{"id":5268,"date":"2016-02-24T08:17:12","date_gmt":"2016-02-24T12:17:12","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=5268"},"modified":"2016-02-24T08:34:09","modified_gmt":"2016-02-24T12:34:09","slug":"the-sharing-economy-goes-upscale","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=5268","title":{"rendered":"The Sharing Economy Goes Upscale"},"content":{"rendered":"

\"the-new-york-times<\/a>Owning an island is the quintessential \u201cI\u2019ve arrived\u201d declaration, but many among the well-heeled are arriving through an alternate route: They\u2019re renting.<\/p>\n

Farhad Vladi, president of Vladi Private Islands,<\/a> a brokerage firm, has rented Fr\u00e9gate Island in Seychelles to Bill Gates, the co-founder of Microsoft, for $150,000 a week, he said. And Paul McCartney rented Cousine Island<\/a>, also in Seychelles, for around 5,500 euros or $6,000 a night from Mr. Vladi.<\/p>\n

Ownership does not have the cachet it once commanded, and renting is shedding its d\u00e9class\u00e9 image. Even among the very wealthy who could easily afford to buy an island, renting simply makes more sense.<\/p>\n

And not just renting property. In other luxury categories, including exotic automobiles, designer frocks, private jets, flashy diamond jewelry, spacious villas and sleek yachts, the well-to-do are taking a cue from the broader shift to a sharing economy, epitomized by the ride-hailing service Uber, city bike programs and the peer-to-peer sharing of many goods and services.<\/p>\n

Consumers are finding more satisfaction and status in experiences, rather than material possessions, according to a 2015 survey <\/a>on the sharing economy by PricewaterhouseCoopers.<\/p>\n

Read article: The New York Times<\/a><\/strong><\/p>\n

\u201cIn recent years, we\u2019ve seen a shift to a sharing versus owning mentality,\u201d said Cathy Ross, chief executive of Exclusive Resorts<\/a>, a collection of 300 privately managed luxury properties around the world that is open to members.<\/p>\n

\u201cAffluent individuals are now recognizing the benefits of renting, as opposed to owning,\u201d she said, \u201cand are more open than ever to renting luxury vacation homes when they travel.\u201d<\/p>\n

Mr. Vladi suggested another motivation: \u201cIf you own a property, you have to pay taxes, insurance, and manage the property. We can see it. There is a change in the market. They rent and have fun for two weeks, and then they go.\u201d<\/p>\n

Besides a budding enthusiasm for a more uncluttered lifestyle, patrons say these sharing-based services offer more convenience and choices.<\/p>\n

\u201cWhile some of our clients have owned yachts in the past, the allure of charter is that they have the freedom to choose any charter destination, anywhere in the world, selecting from a choice of different yachts,\u201d said Jeni Tidmarsh, director of Luxury Charter Group<\/a>, a global company specializing in luxury yacht charters. \u201cIt\u2019s a no-strings relationship.\u201d<\/p>\n

Here are six luxury categories in which the rich are opting to rent.<\/p>\n

Vacation Homes and Islands<\/h4>\n
\"14LEASE3-articleLarge\"<\/a>
Bill Gates, the Microsoft co-founder, rented Fr\u00e9gate Island in the Indian Ocean nation of Seychelles for $150,000 a week. Credit Vladi Private Islands<\/figcaption><\/figure>\n

Many of the world\u2019s better-off choose to rent their vacation homes instead of buying for a range of reasons, including a desire to avoid burdens like maintenance and homeowner association, or HOA, fees.<\/p>\n

That is why Geoff Tracy, a Washington restaurateur, bought into Exclusive Resorts with his wife, Norah O\u2019Donnell, anchor of \u201cCBS This Morning.\u201d It is \u201clike owning exquisite vacation homes all over the world without having the responsibility or the headaches that come with homeownership,\u201d he said. The starter plan costs $45,000 for 20 days over two years.<\/p>\n

\u201cWealthy folks are willing to pay a premium to rent places they want for only the time they want them,\u201d said Kathleen Peddicord, the founder of the Live and Invest Overseas <\/a>publishing group.<\/p>\n

\u201cI have a friend who owned a place in the Cayman Islands for years, but he got worn down with HOA fees, hurricane insurance, maintenance upkeep, etc.,\u201d Ms. Peddicord said. \u201cNow he goes to the Caymans for the month of February every year. He pays ridiculous rent for a penthouse at a Ritz-Carlton community. But when the month is over, he simply leaves and has no worries the rest of the year and no carrying costs.\u201d<\/p>\n

Then too, there are tax considerations. \u201cAnother reason not to own property can have to do with residency and taxes,\u201d Ms. Peddicord said. For \u201csomeone who has citizenship in a country where the tax system is based on residency\u201d \u2014 as it is in most European countries \u2014 \u201cit can make sense to rent to avoid becoming a tax resident.\u201d<\/p>\n

