The superyacht market grows as the rich seek luxury and isolation

After one of the worst crises in the history of tourism and travel, a share of the market has thrived as businesses have grown with an increase in orders.

Demand for superyachts has rarely been stronger, as wealthy tourists enjoyed holiday paradises at sea to escape the crowds and the threat of the Covid-19.

For those who can afford it, there are from water sports to yoga and fitness sessions on board, as well as the chance to spend quality time with friends and family in a secluded bubble.

“Since we left the first closure [last summer], the market has been absolutely booming to much higher levels before we entered the close, ”said Antony Sheriff, Plymouth-based CEO of Princess Yachts.

The success story is echoed by yacht manufacturers across Europe. Ferretti, a shipbuilder based in Forli, northern Italy, delivered a record 56 yachts during the first quarter and said the “fantastic acceleration” in orders defied forecasts.

Elsewhere, a record 208 super yachts have been bought in the brokerage market for £ 1bn this year through May 17, up from 131 a year earlier, according to luxury publisher Lifestyle Boat International.

Yacht bosses also say the pandemic has spurred the rich to re-evaluate how they spend their time and make the leap to buy the first boat or increase them with rising asset prices that add to their wealth. .

With the coronavirus, people realized that ‘your life can change immediately.’ Their perception of life changed and they wanted to seize the moment, ”said Marco Valle, executive director of Viareggio-based Benetti Yachts in Tuscany. “It’s no secret that stock markets are rising dramatically. We were prepared with the right products. “

Even the cancellation of the numerous nautical salons in glamorous places like Monaco has failed to dampen demand, as the boom in online shopping has offset the loss of sales at fairs, which usually attract buyers.

“In a year without nautical exhibitions, we have had one of the best order takings in history,” said Rose Damen, CEO of Damen Yachting, a Dutch manufacturer whose order book has grown to about 800 million euros. in the last twelve months.

However, not everything has been easy sailing. Social welfare requirements have made it impossible to recover the months of lost production when the shipyards were closed last spring, while raw material costs, which cannot be easily passed on to buyers, have risen.

It is also following a difficult decade, highlighted by a series of failures in a consolidating industry, with 20 shipyards producing 65% of the superheroes delivered last year, up from a third in 2010, according to the Superyacht group.

Recent failures include Nobiskrug, in northern Germany, owned by Franco-Lebanese industrialist Privinvest, Iskandar Safa, which passed to the administration last month (April), and the bankruptcy of the Italian Perini Navi in ​​February and Norway’s Kleven last July.

In addition, manufacturers have to deal with some of the toughest customers in the world, as the rich are fierce traders, only in a handful of megaprojects where erroneous budget calculations in a deal can severely affect profits.

“People expect it to be a very profitable business because your customers are billionaires, but in fact it’s not a high-margin business and can pose a high risk,” Damen said.

Now, the task of the builders of the 5,700-person superyacht fleet, defined as ships of more than 30 meters, is to cling to customers in the post-pandemic market.

While the set of 520,000 people with a net worth of more than $ 30 million is expected to grow, according to Frank Knight’s Wealth Report, many wealthy customers may decide to spend their money on other things once the crisis is over. .

Industry executives also say they have a battle to overcome what they consider an unfair stigma that superiors are rich games, increasing inequality and disproportionately contributing to climate change.

A British businessman, who was watching the pandemic with his family on his yacht in the Bahamas while taking calls to work, hinted at social pressure.

“The quality of life and the quality of the time are excellent.” But his email signature tells London to avoid nasty colleagues or jealous customers. “The green-eyed monster is alive,” he added.

Buyers are not usually the stereotyped oligarchs or party animals who represent the popular TV show Under the cover, neither.

“The archetypal owner of the yacht, with tanned skin and a martini in his hand, is a little overwhelmed. That’s gone, ”Brendan O’Shannassy said aboard the more than 100-foot boat he was skating in the southern waters of Bermuda.

Executives also add that sometimes the jobs created by the industry are forgotten. These workers or artisans have often perfected their skills during long apprenticeships or years of hard work.

“People like to talk about the skills, quality and craftsmanship needed to build a Bentley or a Rolls-Royce. But not for superheroes, “said Martin Redmayne, chairman of the Superyacht group.

However, Valle de Benetti still expects a drop in orders and a battle to win and retain customers once the crisis is over.

“Our task as a manufacturer is to convince them[customers]. . . that the yacht becomes something not only new, but a passion to repeat, keep in this life and transfer it to the family to the sons and daughters ”.