No feeling blue for the yacht industry in 2022

It’s that time of year again when we get to marvel at the vast amount of money being spent in the yachting industry internationally. The Superyacht Times State of Yachting 2023 report — the industry’s annual market report — shows some fascinating trends relating to new builds, used vessels and charters as well as some of the trends across all sizes of yacht.

We saw a significant increase in new yacht orders during the pandemic as the wealthy saw the advantages of yacht ownership. There’s the obvious privacy factor, but also the desire to enjoy your wealth while you can and to see the world. It pushed orders in 2021 to record levels but the report reveals a slowdown in 2022.

Sales of yachts over 30m in length declined 27% worldwide for both new and used vessels. This was reflected across most yacht sizes, though those between 50m-80m remained fairly steady according to the report. In 2022, 161 superyachts were completed, more than in 2021. This included the launch of Lürssen Blue, which at 158m long was the largest launched that year and the fifth largest among the world’s 5,555 current superyachts.

That number will undoubtedly rise again in 2023, but just as we are seeing supply constraints in various industries, yacht building is struggling with a shortage of skilled personnel, components and materials. Even so, there are 668 superyachts currently being built or on order and waiting to be constructed — a huge number when you consider the current economic conditions.

Of course, quite a few of these are speculation builds that are up for sale even before they are completed, but this area of the market also declined in 2022. The US is still by far the biggest yacht market for both new and used and it seems fairly resilient to any global change in economic conditions.

One of the most interesting statistics appears to be a change of heart by some of those who bought during the pandemic. Perhaps it seemed like a good idea at the time but then the real costs associated with ownership have forced some to sell.

Where are all the new yachts being built? Traditionally Italy tops the table and it was no different in 2022 with 432 of the 668 new builds over 30m in Italy. Turkey is second with 92 followed by the Netherlands with 82.

Africa again features in the report, though the number of large yachts owned on the continent is quite small. Africa accounts for 1.6% of the global yacht fleet, but, once again, it did see the average size of yacht increase marginally in 2022 to 59m. SA gets a mention in the list of the top shipyards where Southern Wind of Cape Town features.

The Middle East is enjoying strong growth in large yachts, in particular Saudi Arabia, which is focusing on attracting owners through developments like its Neom region. This will include the Sindalah Island club dedicated to superyachts. Interestingly, the Middle East is also one of the areas where the most Russian-owned vessels have sailed to since sanctions were imposed, with Dubai hosting over a third of these yachts over 80m. Others have been moved to the Seychelles and Malaysia.

On the subject of Russian-owned yachts, many have been seized or placed for sale and the share of the global fleet belonging to Russian owners has dropped 1% to 8.1%. If you are considering buying pre-owned and thinking there might be a relative bargain to be had, then you will need to be cautious as ownership could be contested when — or if — sanctions are lifted.

It’s difficult to define any yacht as a bargain, of course, and in 2022, the average price for a used yacht over 30m rose to R242m. Fortunately, if you are looking at 30m-39m, you can halve that price because it’s the superyachts over 80m that really push the market average up, with prices in that segment averaging R2.3bn. If it’s any consolation, they did come down about 40% in 2022.

That’s enough about the money, so what about the trends? Well first, if you want to start a new business, consider opening a shipyard because there’s a shortage of them worldwide. More are being constructed in Turkey, which already has the most but Dubai is also getting in on the action now. Admittedly, opening a shipyard is a bit extravagant but then we are talking superyachts, so extravagance goes with the territory.

The more obvious trends are in the areas of materials, propulsion and sustainability. Owners are asking for more sustainable materials, from responsibly sourced wood to recycled plastics recovered from the oceans in which these vast yachts travel. Electrification is becoming a big thing from small vessels right up to luxury liners. Whether it’s battery-electric motors, hybrid or hydrogen fuel cells, all the major yacht builders are working on solutions to make yachts cleaner. Even former Tesla executive John Vo is getting in on the action with his US-based company, Blue Innovations Group, launching its first electric boat, the R30, though it’s hardly the size of a superyacht.

From pleasure vessels designed for enjoying sundowners off Clifton Beach to the huge superyachts that dominate the Mediterranean coastlines, there’s clearly no real let-up in demand for life on the ocean. However what we are continuing to see is the yachting industry evolving to meet the demands of changing clientele in a changing world.