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Superyachts are not immune from 'La Crisis' PDF Print E-mail
grandes yatesBy Peter Franklin
18 months ago there were many who claimed that the superyacht industry was recession proof, and that the type of people who buy superyachts were not going to be affected by a financial downturn enough to drastically change their lifestyle, or to give up pursuing their yachting dreams. How naïve that viewpoint now sounds, given what has been happening in the past year, with the new build industry for superyachts being shaken to the core by a dramatic reduction in new orders and a wave of cancellations.
One of the most authoritative reviews of the global superyacht order book situation is published in the Superyacht Intelligence Report, a division of the Yacht Report Group. The information they provide in their latest market activity overview is headed: “2009 A Year of Change.”  They go on to comment that when orders were flowing in the past, there was room in the market for all the players, meaning that the need to examine the superyacht industry and look at its possible shortcomings was hardly necessary. Put more simply…builders built, buyers bought, and the industry boomed!Now, as always when things turn down, its a time for reflection and the industry has to work together in order to return to better days by investing in itself for the future. One view is that the builders have oversold and under delivered, relying too much on a relatively static client base, and failing to market towards a large (and still growing) untapped number of “ultra high net worth individuals” (UHNWI’s.) These are people who could well afford a superyacht, but have not been sufficiently appraised of the pleasures and advantages of large yacht ownership.
 
So, what is on order as we go into 2010?
Here we should note, that Superyacht Intelligence only measure those yachts over 30 metres. This suggests that the trend towards larger and larger yachts over the last few years, has taken the 24 to 30 metre models out of the superyacht category for analysis purposes. And due to the previous buoyancy in the market, the 2009 delivery figures did not reflect the effects of the economic downturn, so this will become all too clear in the delivery numbers for 2010, 2011 and 2012. It should also be considered that as yachts being constructed grow in overall length, so the build time grows with them. This in turn has a decreasing effect on the order books and actual deliveries per year. 
 
Just to give some high level data from the report: The total number of new orders for yachts over 30 metres to commence build in 2009 was 226 (including those of over 50 metres) For 2010 the corresponding figure is 168 (a reduction of 25%)But what is a more dramatic statistic is the reduction in the number of new orders being placed and the amount of yards receiving them during the last two years or so.  2008 saw a total of 258 new orders entering the global order book, which was spread across 73 builders’ yards. In 2009 only 112 new orders were placed (56% less) and awarded to just 45 yards!  Bearing in mind that most yards had full order books with delivery slots stretching into 2012 and 2013 before the crisis, this means that many will have to diversify or market (and price) very aggressively if they are to survive.
  
The conclusion:
This has been a huge but probably necessary course correction for the superyacht industry. The more established and financially strong builders yards will no doubt prevail and benefit from the eventual upturn. For second hand superyachts the remarkably quick transition from a sellers, to a buyers market will probably stay for some while. This means that strong downward pressure on resale prices in the brokerage market is likely to continue. Maybe its time for some of those UHNWI´s to open their cheque books and experience the joys of the sea whilst yachting in luxury! 
   
Peter Franklin
The Islander
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Last Updated ( martes, 09 marzo 2010 )
 
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