How The Yacht Industry Is Staying Afloat In A Pandemic

 

 

In contrasting to the fortunes of many during the Covid-19 pandemic, the superyacht industry is not just staying afloat, it’s steaming ahead according to international yacht associations and businesses. Reports of record interest and robust sales this summer across all boat segments aren’t the result a public relations push. Instead, we’re seeing a new trend emerge of people looking for new ways to ‘staycation’, avoid lockdowns and continue to holiday amidst these new uncharted social distancing waters.  

 

However, it would be naive to believe Covid-19 hasn’t had an impact on the superyacht industry’s supporting businesses and wider maritime industry. The crisis has already caused the cancellation or postponement of a swathe of international events, including the Dubai, Singapore, MYBA Charter Show and Palm Beach boat shows. One issue yet to be addressed is how the many boat shows and other industry events that have been postponed can be rescheduled without overlapping.  

Luxury Yacht Market inforgraphic

How are sailing yacht sales performing during COVID-19?  

Across the Atlantic, the US’s National Marine Manufacturers Association (NMMA), tracked a 59% uptick of new boat sales in May 2020 compared to April, and which was up 19% compared to May 2019. Superyacht sales, which are defined by the NMMA as boats 33 feet in length or longer, increased by 51% in the U.S. in May. 

“The new data from the NMMA reinforces what we’ve been hearing from dealers and manufacturers from across the country: record interest and robust sales this summer across all boat segments, as Americans invest in new ways to escape and vacation in the social distancing era,” says the NMMA. “Many dealers are also reporting first-time boat buyers.” 

Alfred Law, is director of UK based global yacht brand Sunseeker. He has seen changes in who buys yachts and how those purchases are made during the pandemic, but he has also seen increased opportunities. For example, there was a couple in Singapore who had well-known office space — and instead of buying a new home, condo or property, they opted for a “floating home,” which is one of the use cases among yacht buyers. 

“Floating homes are becoming more and more common, partially because hotels and air traffic are restricted. The only way people can go for a staycation is on the boats — they can go out and spend a few hours or even a night out on the sea, says Law. 

However, new luxury yacht purchases have slightly dipped, according to Law. The current economic climate means that high-net-worth individuals (HNWI) who make up typical yacht buyers are unsure about the future. Used yachts are dropping in price and selling well in locations such as Singapore and Hong Kong despite the political situation. Vietnam and Cambodia are also emerging yacht markets, with what Law calls “invisible tycoons” starting to show themselves in those territories. 

How much are used yachts to buy? 

They can start from $1 million and go upwards of $256 million.  

How many super yachts sell per year? 

Between 10 and 12 super yachts will sell in an entire year, according to pre-pandemic data.  

How much does it cost to maintain a super yacht per year? 

The average expense to dock, store, staff and maintain a super yacht is around $2 million per year according to Investopedia. 

Who is buying super yachts during the pandemic? 

Typical customers are millennial business owners interested in a yacht for both business and leisure purposes. They look for ancillary products on board, such as karaoke bars or Jet Skis attached to the boat. Gen Y customers are also emerging with a more practical approach to purchase and lease. 

High Net Worth Individuals (HNWI), teams of HNWI’s who share the cost and maintenance of the super yacht, HNWI with financing and rental or lease customers. 

“During the pandemic, we’ve seen a rise in yacht rentals. Previously, we got yacht rentals probably four to five times a month. But now, we get inquiries on a weekly basis. A lot of families come to us for a staycation”, says Sunseeker’s David Law. 

However, while some yacht charter companies are promoting a few weeks aboard a superyacht as a safe haven from contagion. This potentially overlooks the fact that the crew may well outnumber the guests and that yachts have to dock somewhere to refuel and take on fresh provisions. With many counties having closed their maritime borders or implementing stringent bio-security entrance restrictions, the options for superyachts to berth are currently limited. If a guest or crew member were to be taken ill during a charter, the luxury vacation could quickly turn into a quarantine nightmare as illustrated by coronavirus outbreaks on cruise ships.

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