For those afraid of commitment, renting adds flexibility. You can enjoy one place, then move on. \u201cAlthough the St. Barth real estate market is hot right now, we see many of the uber-wealthy, including celebrities, continuing to rent on the island,\u201d said Peg Walsh, founder of St. Barth Properties.<\/a><\/p>\n

\u201cRenting vacation homes in St. Barth,\u201d she said, \u201cfits with their globe-trotting lifestyle and provides them with the flexibility needed for their superbusy schedules.\u201d<\/p>\n

Villas in St. Barth that would catch these renters\u2019 eyes include the six-bedroom Villa Oasis de Salines,<\/a> which includes two one-bedroom guest pavilions in the garden and rents for around $100,000 a week during peak season. The seven-bedroom glass-enclosed Villa Athena <\/a>goes for $49,000 a week for 14 occupants, and the five-bedroom Villa Fleur de Sel<\/a> is $50,000 a week for 10 people.<\/p>\n

Rates for renting Musha Cay in the Bahamas, the 700-acre private island of the magician David Copperfield, start at $39,000 a night for a four-night minimum for up to 12 people (it can accommodate 24).<\/p>\n

Private Jets<\/strong><\/p>\n

\"14LEASE-JET-articleLarge\"<\/a>
Bloom Business Jets sells fractional shares of jets that can be used in hourly increments. Credit Bloom Business Jets<\/figcaption><\/figure>\n

While cheaper than buying, flying a chartered jet will still cost you. Bloom Business Jets<\/a> offers rates from $1,100 an hour to more than $7,800 an hour, depending on the type of jet, the miles traveled and the number of passengers.<\/p>\n

Pentastar Aviation charters range from about $2,000 to $9,000 per flight hour, depending on the type of aircraft and operational requirements.<\/p>\n

Wealthy travelers also are buying fractional shares of jets and use in hourly increments from Bloom Business Jets, and others like NetJets, Flexjet, Sentient Jet and Wheels Up.<\/p>\n

A 25-hour jet card from Bloom Business Jets, for instance, allows purchase of individual flights on demand and permits selection of the specific jet type for each flight. Jet card rates range from $128,100 to $249,750, depending on the size of the jet.<\/p>\n

\u201cA lot of people don\u2019t want to own their own plane because it\u2019s a big undertaking,\u201d said Steven W. Bloom, chief executive of Bloom Business Jets, whose charter business grew around 10 percent in the last year.<\/p>\n

\u201cThe transaction process alone is complicated,\u201d Mr. Bloom said. \u201cIf you don\u2019t have more than 200 hours a year usage, a lot of people choose to charter. It is all about usage. Once you get to a certain level you might as well just own your plane because it is cheaper.\u201d<\/p>\n

But for most people, chartering\u2019s benefits are clear, he said. \u201cThe convenience and time savings, you don\u2019t have a big capital outlay, you don\u2019t have to manage the plane and the crew, and you just make one call and someone shows up with an airplane.\u201d<\/p>\n

The disadvantages of chartering are that the plane is usually different every time, and its condition may vary.<\/p>\n

Yachts<\/strong>
\nMany wealthy people \u201cdon\u2019t want the hassles of owning a yacht,\u201d said Ms. Tidmarsh of Luxury Charter Group.<\/p>\n

\u201cThey\u2019ve done the figures and realize they can charter the latest and greatest superyacht for a completely unique vacation, personalized for them, with none of the ongoing expenses of ownership,\u201d she said. \u201cIt\u2019s walk-on, walk-off convenience. There are no maintenance logistics or crew to manage, no cleaning, no paperwork and no ongoing invoices and expenses for berthing and upgrades.\u201d<\/p>\n

Luxury Charter Group offers vacation charters on board yachts like the 103-foot Diamond Girl,<\/a> available for charter out of St. Thomas in the United States Virgin Islands in the winter and Florida or the Bahamas this summer. The cost is $47,000 to $52,000 a week, and taxes and expenses like food, fuel and gratuities for the crew, which can add 20 to 30 percent or more to the bill depending on the destination.<\/p>\n

The 157-foot Cocktails<\/a>, with five staterooms, can be rented starting at the 2016 special offer rate of $150,000 per week in the low season to $225,000 per week during Christmas and New Year, and taxes and expenses. The 286-foot Nero <\/a>has six cabins, which accommodate up to 12 charter guests, and 20 crew members for a weekly rate of $420,000 to around $460,000 per week, depending on the location.<\/p>\n

In the British Virgin Islands, Virgin Traders<\/a> rents an eight-guest 73-foot motor yacht for around $29,500 a week. The Moorings<\/a> rents a 57-foot crewed catamaran yacht with six cabins in Tortola starting at $20,230 to $53,200, yacht only.<\/p>\n

An upside to chartering is that experts estimate it might easily cost $1 million annually to keep a $10 million mega-yacht running. Even for well-to-do yacht owners, fixed costs for fuel and paying a captain and crew, on top of docking fees and maintenance, can be formidable.<\/p>\n

Luxury Cars<\/strong><\/p>\n

\"14LEASE5-master315-v3\"<\/a>
A Corvette Stingray convertible rents for about $300 a day. Credit Enterprise<\/figcaption><\/figure>\n

