There are roughly 295,450 people with at least
$30 million. Such individuals, referred to as ultra-high
net worth, represent about 0.0037% of the human population, yet they hold about a third,
$35 trillion, of the world’s wealth. Therefore, it’s no wonder why a massive,
global industry exists, fully centered on supporting the nomadic lifestyles of the world’s
wealthiest 295 thousand. As with any socioeconomic class, ultra high
net worth individuals are more likely to socialize with other ultra high net worth individuals,
yet intriguingly, the number of people earning and spending similarly to you goes down as
your income goes up. Therefore, once you get to the top of the
income scale, the scarcity of people like you stretches your social networks out to
a global scale. Through the years, this led to the creation
of the informal but remarkably systematized so-called “Billionaire’s Social Calendar.” The year often starts on St Barts—the traditional
New Year’s Eve spot for the wealthiest few—then February might include the Superbowl, and
March skiing in Aspen or St Moritz. Spring starts with the Masters Golf Tournament
in Augusta, Georgia, while May includes the Cannes Film Festival and the conveniently
close Monaco Grand Prix. June’s highlight is the Henley Royal Rowing
Regatta in England, July’s is Wimbledon, August’s is the Venice Film Festival, while
September often includes a return to Monaco for its yacht show. October’s the Frieze London Art Fair, November
might include a trip down under for the Melbourne Cup, and finally, the last major event of
the year, before St Barts, of course, is Art Basel Miami Beach. These events are hardly about the events themselves—most
wealthy attendees to Monaco’s grand prix hardly care about the racing and its yacht
show is far more than a sales event for the vessels—but rather they serve as an exclusive
space made available only to wealthy people who want to socialize with other wealthy people. While few go to all, and each adapts the calendar
to their preferences, ultra-wealthy individuals have often expressed a feeling of obligation
to join the circuit in order to maintain their social standing. Such pressure may have motivated Jeff Bezos,
for example, to start his 2022 as he did— on a yacht off St Barts with his partner,
Lauren Sanchez. Thanks to publicly-available aircraft transponder
data, however, we’re able to see what he did with the rest of his January. Bezos’ pair of G650 jets are too large for
St Barts’ short runway, so they waited on neighboring Saint Martin while the billionaire
rang in the New Year. Then, on the 1st, N271DV took off for the
seven-hour flight to Los Angeles to drop Sanchez off, while the other, N758PB, flew the next
day to take Bezos directly home to Seattle. Over the next two weeks, both jets regularly
shuttled up and down the west coast between Seattle and Burbank, presumably to take Bezos
and Sanchez to visit each other. On January 13th, however, one of the jets
flew from Burbank to Maui while the other flew from Seattle and stopped briefly at LAX
before continuing on to Maui, presumably carrying Sanchez and Bezos respectively to the billionaire’s
new $78 million vacation home on the island, then each jet returned to the mainland four
days later. Bezos appeared to visit Sanchez again on the
23rd, then four days later flew directly to Washington DC—Bezos owns the biggest home
in the District; the largest newspaper in the city; and his company, Amazon, is constructing
its second headquarters across the river in Crystal City, Virginia—so he was likely
there for business. But finally, Bezos finished out the month
by flying back to Burbank, once again—and he did all of this while threading the needle
between highlights on the Billionaire’s social calendar, as just 11 days later he
flew down to LA for the Superbowl. Across January, Bezos’ lifestyle called
for his G650s to fly 29,000 miles or 46,000 kilometers in total, which is roughly equivalent
to flying between Seattle and Sydney four times. To fuel this extent of travel, his jets used
about 24,838 gallons or 94,022 liters of fuel, which could otherwise be used to propel the
largest passenger aircraft in the world, an A380, across the Atlantic from DC to London
with 500 passengers aboard. But Bezos’ travel is indicative of the way
that market analysts think ultra-luxury travel is heading. You see, two phenomena are crashing head on
into each other to throw the industry into turmoil. First, more people are getting wealthy than
ever, as money is becoming increasingly consolidated at the top, and second, merely wealthy people
are traveling less frequently than in years past, but spending more than ever. Data indicate that prior to COVID, Americans
spent an average of $4,871 on a trip to Greece, but now, it’s all the way up to $6,561. Airline executives have also jubilantly noted
