Luxury Yacht Market

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Luxury Yachts: Market Overview

The global luxury yacht market can be categorized by length of the yacht, manufacturing material used, or type of yacht. Demand for luxury yachts has been on a steady increase in recent years, which can be attributed to growth in the number of individuals with high net-worth.

Market Size

  • The global luxury yacht market was valued at $5.7B in 2017 and is expected to grow at a CAGR of 7.8% between 2018-2025 to reach $10.2B by 2025.
  • The demand for luxury yachts has been on a steady increase in recent years, which can be attributed to growth in the number of individuals with high net-worth and, therefore, the inclination towards leisure activities, recreation, and the yacht tourism trend.
  • The luxury yacht market can be grouped by length of the yacht, including those that are 75-120 feet long, 121-250 feet long, and more than 250 feet long, manufacturing material, including fiber-reinforced polymers, composites, wood, and metal alloys, and type of yacht, including sailing and motorized luxury yachts.
  • The 75-120 feet long luxury yacht segment dominated the 2017 market share and is expected to continue dominating the industry during the 2018-2025 forecast period. The key drivers for this segment's growth include improvement in style, liveability, design, technological innovations, comfort, and performance.
  • The motorized yacht types, which include styles such as flybridge, yachts pilothouse, sedan bridge, large express-style, and aft cabin, are also expected to exhibit dominance during the 2018-2025 forecast period majorly attributed to their room space allowance, on-board facilities, and recreational opportunities.
  • Fiber-reinforced plastic is preferred for yacht manufacturing due to its low stiffness, lightweight, and high corrosion resistance, helping increase payload and speed, reduce fuel consumption, and enhance flexibility during construction.

Key Players

  • Some top luxury yacht manufacturers include Feadship and Fincantieri Spa. Feadship is a Netherlands-based superyacht building company founded in 1949 that also offers dedicated charter and refit services for their fleet.
  • On the other hand, Fincantieri Spa is an Italian shipbuilding group with over 230 years of experience, recognized for its cruise ship designs and constructions.
  • Some top-rated products for Feadship and Fincantieri Spa can be found here and here, respectively.
  • Marine Max is one of the top luxury yacht resellers and one of the largest recreational boat and yacht retailers in the US. The company focuses on luxury yacht brands such as Benetti and Ocean Alexander and other premium boat and yacht brands, including Azimut Yachts, Sea Ray, and MasterCraft.
  • CharterWorld is one of the leading luxury yacht charter companies globally; offering crewed luxury yachts for large motor yacht charters, catamarans, and sailing yachts. The company is headquartered in the UK and has 199 employees.
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Luxury Yachts: Industry Trends

The two current trends in the luxury yacht industry include eco-friendly manufacturing and interior design items that reflect the outdoors. Some key drivers for these trends include the target high-net-worth clients who have become more eco-conscious, demanding more sustainable yachting solutions.

Eco-Friendly Manufacturing

  • One of the emerging trends in the luxury yacht industry is sustainable solutions in the supply and building of luxury yachts, such as the reduction of fuel consumption.
  • The International Maritime Organization set goals of reducing greenhouse gas emissions by 50% of the emissions in 2008 by 2050 and required the overall maritime industry to get involved.
  • Other key drivers of this trend are the high-net-worth individuals and yacht owners who make up the main clientele for the luxury yacht industry. The clients are becoming more eco-conscious and demanding propulsion systems that burn less fuel, paint options such as sustainable epoxies that are safer for marine life, and hybrid yacht batteries that motorize yachts and offer fuel-less transportation for hours.
  • Yacht charterers have also been focusing on recycling initiatives and evaluating the impact of crew members' actions on the sea, including the use of plastics aboard ships.
  • One manufacturer at the forefront of the eco-conscious trend is Oceanco, the Dutch-based luxury yacht builder. Some top-featured sustainable products built by the company include the Black Pearl and Bravo Eugenia.

Outdoor-Inspired Interiors

  • Another emerging trend in the luxury yacht market is interior design items that reflect the outdoors, such as those offering 360° views, beach clubs, open spaces, and pool decks.
  • The main drivers of these trends are the high-net-worth clients who while still indoors, favor the feeling of being outdoors leading to the design of yachts with more light, beach clubs, and vertical bows, therefore, allowing for modern exterior lines and larger interiors
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Luxury Yachts: User Profile

We were able to find demographic data and pyschographic insights about both luxury yacht owners and yacht owners in general. Our focus was on luxury yachts, but we also wanted to include the insights we came across during our research about yacht owners in general as well. The insights below are specific to yacht owners.

Age

  • A February 2017 article published by Windermere Premier explained that the International University of Monaco conducted research, which found that "the median age of superyacht owners is set to shift from 45-55 to 35-45 in the next twenty years."
  • According to a Yachts International article originally published in February 2013, which was updated in July 2018, "yacht owners are getting younger. On average, owners are 10 to 15 years younger than two decades ago." Though that article didn't specify what either age is, an article published by TJB Super Yachts in September 2019 stated that "the average age of a yacht owner is now around 40."
  • Per an article published by CNN Wire in September 2018, the median age of a superyacht owner ranges from 45 to 55. By around year 2038, that median age is projected to decrease "by 10 to 15 years."