David Spencer, 38, splits his time between New York and Los Angeles for his business, Talent Resources. Although he owns a 2015 BMW 750, when he is in California he prefers to rent a black Cadillac Escalade for up to three months at a time, at around $2,500 to $3,200 a month. He does that through the Exotic Car Collection of Enterprise,<\/a> the rental car company.<\/p>\n

\u201cThey know my preferences,\u201d Mr. Spencer said. \u201cWhen I get off the five-hour plane in L.A., I like it to be streamlined. I don\u2019t have to deal with insuring, storing and maintaining the car.\u201d<\/p>\n

Rates for Enterprise\u2019s luxury vehicles vary depending on make, model and market. For example, in Los Angeles, a Mercedes S-Class is available for $350 a day. In San Francisco, a Porsche Panamera is available for $400 a day and a Maserati Ghibli for $700 a day. In San Francisco, a Lamborghini Hurac\u00e1n is $2,400 a day.<\/p>\n

Hertz also offers luxury rentals, via Hertz Dream Cars<\/a>. A Porsche Boxster at Hertz is available for $300 daily rented at Palm Beach International Airport.<\/p>\n

Luxury-car rentals are growing rapidly. Enterprise has expanded its Exotic Car Collection to 31 locations in the United States and Canada, recently adding two locations in Houston and one in Washington.<\/p>\n

\u201cThis rapid growth is evidence of the strong demand we continue to see for luxury rentals,\u201d said Brice Adamson, the senior vice president at Enterprise who oversees the Exotic Car Collection.<\/p>\n

Affluent customers who own similar luxury vehicles that are in the shop for repairs are behind some of the demand, Mr. Adamson said. Other renters include those who are shopping for new high-end autos and want to rent for a few days to get a feel for the ride.<\/p>\n

Jewelry and Watches<\/strong><\/p>\n

\"14LEASE1-master180\"<\/a>
A $142,500 pair of platinum emerald and diamond earrings can be rented at $2,180 a week. Credit Haute Vault<\/figcaption><\/figure>\n

Rental services like Haute Vault,<\/a> which was started in 2014, will lend high-end jewelry. After qualifying for membership, Haute Vault members can rent pieces worth up to $150,000 by paying an annual membership fee of $350 to $500. (As with many luxury rentals in any category, insurance against loss, damage or theft typically is factored into the deal somewhere.)<\/p>\n

A Millefleur diamond cuff bracelet that retails for $137,500 rents for $2,335 a week. A $79,650 pink diamond cluster pair of earrings are $1,950 a week. And a men\u2019s Patek Philippe Annual Calendar watch that retails for around $51,500 goes for a weekly rate of $785. Three membership levels allow rental of items retailing for $10,000 to $150,000. Other rental services include Rocksbox, Adorn and Borrowed Bling.<\/p>\n

Designer Clothes<\/strong><\/p>\n

Rent the Runway<\/a>, founded in 2009, has more than five million users and last year rented more than $1 billion in retail value of dresses alone. The service lets women rent designer clothing (mainly dresses) and accessories, rather than own.<\/p>\n

The company has raised $126 million in venture capital funding from investors that include Bain Capital Ventures, Highland Capital Partners and Advance Publications, the parent company of Cond\u00e9 Nast.<\/p>\n

After six years of steady expansion online, Rent the Runway has opened retail stores in New York, Chicago, Washington and Las Vegas, which serve as distribution centers for particular regions.<\/p>\n

Four-day rentals are $30 to $800 for apparel in sizes 0 to 22. Accessory rentals run $5 to $400. Many customers are professional women making six figures, who use the \u201cdelivered to your door\u201d service.<\/p>\n

The concept is unpretentious: Customers select a dress, rent it for four days and then return it to the company in a prepaid carrying case. Want to wear a Naeem Khan dress that retails for $5,180? It rents for $800 for four days. A Jason Wu leather handbag that retails for $1,965 rents for $300.<\/p>\n

\u201cIt\u2019s about being a smart shopper,\u201d said the chief executive and co-founder, Jennifer Hyman. \u201cMany clothing items have very low utility. Over 50 percent of a woman\u2019s closet women have worn three times or less.\u201d<\/p>\n

\u201cAnd there is the emotional depreciation of your clothes,\u201d she continued. \u201cIt\u2019s not as exciting to wear something the third time. And with all the social media, everyone sees what you have worn.\u201d<\/p>\n

Also, owning a dress adds work to your life, Ms. Hyman said: \u201cYou have to care for it. You have to store it and dry-clean it.\u201d<\/p>\n

\u201cThere is a feeling of euphoria,\u201d she said, \u201cto only surrounding yourself with things that you need.\u201d<\/p>\n

By KERRY HANNON<\/a><\/span><\/p>\n

A version of this article appears in print on February 14, 2016, on page F2 of the New York edition with the headline: Rent the Jet, or Island.<\/p>\n

\"Share<\/a>