that first and business class revenue is remarkably strong, despite the continued weakness of
the traditionally lucrative business-travel segment, mostly thanks to leisure travelers
opting to pay the premium for more luxurious travel at a greater rate than ever. In New York City, the ultra-luxury hotel market
is said to be booming, with all-time high prices and occupancy rates and new super-premium
properties opening faster than ever. Summer 2022 saw the opening of the highly-anticipated
Aman New York, with the cheapest room starting at $2,600 a night, but more regularly pricing
in the three or four thousands. Five years ago, the Aman’s sister property—the
Utah desert resort known as Amangiri—started at $1,400 a night, but these days, that’s
doubled to $2,800 a night, and even with dynamic pricing charging a hefty premium for the most
attractive dates, plenty of nights are regularly sold out, even many months in advance. And of course, for those lucky enough to get
a booking at resorts like the Amangiri, they need a way to get there so it’s no wonder
that 2021 saw an all-time record-high number of private jet flights—3.3 million globally. This tremendous growth was in large part enabled
by the propagation of the on-demand charter business model. Companies like Wheels Up, NetJets, and XO
have revolutionized the industry by simplifying one-off charters of private jets, which makes
the means of travel far more achievable for the twice-a-year wealthy leisure traveler. These private jets are serviced by fixed-based-operators,
which essentially act as private terminals-for-hire, and these are also observing record traffic,
leading to more FBOs being developed, which is pushing up prices for airport real-estate
and hangars to an all-time-high as well. So, as the industry has grown as large as
ever, it’s simultaneously more expensive than ever and more frustrating than ever to
get access to a private jet. Essentially, across the ultra-luxury travel
segment, there’s a capacity crunch. More people than ever are willing to pay more
for a night in a top hotel than most do for a month of rent; or more for a two-hour private
flight than most pay for their cars. The pace of industry growth is outmatched
by the growth in demand for the segment. The incredible consequence is that the super
wealthy have pushed the ultra-wealthy out from their traditional stomping grounds. There simply are not publicly-available travel
experiences expensive and exclusive enough for the wealthiest of the wealthiest anymore,
so they’re essentially turning to private everything. Yachts fulfill this need well—they allow
the ultra-rich to travel on their own terms, bringing the quality of accommodations they
expect to wherever they want to go, largely regardless of outside demand. But where they want to go is still largely
dictated by that Billionaire’s calendar, so each fall, as the temperatures in the Med
drop and the final summer events finish up, a maritime migration begins. Some of the superyachts push off the dock
with pared-down crews to begin the lengthy transatlantic passage under their own power,
and while most yachts are capable of taking on most ocean crossings, it’s an expensive,
impractical, and dangerous endeavor. That’s why these exist—yacht-carrying
ships. These ships work year-round connecting the
world’s yachting hotspots, but in the fall and spring, it’s all about the transatlantic
migration. So, at the end of the Med season, a deluge
of vessels descend on yachting hubs like Genoa, Italy and Palma de Mallorca, Spain to load
up on one of these vessels—their owners paying up to $100 thousand for the convenience. Upon arrival in the Caribbean, their owners
can once again access their yachts, providing convenient access to winter events like Art
Basel Miami and New Year’s on St Barts. As with every other segment of the industry,
however, the superyacht industry is growing faster than ever, meaning what was previously
a refuge from the constraints of land is finding itself increasingly stuck out at sea. Take, for instance, a berth at the Yacht Club
de Monaco. First and foremost, it’ll cost you. During the summer season, a night will cost
the shortest vessels $275; but if you’d like to dock the same boat during the Monaco
Grand Prix, the price skyrockets to over $16,500 a night. To get one of the few spots that can fit the
largest 60 or 70 meter vessels, it’ll cost $73,000 a night, but even then, the clubhouse
building blocks the view of the track, so to actually see the race, this fee includes
access for two to the building itself. But cost is hardly the issue here. Rather, it’s club membership, which requires
that you were first sponsored by a member then approved by the admissions committee. Once in, to secure a spot during the Med Season,
berth reservations have to be booked months in advance. But for the only event that parallels the
