Croatia - International Special Reports

Mega-Yachts: the biggest status symbols in the world

Croatia Airlines:
Creating a national identity during war and peace

Mega-Yachts: the biggest status symbols in the world
Croatian shipbuilding tradition highly valued in crafting of yachts

Not too long ago, when it was still a part of the Yugoslav Federation, Croatia was the largest shipbuilder in the world in terms of raw tonnage. It still ranks as the sixth largest in the world and second largest in Europe.

Yet there is another aspect to Croatian shipbuilding, ill suited for such dull terms as raw tonnage. Some of the finest yachts in the world are produced here. One company, Heliyachts International, headquartered in the ancient Istrian Peninsula town of Pula, has made a specialty out of building so-called mega-yachts.

German born Michael Ahrens of Heliyachts defines mega-yacht, or super-yacht as anything over 100 feet in length.

"We are just starting to acquire US market share," says Ahrens, speculating that because the overall concept of where Croatia is located may not be as well developed as it should be in the United States. In time, however, Heliyachts can expect to make in the neighborhood of forty percent of their sales to customers in the US.

"Right now in the mega-yacht market Larry Ellison, of Oracle, is one of the more prominent US customers," says Ahrens. "He already has two yachts that he bought second hand and refitted, and as far as I know he is in for a new order on a yacht larger than a 100 meters. Paul Allen, of Microsoft, is the other famous yacht owner. He owns a 62 -meter yacht right now and he will go for a bigger one which is on order already."

Not all luxury yacht owners buy the ships exclusively for their own use. "I would say that we have fifty to sixty percent of the owners who charter out their yachts," says Ahrens. According to Ahrens many people have had their fill of cruise ships and are now looking for something different, offering more exclusivity.

Mega-yacht buyers are looking for something out of the ordinary as well. One of the hottest options available today actually comes out of tug- boat propulsion technology developed in the 1960s. Although expensive, this system combines the rudder and propulsion systems into one unit and offers three hundred sixty-degree steering. According to Ahrens this system is rather complicated to install and is expensive to maintain, but in terms of maneuverability, offers a high degree of control.

Ahrens says that mega-yacht owners, especially those with motorized craft, prefer to invest their money into things that are prudent. Those who purchase sailing yachts, however, "are a little more experimental." Ahrens speculates that they have somewhat of a different mentality, in part because there is more room for innovation.

"The sailing boat is more sporty," says Ahrens. "In today’s market they are looking for more in the way of hydraulics- huge refined systems of hydraulics for handling the sails. This has allowed us to build bigger sailing boats that are in need of fewer crew."

Croatia has a good know-how in ship building technology, partially out of its centuries-old tradition of building ships, the fact that there are many shipyards, and because the nation has a very good education system. The Brodarski Institute, located in Zagreb, is one of the premier shipbuilding schools in the world.

"There was also the local shipbuilding tradition for fishing boats and cargo ships from the old days along the Croatian coast," says Ahrens. "This represents today a high level of education in traditional shipbuilding craftsmanship, especially today in metal, and engineering skills used in naval architecture."

A one hundred and forty-foot custom- built yacht will cost about $15 million. Building such a ship requires "the integration of a wide know-how," says Ahrens. This includes "having highly trained technicians who are experts in every aspect of building a ship to understanding the psychology of the customer."

Yacht buyers tend to purchase their ships in much the same fashion that most people buy their first car or home- starting out small and working their way up. "It’s directly related to their success in business," says Ahrens.

"It is the biggest status symbol in the world. There is nothing better than a yacht for showing off in a place like Monaco. If you own a Gulf Stream airplane, or whatever, you can fly from point A to point B but you cannot show it! The yacht is the ultimate social gathering point and I think this is a great part of the excitement."