'Usership' * The Rich just want to Use YOU!

The Rise of Usership: How High-Net-Worth Individuals Are Redefining Ownership

For generations, the concept of wealth has been synonymous with ownership. Now a generational change is underway, challenging the age-old adage that "ownership is key."

Wealthy individuals and families have traditionally used the proceeds after building their fortunes to acquire assets – real estate, cars, art collections. In the past 8 years a fascinating shift has accelerated, driven by a confluence of economic realities, technological advancements, and changing values. HNWIs are increasingly embracing a "usership" model, prioritizing access and experience over outright ownership.

This metamorphosis is marked by a transition from possession-based economies to the flourishing landscape of usership, wherein individuals prioritize access and experience over traditional ownership. This revolution, spurred by evolving wants and needs can be seen across the income and wealth spectrum. Now it is fast reshaping consumption patterns and redefining luxury in unprecedented ways.

The Evolving Landscape of Wealth Management

Why has "usership" become so popular among HNWIs?

• Changing Values: Gone are the days when opulence was solely measured by the number of possessions amassed. As Jerry, a Florida classic car dealer says "my older clients owned dozens of classic cars, they treated them as a collection... now I'm seeing forty-somethings with vast wealth, come here and ask if they can lease something for the summer or rent a model for a long weekend." Alongside this shift, a number of collections of classic cars, art, even antiques that have been in family dynasty's for generations coming to the market to be sold. A secretive art dealer in Miami noted "I'm advising younger generations of a family to drip feed their sales into the market, because of the competition from other sellers. For the moment we have plenty of buyers from the East or Emerging Countries keen to buy these assets, if it wasn't the case, values would implode."
• Economic Pressures: Maintaining a vast portfolio of assets has become a larger financial commitment over the decades. Upkeep, taxes, increasing insurance premiums and the ever-present risk of depreciation are significant considerations. Jenny, a London decamillionaire through inherited wealth, said "The costs associated with our prized possessions are mounting inexplicably. Restoring art that's been hanging on our walls costs tens-of-thousands, insurance premiums for the antiques had trebled since 2015, with some having to go into safe storage. When we wanted to use the family yacht last summer, a new engine part wasn't available for 7 weeks, so we had to charter another yacht in the Mediterranean... which quite honestly was far nicer than ours, being more modern. After reviewing with our financial advisor and family members we realised reducing the yearly costs would just give us far more money to invest, save and spend!" Insights like this are why HNWIs are opting for fractional ownership or subscription models that offer access to the same benefits without the downsides. This too has become more feasible as the number of reputable and trusted companies operating in this space has ballooned: increasing the choice and capacity for wealthy users. Co-owning grand luxurious vacation homes through a platform that handles maintenance, staff, insurance, taxes and renovations; chartering the latest yacht each year already located where you need it; or subscribing to a private jet service that grants access to a fleet of aircraft, all at a fraction of the cost of outright ownership becomes enticing.

• Technological Innovation: Technology has revolutionized access to experiences and possessions. Platforms NetJets or online vacation home platforms offer unprecedented flexibility and convenience. HNWIs personal assistants and concierge services can now curate personalized experiences, from chartering a yacht in the Caribbean for a weekend to attending exclusive events worldwide, all with a few clicks. Moreover, images and videos of what to expect are available to remove the gap between expectations and reality. As technology formerly used for warehouse inventory management is fused with booking platforms, we're now seeing discounted access available to certain properties, yachts or jet charters. William Green a private concierge agrees "My wealthy clients are very astute when it comes to expenditure. If they can take advantage of a cheaper private jet charter that gets them to the same destination on the same day, then they'll happily switch from a 12 seater gulfstream to an 8 seat Cessna, when it's just 4 passengers. We've even had larger families take 2 jets at half the cost of a larger one. Often with fringe benefits such as some leaving in the morning and the late risers taking an afternoon flight."
• Shifting Values & Sustainability: Millennials and Gen Z inheritors are entering the HNWI bracket with a different perspective on wealth. We have seen the media hark on about how newer generations prioritize experiences and social impact over traditional displays of affluence. This generation values access and flexibility over the burden of ownership. Sophie who manages yacht charters in Ibiza told HNWbrief "I'll have twenty-something ladies call and charter a yacht for a week, then tell their guests nobody can post pictures on Instagram. They may live a public life promoting environmental causes, and can't be seen indulging in a heavily polluting luxury yacht; yet they want the privacy and access to secluded locations a 60 foot sunseeker can grant them. Not owning the yacht (when can easily afford to) keeps their conscience clear."

