It is now mid-way through the 2022 yachting season and the industry is full speed ahead. With bulging order books and an unprecedented demand on boats across the world, the industry is currently in an era never before seen. Here we take a look at the factors which are affecting superyacht businesses and what the rest of the year is shaping up to look like.
COVID-19 Changed Our Outlook
Ultimately the COVID-19 pandemic played the biggest role in the current never-before-seen demand for yachts. The global lockdowns and fear that ensued when COVID-19 emerged changed the way many of us approached life. It made us consider what was important, and that was family. It wasn’t any different for UHNWI’s, who looked to yachting as a way of spending social distanced time with their loved ones in safety. Yachts allowed them to still enjoy holidays and travel, but in a bubble of cleanliness and far from other people. Combine this with the growth in remote working, which allows people to spend prolonged periods on their yachts whilst still keeping in touch with work commitments, and you have the perfect combination.
The Superyacht Industry has Seen Unprecedented Growth
Never before has there been such a demand on superyachts – or indeed any boats – as there has been in 2022. Both new and used superyachts are a hot commodity and it is reported that there are currently 1,024 superyachts in build or on order, a figure which has increased from 604 at the start of 2022. To put this into context, that is a 24.7% rise on 2021 (the second best year for new orders on record) and even pips 2009 – the previous top year – by 1.9%. In monetary figures, in 2021 the luxury yacht market was worth $10,860 million. Based on this year’s growth, the market is expected to be worth in the region of $16,680 million in 2028.
Italian shipyards are leading the way, with the Global Order Book recording more than 500 projects in 2022 at major shipyards such as Ferretti and Azimut-Benetti. However it is German and Norwegian shipyards who are building the largest superyachts this year, with the average length of a yacht in German shipyard Lürssen measuring a whopping 124 metres. In fact, if you combined the length of all superyachts on order in 2022 they would measure over 4 kilometres!
The Demographics of Superyachts Owners and Charterers are changing
During 2020, data has revealed that a new billionaire was created every 17 hours, with a record number of 493 people joining this elite group. The war in Ukraine and subsequent sanctions on Russian oligarchs did cause the numbers of billionaires to drop slightly, although overall the total wealth stayed at record highs. However, it’s the age of new superyacht owners and charterers which as marked the biggest change in demographics.
Over the past 20 years, the average age of a superyacht owner has dropped by about 10 years, a trend which is believed to continue. It is predicted that within two decades the average age will be between 35 and 45 years old. While we’re seeing a trend in millennials preferring to charter a superyacht rather than head down the road of ownership, there is still a huge number who are ordering custom new builds that are challenging the status quo.
New Styles of Yacht are Gaining Popularity
So who are these younger owners and charterers, and how are their interests changing the industry? Their drive for adventure is a major factor, and is fueling the boom in explorer yachts. Not content with the usual Mediterranean and Caribbean cruising grounds, they want to go further off the beaten path and explorer yachts are designed to take them there. In 2022 there are 85 explorer yachts on order, an increase of 32% over last year and an increase of 55% when compared to the 2015-2019 period.
Another major change which is gaining momentum is the demand for more sustainable eco-yachts. With growing awareness of the effects of diesel-powered yachts on the oceans, pressure on the industry to provide alternative solutions is generating more and more eco-yachts hitting the seas. Changes are being seen from the use of renewable energy in manufacturing, to hybrid propulsion and on-board sustainability changes. Green technology is now one of the fastest growing sectors of the yachting industry and almost every major yacht builder has committed to reducing fuel consumption, contributing to the creation of marine reserves, providing solutions to overfishing and carbon offsetting and eliminating plastic.
At the smaller end of the superyacht market, 2022 has seen a significant rise in the number of sportfisher yachts being ordered, after a few years where they were in less demand. It is believed that the COVID-19 pandemic fueled a rise in the need for more cabins and overnight space as people want to spend more than just a weekend on their boat.
Superyachts are Getting Bigger
Superyachts are getting bigger and bigger, and there are eight yachts which have launched in 2022 or are due to launch which have entered the top 50 largest yachts on the planet. With yachts like Earth 300 and Rev Ocean setting a gargantuan benchmark, privately-owned leisure superyachts (as opposed to those created predominantly for research and scientific purposes) are following suit.
It Hasn’t All Been Good News
While the overall outlook for 2022 has been an unprecedented boom in the yacht industry, it hasn’t all been plain sailing. Issues with staff being unable to work due to COVID-19 coupled with the global supply chain issues has meant that some shipyards have struggled to fulfill their orders. Both the Italian shipyard Perini Navi – famed for building the racing yacht Maltese Falcon - and iconic German shipbuilder Nobiskrug – known for yachts such as Sailing Yacht A - filed for bankruptcy in 2021. Perini Navi went into liquidation and Nobiskrug was taken over by Lars Windhorst, founder and owner of the Tennor Group.
Everything seems to point towards a continued boom in the demand for superyachts - and boats in general - as we go into 2023. With a backlog of pre-orders and more flooding in, a lack of stock and a desire to take to the water combined it is set to be another record year. The boat shows are back with a vengeance, bigger and more popular than ever, and shipyards are gearing up to take on more orders as they try and meet the demand. So for those in search of their next yacht, whether it’s a used sailboat or a brand new motoryacht, get your name on the list now and start searching.
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