The YOLO effect
Despite lockdowns and slowdowns, the super-luxury market is enjoying boom times — and nowhere is this more evident than in the wardrobes, garages and marinas of the one per cent. Words James Jennings
A swathe of businesses may have been forced to close during the lockdown years, but one thing remained open to a surprising degree: the wallets of the wealthy, as they home-shopped for super-luxury goods — including private jets and million-dollar cars — at an unprecedented rate. It’s being called the “YOLO effect” (or You Only Live Once spending) and it reflects the fact that many feel there’s no point putting off their dream purchases in the face of perpetual uncertainty. (Of course, it’s also a side effect of people having been unable to splash money on expensive holidays.) The global luxury industry grew by 15 per cent in 2021, accounting for a staggering $1.71 trillion in sales. Luxury brands across the board reported record numbers during the pandemic; Louis Vuitton, Dior and Prada saw sales not only increase since 2020, but outpace pre-pandemic growth rates.
This surge in live-in-the-moment sales extends to luxury cars (think Ferrari, Maybach and Rolls-Royce) and even private jets (which can range in price from $4 million to $130 million and beyond). Former motorcycle racing world champion and Aussie hero Mick Doohan knows a thing or two about the latter, as he now sources new and pre-owned jets for buyers through his company, Jetcraft, which has seen a huge increase in business.
“The effect of the pandemic has been the opposite of what you’d think, because it’s been quite positive and demand for private aircraft is through the roof,” says Doohan. “The waiting time for some new jets is now out to 24 months, there’s just so much demand. And the price of some of our pre-owned jets has doubled in just the past 10 months.” He notes that jet manufacturers’ lead times have been “pushed out, allowing them to increase their asking prices for the first time since the GFC [global financial crisis]. “It’s a really interesting station for every asset class and it will be interesting to see how it plays out,” he continues. “Hopefully this demand situation will continue for a while.” There’s no doubt that in a world in which we’ve all come to fear infection from strangers, being able to fly on your own jet is more appealing than ever to well-heeled travellers.
The automobile industry has been rocked by supply chain issues and component shortages, creating wait times for new cars that can stretch as long as two years. For one brand, however, waiting years for your dream car, which you’ve specified down to the last detail, is nothing new. That’s been standard for Ferrari customers in Australia for some time, according to the company’s Australasian president, Jan Hendrik Voss. “Waiting is involved and buyers don’t mind that,” says Voss. “You can liken this to Christmas or your birthday — it’s so much more special because you’ve waited for it. [Customers] are comfortable with the deposit and the wait time because they know something extraordinary is coming their way.”
Ferrari Australasia accumulated a record-breaking number of orders during the pandemic for vehicles that cost well over half a million dollars, with the entire local allocation of the recently launched V12-powered supercar the 812 Competizione — priced at $1,035,768 — already sold out. “With Covid, to me, it’s been three things: one is you have had no chance to spend your money travelling around the world, so people are choosing to spend their money on other things,” says Voss. “And then also people see other people dying in the community of Covid, and people experiencing hardships, and they think, ‘Life is short’, so they don’t want to push their passion purchases out any more, they want to live those dreams now. “Thirdly, I think what it comes down to, as a phenomenon of what we’ve lived through the past few years, is that people want to buy things that have meaning to them, and Ferrari provides meaning to them,” continues Voss. “There’s been a rethink of where and how people spend their money: ‘Yes, I still want all the day-to-day things, but I want to add meaningful purchases to my portfolio as well.’”
The Mercedes-Benz-owned luxury marque Maybach has also reported selling more vehicles — some of which are priced as high as $500,000 — in Australia in 2021 than in the five years prior combined. Rolls-Royce, one of the world’s most expensive marques, delivered 5,586 cars globally in 2021, an increase of a whopping 49 per cent year-on-year.
Its chief executive, Torsten Müller-Ötvös, acknowledged this is “unprecedented”. The Rolls-Royce Phantom retails for about $1 million (certainly more once personalised options are added), with a new version set to be revealed shortly, and that price has not deterred customers. “We have seen growth in all markets worldwide,” Müller-Ötvös told Bloomberg TV. “For the very first time in my 10 years here, I have seen not a single market fading. Every market is very strong and going. It’s unbelievable.”
With the luxury car market making $830 billion in 2021, luxury yachts generating $33 billion and the global luxury-goods market predicted to continue its amazing growth, the trend of treating yourself sooner rather than later looks to be here to stay. Because you only live once.
This is an extract from an article that appears in print in our fifth edition, Page 104 of Winning Magazine with the headline: “The YOLO effect”. Subscribe to Winning Magazine today.