Examples of Usership in Action

The usership trend has transcended to most sectors of luxury. Take these real world examples:

• Unique Vacation Homes: Probably the largest trend from HNWbrief subscribers is the traditional second or third vacation home being eschewed in favour of luxury rentals. Reasons include wanting to experience new locations (with more privacy than hotels offer), changing locations as families grow and then downsize when children are older - or upsize as extended families and grandchildren join traditional holidays. An emerging factor is climate change. In particular with ski resorts we have witnessed multiple subscribers sell chalets in lower altitude locations to ensure they can rent homes in locations where snow is still guaranteed. With summer homes, Kenchi, a buying agent for UHNWI has seen a dozen of her clients sell large vacation homes in countries they see as too hot in the peak of summer (Greece, Cyprus, inland Spain) and purchase a more convenient year-round city apartment in Florence, Milan, Paris, Miami, Palm Beach, Singapore or Dubai, that is used as base whilst they rent luxurious villas from with pools, staff, stunning views and idyllic locations as their desire takes them. The convenience of platforms like VRBO, Exclusive Resorts aswell as upscale offerings from AirBnB Luxe and services from traditional real estate services used by discerning individuals as per Nest Seekers International allow HNWI the flexibility to take a winter week in St Moritz or Aspen, followed by 2 weeks in Spring in a Moroccan riad, or English Country Estate, then a 2 month summer rental in St Tropez, Palm Springs, Tuscany or Fiji.
• Luxury Cars: Gone are the days of boasting a garage full of exotic vehicles. When George's father used to house his collection of modern supercars and classic cars in a barn, ready to show off to visitors, insurance was cheap and maintenance was handled by a single full-time mechanic. Now the same collection is mostly in secure storage "it's halved the insurance cost" so he doesn't get to see them and show them off and whilst his father prefers sailing to driving his automotive fleet, George is thinking of a new approach. "Harry our mechanic would service and maintain our cars with them only going to dealership service facilities each 2 to 3 years. Now it's a full time job for my assistant to book cars in for maintenance, have them collected, dropped off, deal with mounting costs as many parts need to be custom made... managing the collection has become a job in itself and costs have sky rocketed. A new wing mirror for a modern classic supercar cost more than a motorbike! Then the depreciation: whilst some of our collection has grown impressively in value, other models have lost over $100,000 a year." HNWIs are increasingly subscribing to car-sharing services offering access to a diverse fleet, from high-performance sports cars for weekend getaways to eco-friendly options for daily commutes. Clubs such as Freedom Supercars in America, Auto Vivendi in the UK allow members three key benefits: access to the latest super, hyper and luxury cars when users want them; social events with a likeminded community of enthusiasts, from watching the Monaco GP from a luxury yacht or taking a Private Jet together to the Geneva Motor Show or Palm Beach Concours; the option to have your own supercars used by club members to earn a return on your fleet, whilst having them maintained and stored safely.
• Art Collections: Traditionally, art functioned as both an investment and a status symbol. Today, the wealthy elite are leveraging online platforms such as Masterworks or Artemundi that offer fractional ownership of prestigious art pieces. Whilst there will always be demand for pieces to hang in the home or office, this allows HNWIs to diversify their portfolio, support emerging artists, and enjoy the benefits of art appreciation without the hefty price tag or concentrated investment bet of a single masterpiece. Going one step further, there are multiple agencies like Artelier and King and McGaw whom offer a revolving collection of loan pieces for your homes, office or yacht, so that your walls can reflect your changing mood, the rotating seasons or showcase new inspiring works that you wouldn't have time to seek out yourself.

