This term began to appear at the beginning of the 20th century when wealthy individuals constructed large private yachts for personal pleasure. Examples of early luxury motor yachts include M/Y (motor yacht) Christina O and M/Y Savarona. Early luxury sailing yachts include Americas Cup classic J class racers like S/Y (sailing yacht) Endeavour and Sir Thomas Lipton’s S/Y Shamrock. The New York Yacht Club hosted many early luxury sailing yacht events at Newport, Rhode Island, during the Gilded Age.
More recently, over the last decade or two, there has been an increase in the number and popularity of large private luxury yachts. Luxury yachts are particularly bountiful in the Mediterranean and Caribbean Seas, although increasingly luxury yachts are cruising in more remote areas of the world. With the increase in demand for luxury yachts there has been an increase custom boat building companies and yacht charter brokers. Luxury boat building and yacht charter companies are predominantly based in the United States and Western Europe but are also increasingly found in Australia, Asia and Eastern Europe. European manufacturers such as Ferretti, Azimut, Azimut-Benetti, Feadship and Lürssen dominate the very top end of the yacht building market.
Some yachts are used exclusively by their private owners, others are operated all year round as charter businesses, and a large number are privately owned but available for charter part time. The weekly charter rate of luxury yachts around the world ranges from a high of Euro 661,500.00 (M/Y Annaliesse) to around Euro 20,000.00. Expenses of approximately 25-30%, such as food, fuel, and berthage are charged as an extra as well as a customary 15-20% crew gratuity for good service. The luxury yacht charter industry functions effectively because private yacht owners mitigate their running costs with charter income as well as keeping their yachts and crew in top running order. Conversely, private charterers charter yachts (rather than owning them) because it is generally considered to be less expensive, and less hassle, than owning a yacht and it also provides them with extra choice related to yacht type, location and crew.
Yachts from 23 metres (82 feet) and up qualify for design awards from the Superyacht Society, but at the bottom end of that scale yachts will not necessarily be crewed and many set the minimum length for a superyacht considerably higher. A 45 to 50 metres (148 to 164 feet) yacht, the smallest with a generally accepted claim to superyacht status, will usually be a three decker with cabins for 10-12 guests (that is a preferred number, more common than 14, and is found on yachts across quite a wide size range), and for a crew of a similar size. The accommodation on this type of yacht is typically as follows:
A 50 metre yacht will have one or more luxury yacht tenders for reaching shore and other "toys" which may include a speed boat or sailing boat, jet-skis, windsurfing and diving equipment and a Banana boat. Up to date yachts have multiple flat screen televisions and satellite communications.
The number of very large yachts has increased rapidly since the 1990s and increasingly only yachts above around 65 metres (213 feet) stand out among other luxury yachts. Yachts of this size are almost always built to individual commissions and cost tens of millions of dollars (most super-yachts cost far more than their owners' homes on land, even though those homes are likely to be among the largest and most desirable). A yacht of this size usually has four decks above the water line and one or two below. It is likely to have a helicopter landing platform. Apart from additional guest cabins, which are likely to include one or more "VIP suites" besides the owner's suite, extra facilities compared to a 50 metre yacht will include some or all of indoor jacuzzis, sauna and steam rooms, a beauty salon, massage and other treatment rooms, a medical centre, a discotheque, a cinema with a film library, plunge pool (possibly with a wave-maker), a playroom, and additional living areas such as a separate bar, secondary dining room, private sitting rooms or a library. There will be more boats and "toys" than there are on a 50 metre yacht.
As of 2006 yachts above 100 metres (328 feet) are still sufficiently rare, but increasingly more common, that many yacht enthusiasts can name them all. They typically have five decks above the water line and two below. The very largest yachts have begun to incorporate such features as helicopter hangars, indoor swimming pools and miniature submarines. The burgeoning number of "small" super yachts has led to the introduction of the hyperbolic terms Mega Yacht and Giga Yacht to demarcate the elite among luxury yachts.
The term megayacht was the first one to be used to refer to these yachts, well over 20 years ago. In the yachting industry, it is often ascribed to George Nicholson, the founder of Camper & Nicholsons brokerage firm, though there is no official record. The term superyacht emerged in more recent years, typically among Europeans (again, no official record exists, just anecdotal evidence). As of 2006 yachts above 100 metres (328 feet) are still sufficiently rare, but increasingly more common, that many yacht enthusiasts can name them all. They typically have five decks above the water line and two below. The very largest yachts have begun to incorporate such features as helicopter hangars, indoor swimming pools and miniature submarines. The burgeoning number of "small" super yachts led to the introduction of the term Giga Yacht, first used in print, sardonically, by Yachts International Magazine Editor Jamie Welch in September 2004, noting that there is yet room for "Tera" and still larger metric prefixes.