Some pandemic-era yacht owners are returning to land.
The pandemic has caused a “huge surge” in yacht sales, said Richard Allen, chief executive of Hong Kong-based sailing company Simpson Marine.
“We’ve seen a lot of these people, who’ve had their boats for two years, kind of now want to go sailing,” he told CNBC. “Over probably the last few months, talking to other people in the industry, we’ve seen an increase in the listing activity of … boats being sold.”
This was to be expected, said Paolo Cassani, CEO of Monaco-based sailing company Camper & Nicholsons.
“We have sold, as an industry worldwide, more than twice as many yachts [in 2021] from 2019,” he told CNBC. When that happens, they “go to market starting a few years later.”
Prices on the used market
Enthusiasm for yachting remains high, even if sales are down from 2021, Casani said.
“The industry is coming back in 2019,” he said. “And we have to distinguish between brokerage and new construction because the demand for new construction is still quite high.”
With more yachts hitting the brokerage market, prices are down, albeit slightly, from pandemic-era highs, he said.
“Prices are still quite high,” he said. “There is still a gap between demand and supply … but we believe there will be further narrowing during 2024.”
Asian yacht growth ‘less than expected’
But some yacht buyers in Asia, Allen said — are actually trading up for bigger vessels.
“Some have really enjoyed the boating lifestyle and are already upgrading … to bigger boats,” he said.
Asia – a continent of growing wealth and numerous island nations, many bathed in year-round warmth – has long been seen as the next frontier for global yachting development.
Casani and Allen, who spoke to CNBC on April 26 while attending the second annual Singapore Yachting Festival, agreed that the continent’s yacht market is growing.
But, Casani said, the pace is “less than expected” for many reasons, including culture, lifestyle and lack of infrastructure.
“But we still think Asia has very high potential,” he said.
Allen said disparate and burdensome “rules and regulations” in the region are holding back progress.
“We need to make it easier for boats to move between the region,” he said. “In one country you might be able to drive a boat of a certain size, but then in another you can’t. So things like that – red tape, let’s say.”
Complicated visa requirements for foreign boat crews are problematic, as are high import taxes, which can be as high as 40 percent in some markets, he said.
“We have to do a lot of lobbying with governments to make it easier to bring boats in,” Allen said. “There are a lot of lobby groups like ICOMIA… that work much more collaboratively with the various constituencies to have a voice in government.”
The International Council of Marine Industry Associations, or ICOMIA for short, hosted a two-day conference ahead of the Singapore Yachting Festival to address issues facing the industry, from sustainable propulsion to the lack of marina infrastructure in high-potential countries such as Indonesia, the Philippines and Vietnam.
Beyond purchase and charters
Simpson Marine estimates the global recreational marine market will reach around $46.5 billion by 2027 – which it says will trickle down to the local economy through job creation and tourism revenue.
“The yachting industry employs thousands and thousands of people building boats, supporting boats, all the component maintenance services,” Allen said. “This is a … great industry that countries should embrace.”
Newer forms of ownership make yachting less expensive, which opens up the industry to more people. One model that is particularly popular in Australia is fractional or syndicated ownership, where owners buy a share of a yacht, he said.
Others eschew ownership altogether, opting for flexible subscription models, which are now the norm for many forms of entertainment, from music to television.
“We’ve seen tremendous growth in boat clubs,” Allen said. “It’s a bit like joining a gym or a golf club. You pay a monthly fee and use a boat so many days a week. And that’s very popular for people who don’t really want all the hassle of owning a yacht.”