• Yachting: Owning a yacht can be a multi-million dollar commitment, not to mention the ongoing costs of crew, maintenance, and docking fees. Most annoyingly says Jose, a stalwart of the industry "competition for good staff, parts shortages and rising fuel costs are making ownership less enjoyable. Even the fast pace change in technology and design means we can have owners looking at major upgrades after only 5 years of ownership, down from 12 to 15 years on average before." Fractional ownership and yacht charter services provide privacy seeking HNWIs with access to luxurious vessels for specific durations, eliminating the long-term financial burden. "Our new clients are a mix of those thinking of buying and those selling and not buying something new - that was rare before, people would just upgrade to a new yacht at huge cost" says Malena, an international yacht broker. Long wait times for new vessels has pushed many into chartering and an increasing number decide to remain with the low hassle, high flexibility solution. "At first many say they will test some different yacht sizes and styles, to help them when buying" Malena says, "then they like the ability to upsize if they are having a big birthday party, or be on a yacht in the Med, decide they don't like it and fly to Asia and rent something in Bali, with no guilt of what they left behind. When they find out the cost of sending a yacht from a summer in the Mediterranean to a winter in Barbados, they quickly realise charter is the way forward." Although seafarers who wish to spend multiple weeks or months aboard a yacht each year will prefer to remain owners, once many owners migrate from 'day boats' into more meaningful yachts for a week or more vacation, charters are increasingly the first port of call. Malena puts this in perspective "For millionaires and decamillionaires, chartering makes complete sense and maximises your enjoyment. Once we get to Centimillionaires and certainly Billionaires, the reason for ownership is different and we see it makes more sense to own a statement yacht with heavy personalisation, uber secretive staff, extra security apparatus and additional support boats and helicopters that can land onboard. Plus there's very little sensitivity on costs tied to desire for complete customisation."

• Private Jets: Private jet ownership has always been a symbol of ultimate luxury. Nothing screams "Freedom" more than jumping on one's plane to do business in the morning, travel to a Michelin three-starred restaurant then opera in another city in the evening, then return overnight to watch the children in their school play. However, the high operating costs and limited usage often make it impractical. Steve Artera a former pilot notes "less than 30 trips a year, I'd charter. Once you get to more than 250 flying hours, depending on the destinations, having your own jet with personal design elements and the same pilots and crew, starts to make sense." Even then, long wait lists for new planes a hot secondary market since post pandemic times increased demand for private travel and making a choice around size that needs to be future proof can be pain points. We have seen many an instance of a new plane being delivered only to be undersized as travel needs grow, or for a family jet to be purchased then used mostly for solo business trips. In both cases buyer remorse shines through quickly and these planes often end up being sold within 2 years - albeit at strong residual prices in the current market. Subscription-based private jet services offer a solution, allowing HNWIs to travel on their own terms without the astronomical upkeep costs. Netjets is the clear pioneer in this space and has created the category of fractional ownership that many others now copy. Whereas concierge style booking services can help with occasional family vacations or a monthly hop from one state or country to another, once flying hours hit 100+ then the reliability and availability afforded by the fractional services renders them first choice. The other key consideration here is technical expertise. Platforms like NetJets employ teams of experienced pilots and maintenance staff, ensuring the highest safety standards and optimal performance. This allows HNWIs to forego the burden of managing personnel and technical aspects and sleep peacefully at night!

A New Definition of Luxury

The usership trend reflects a redefined concept of luxury. It's no longer about accumulating possessions but about acquiring experiences, maximizing convenience, and minimizing burdens. Time is the ultimate luxury - you can't buy more of it and nobody can bring it back for you. If you care as much about maximising time for your desires, rather than wasting it then "usership" is helping curate a lifestyle tailored to maximising individual desires.

The Road Ahead

HNWbrief believes we will likely see a further integration of usership models into more areas targeting you, as a HNWI. As technology evolves and platforms refine their offerings, expect even more innovative and personalized solutions. Airbnb has launched its Luxe collection, but we foresee services that take the summer rental your concierge books on the Gold Coast, in the Hamptons, St Tropez or the Palm in Dubai and transports your "vacation home" belongings (books, clothes, toys, technology, ornaments) which remain in safe storage the remainder of the year and places them around the property just as you would have them at home, whilst dressing the spaces with art and furniture of your taste, and ensuring the wine fridge and humidor are stocked with your favourites. If sellers can dress a home for a few weeks when it's for sale, why not for vacations?

However, this transition is not without its challenges. As usership becomes increasingly prevalent, concerns surrounding data privacy, security, and trust will come to the forefront, necessitating robust regulatory frameworks and technological safeguards to protect the interests of consumers.

Nevertheless, the allure of usership is undeniable, offering you the freedom to curate their lifestyles according to their desires, without being tethered to the constraints of ownership. In this new era of consumption, experience is the ultimate luxury, and usership is the key to unlocking its full potential.

Questions or Comments? Email the Editor: hnwbrief@outlook.com