring yachts is also costly due to the high risk associated with their operations. Premium can be higher than $100,000 per year.
Conclusion
A yacht is therefore not just any other fixed asset whose price is the only concern. Yachting is more of a lifestyle that requires millions of dollars each year. Unless you have tons of passive income, yachting is most likely not meant for you.
