The rebound of the yachting industry

The travel and hospitality industries have been among the hardest hit by Covid-19. With borders closed and planes grounded, people can’t get to many destinations in the first place, and if they can, many have reservations about staying in hotels and interacting with employees. But, there is one bright spot in the travel landscape: the yachting industry. While it was certainly impacted in the early stages of the global lockdown, it is rebounding in yacht sales, and in certain destinations, charters are also doing well.

Yachting’s appeal is easily recognizable in the world today. Richard Lambert, Senior Partner & Head of Sales for Burgess Yachts, says, “One of the very unique aspects to yachting is its ability to be on your own with your family. You can isolate to a certain degree and create almost a bubble around you. I think that’s one thing that’s appealing more and more to clients. It’s increasing the appetite for yachting.” Gary Wright, Y.CO co-founder and chairman, agrees: “While of course the amount of yacht charter that could take place this year was reduced by changing travel restrictions, we’ve actually seen a rise in demand from clients who are viewing yachting as a safer alternative to shore-based holidays due to yachts’ natural isolation and self-sufficiency.”

While both yacht sales and charters have decreased from the robust numbers of 2019, Covid-19 has led to a shift in consumer behavior in sales: Clients who typically would charter yachts are more interested in purchasing them. Lambert says, “For smaller boats, the sub-100ft market, we’ve seen a situation where a lot of the brokerage stock is now sold, and a lot of the manufacturers’ stock is also sold out.”

Of course, purchasing a smaller yacht is a more affordable prospect, and sales of superyachts over 100ft are down approximately 40% this year. Despite the number of superyachts being sold, revenue is still high for many companies. Stefanos Makrymichalos, CEO of IYC, says, “There was a bit of a slowdown in March, April, and May, but then there was an increase in sales in June and July, so that might have corrected the numbers a little bit. As we are concerned, our revenue from yacht sales this year is maybe about 5% less than what it was last year.” Y.CO has also seen a recent increase in high-profile sales in recent weeks.

Typically, summer Mediterranean charters are the highlight of the yachting industry. This year, many US-owned yachts that split the year between the Caribbean in the winter and the Mediterranean in the summer did not cross the Atlantic, as owners wanted to be able to use their yachts closer to home. Travel restrictions also meant that Americans could not enter most of Europe to charter in the Mediterranean. The total number of weeks booked in the Mediterranean in 2019 was close to 5,500, and this year it hasn’t crossed 2,500 weeks — a staggering decrease. In the Caribbean and New England, the number of weeks booked is about the same as 2019, despite the months of lockdown, showing an increase in demand for local charters. Lambert and Makrymichalos both agree this is a temporary shift, which could continue into 2021 if the situation with Covid-19 remains unstable. Once it is safe to travel, they anticipate a return to the traditional yacht charter seasons, as the allure of the Mediterranean is so strong.

Another area of the yacht industry that was upended due to Covid-19 was the cancelation of the Monaco Yacht Show and the uncertainty regarding the Fort Lauderdale International Boat Show, which are the most important yachting shows in Europe and the US. These are important events for companies to showcase new yachts, and their cancellation could have significantly impacted business. But, people have adapted to using technology to charter, and in some cases, purchase yachts. Makrymichalos says “The buyers of yachts, or even the charters, they want to look at the yacht they will be buying. We had one client for whom we procured a yacht without him seeing it. As the gentleman is in Asia, he relied on us to source the yacht, negotiate, and ship the yacht to him, but that’s a rare example. Normally, no one would want to buy a yacht unless they see it, even if the photography is fantastic and the video is great. They would not buy a yacht unless they had a chance to view it for themselves, and that’s one of the reasons why sales suffered during the restriction of travel.” All companies are eagerly anticipating the safe return of the shows in 2021, as this amenability to video tours is likely to decrease once travel reopens.