Grand Prix in exclusivity, the yacht show, just getting a berth is only half the battle. When showing your superyacht off to other
attendees, the best spot to dock is here, across the way, so onlookers can take in the
full profile of the vessel rather than just its rear. But getting these spots requires first that
the yacht is too long to fit in a traditional spot, and that you, or your captain, has a
strong relationship with the event directors—relationships that take years to form. Navigating these busy waters is an expensive
pain. Superyacht ownership in general is an expensive
pain. Yachts don't actually get someone from one
place to the next efficiently at all—on the open ocean they’re generally unpleasantly
bumpy rides—and yearly costs generally average around 10% of the boat’s value. Yet, across the board, no matter the length,
sales only continue to rise. Anecdotally, the deals cut on the decks of
these behemoth boats, and the valuable relationships curated at yacht club bars are said to make
the investment worth it. As one new yacht owner told the New Yorker
“one deal secured on board will pay it all back many times over.”So, increasingly,
the yacht is now perceived as a necessary component of the Billionaire’s social calendar,
meaning the same way the wealthiest few are feeling about private aviation and ultra-luxury
hotels now extends to the yachting world as well. In response, the ultrawealthy are getting
more creative. Over the past five years, just as overall
sales and superyacht builds have risen, the number of superyachts over 40 meters being
refitted has nearly doubled. More often than not, refitting means a visit
to a boat yard for minor alterations. Sometimes, though, these refits are major,
which reflects a growing trend: the rise of the expedition yacht. With traditional waters busier than ever and
the experiential economy as big as ever, billionaires are rebuilding and buying superyachts capable
of taking on more adventurous trips, be it sojourns into the Arctic or lengthy, remote
prowls across the Pacific. At the extreme end of this trend is a former
Soviet icebreaker now rebuilt as an equally tough and luxurious expedition yacht called
Legend. On the other, experiential yachting firms
have popped up that create World War II battle simulations in the Pacific for bored kids
or set up temporary restaurants on sandbars in the middle of the Maldives. The trend toward exploration and expedition
isn’t just a superyacht thing either. At the same time that increasingly numerous
millionaires are pushing the ultra wealthy away from their old stops, the interest in
and social value of unique experiences is pulling billionaires to services offering
one-of-a-kind adventures—from up-close gorilla safaris in Rwanda, to luxurious overland treks
to the south pole. These luxpeditions, as they’re called, are
individually curated by companies like Brown and Hudson to push their guests through Bear
Grylls-like experiences in frigid winter conditions before they escape to tents with heated floors
and Michelin star-worthy food waiting on them. Their goal is that the trip, in their words,
is seared into the participant’s memory. And if the extreme outdoors isn’t of interest,
Brown and Hudson offer the opportunity to travel like James Bond, to live a few days
like someone else entirely, or go off on a globe-trotting Grand Tour. For the ultra-wealthy, the options are really
endless. As long as it’s legal, said one representative
of a referral-only travel service, they’ll do anything for a client. Bespoke traveling for the billionaire class
is booming, and as long as the traveler gets a good story out of the experience or the
ability to brag about visiting the Salar Uyani salt desert in Bolivia or the most rural reaches
of Sudan before any of their friends, they’ll keep paying well into the hundreds of thousands
for it. But of course, the true top of the market
is what we don’t know about yet. Increasingly, wealthy people are traveling
to be seen—either in person or on social media. In response, ultra wealthy people are increasingly
traveling to disappear—as reflected in the record sales of secluded $30, $40, and $50
million vacation homes in places like Hawaii, Colorado, and the Caribbean. We don’t have a great sense of the ins and
outs of the most expensive travel experiences, because the secrecy is part of the premium
itself. By the time we do, the top of the wealth pyramid
will have moved onto something else—always staying one step ahead of the merely wealthy. If you want to learn more about the yachting
world, and specifically how builders are managing to design ever larger and more luxurious yachts,
I’d recommend checking out this episode of the show Ultimate Processes on Curiosity
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