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Q&A: Oceanco on Gross Tonnage

2020-10-12

Q: Is it accurate to compare custom superyachts by price per GT?

Oceanco: It is impossible to compare prices for custom superyachts based on GT because of the variables in the main cost drivers. The GT price comparison is significantly influenced by any deviation from a “standard” which will impact the complexity and therefore the cost of the yacht.

In brief, each design has a different complexity, propulsion system, and level of outfitting and each shipyard has a different base specification. An analogy in the automobile world, would be that of comparing the price/GT of a Porsche Cayenne to that of a Ferrari Roma.

Q: What are the other factors that have to be considered in a comparative valuation?

Oceanco: The complexity of the exterior and interior design, the propulsion system, the number of automated openings in the hull and superstructure, including hatches, balconies, doors, the complexity and quality of the luxury interiors and the crew interiors.

Other important factors are delivery date and scope of inclusions and exclusions, quality and type of equipment, redundancy, sustainability, quality and finish of technical spaces, heights and volumes, noise and vibration levels — items such as these that are not visible in the GT ratio. Overall build quality is also a major factor. All of these factors need to be considered, especially for a new build.

Black Pearl

Q: Are the considerations different for semi-custom/series and pre-owned yachts?

Oceanco: Only when comparing apples and apples is the price/GT narrative applicable.  Otherwise you are trying to flatten a comparison of complex, non-trivial products that encompass thousands of hours of hard work by designers, engineers, and craftsmen into a simple division calculation. And naturally, the technical, design and performance risk on a full custom yacht is vastly different from the same factors in a series/ semi series production yacht.

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Q: Can the concept of Compensated Gross Tonnage be adapted to compare superyachts?

Oceanco: The Compensated Gross Tonnage (CGT) number is only valid to compare yachts with other vessels such as cruise ships, not to compare different types of yachts. The Compensated Gross Tonnage number was created to assess output volumes of different shipbuilding industries on a fairer basis. Rather than only looking at annual GT built per segment, a new formula accounts for the hours of work utilised to produce a specific vessel. The man-hours required for building a superyacht will vary from shipyard to shipyard. Moreover, it could be demonstrated easily that in countries where more hours will be required to build a vessel, the final cost due to different hourly rates will be lower. CGT does not make a lot of sense in the superyacht context.

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