Income

Nationality

  • Per a September 2018 article published by Riviera Insider, "US clients still remain the biggest yacht buyers in terms of numbers, with Russians and Middle Easterners close behind. Buyers from Hong-Kong are active as well and have doubled to represent 4% in the past 12 months (compared to 2% between 2013 and 2017)."

Pyschographic Insight

  • A 2016 article about luxury yachts published by wealth management firm Kaiser Partner cited demographic research conducted by Bannenberg & Rowell (yacht designers), which stated the following: "Our demographic research tells us that a younger and more open generation is coming through. . . . Some of them are keen to pursue various activities on and in the water to an ambitious level; some want to have an adventure in new regions beyond the reach of traditional yachting."
  • That same sentiment was echoed in another article, which stated that "[t]his new breed of adventurous yacht owner wants to explore the world, see wildlife, and venture to off-the-beaten-path destinations."
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Luxury Yachts: Purchase Journey

When deciding on a luxury yacht, potential buyers often observe the core performance factors of the vessel, including its displacement, speed, size restrictions, carriage requirements, and the ability to customize and build their own yacht.

What They're Looking For

  • It is recommended that interested buyers take into consideration the core performance factors of a luxury yacht before making a purchase. This includes deciding whether to purchase a sailing or motor yacht, as well as one with slow full-displacement, high speed performance, or a semi-planing hull shape.
  • Potential buyers also consider any size restrictions that come with the luxury yacht such as if the dock they will be using can accommodate its size or whether a fixed bridge will restrict access to a boat that has a certain air draft.
  • Buyers will review their guest carriage requirements and any maintenance concerns. Additionally, they observe the boat's range, considering the places around the world that they wish to travel to. Some ports do not receive services from a yacht transport service, requiring the vessel to possess a hull shape as well as an ocean passage making range.
  • Furthermore, potential buyers will compare the pros and cons of full-displacement and semi-displacement, which are listed by the Luxury Yacht Group in this chart.
  • Many individuals desire the opportunity to build and customize their own luxury yacht from scratch, tailoring them to fit their specific wants and needs. More importantly, they seek the chance to make a sound investment by purchasing a luxury yacht.
  • Those that decide to charter a luxury yacht can view it as a sort of route to ownership, as they are able to obtain firsthand experience and sample different yachts with varying sizes and styles.

Why They Choose a Luxury Yacht Charter Over Other Vacations

  • Chartering a luxury yacht offers people freedom and luxurious accommodations. They do not have to constantly pack and unpack, and they enjoy superlative services that cannot be found in hotels.
  • Also, chartering a luxury yacht allows them to visit remote locations, secluded beaches, and volcanic islands, among other areas of the world such as the waters of Antarctica, South America, New Zealand, etc. As yacht charters travel to various locations throughout the year, families and friends can use them to visit different areas depending on the season/time of year. In the summer, they can travel to the Mediterranean, while spending the winter in the Caribbean.
  • A yacht charter enables them to engage in island-hopping adventures. Users are able to do this wile maintaining their privacy, something that is difficult to do when on other types of vacation. Yacht builders, crew, and brokers do not share the name of the vessel's owner, and builders sometimes sign an NDA that prevents them from disclosing private details of the individual commissioning the yacht (this agreement can extend to charter yachts)
  • While most luxury yachts available for chartering have fundamental water equipment for activities such as snorkeling exploration, others are equipped with inflatable slides, personal submarines, and scuba gear. These vessels can also be used to host business meetings.
  • It is reasonable to assume that people chose to charter a luxury yacht over taking other vacations because they are able to bring more people with them, without the hassle of taking alternative forms of transportation (e.g., planes). Some luxury yachts, such as the PYC and SOLAS-class vessels, are licensed to carry a maximum of around 36 passengers.

How Purchases/Charters are Made

  • When it comes to buying the boat, many luxury yacht buyers globally seek the assistance of experienced and professional yacht brokers to help them. The broker presents an offer to purchase the yacht on the behalf of the buyer using an industry standard contract, according to the Luxury Yacht Group.
  • Typically, a deposit amounting to about 10% of the stated offer price is placed into escrow with either the buyer's broker or attorney. As stated by the World Yacht Group, the offer price is usually dependent on the sea trial, ability to get financing (for those that are not pre-approved), and the survey.
  • After the survey of the yacht and the sea trial is successfully completed, the buyer provides a written acceptance for the ship and must close the sale on the closing date that they agreed to with the seller or their 10% deposit will be at risk. Afterward, there is an ownership exchange between the seller and the buyer, and the buyer will have to acquire insurance and registration. The management team of the yacht consultancy/brokerage that they buyer has employed will often assist them in obtaining the required documentation and insurance.
  • Regarding charters, users can opt to make purchases directly using their credit cards or hire a charter broker. Charter brokers present their clients with various options, allowing them to select crews that are family-friendly or capable of organizing lavish parties. The MYBA, a global yachting association that offers ethics and technical guides for the industry, and the International Yacht Brokers Association both provide a listing of different charter companies and brokers abiding by global guidelines.
  • Users that choose not to use a broker can utilize a variety of websites (e.g., Yotha) and applications (e.g., Ahoy Club) to browse and book charter yachts.
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