7 things to expect from the superyacht market in 2017

Russian buyers are returning to the market

The past five years has seen a gradual decline in the number of Russian clients buying into the superyacht lifestyle, according to Camper & Nicholsons’ 2016 State of Wealth, Luxury and Yachting report, but this trend is showing some signs of reversing in 2017.

David Seal, sales broker at Northrop & Johnson, told Boat International that the green shoots of recovery are emerging in this market: “I have seen an increase in Russian buyers in the last quarter of 2016 and hope to see this continue into 2017. Yachts are still so aspirational for wealthy Russians, and so they will always find a way to indulge in their passion whenever they can.”

Meanwhile, Simon Goldsworthy, senior broker at Camper & Nicholsons' London office, argues that this trend may be due to the rising cost of crude oil. “The recent OPEC decision to limit oil supply should help the Russian economy and stock market. Many Russian clients have a lot of their wealth in that stock market so they should start feeling wealthier and more confident to buy yachts. I see Russia as coming back strongly in 2017.”

Alev Karagulle from Burgess Yachts sounds a note of caution, adding: “The decrease in Russian business over the last couple of years has been significant so the return of this important market is not going to happen overnight."

High profile superyachts owned by Russian clients include EclipseQueen K, Radiant and Motor Yacht A (pictured above).

Asian interest will build gradually

One of the great white hopes for the superyacht industry is tapping into the great wealth of the Asian market, and although there have been many high-profile sales to Asian clients in recent months, such as the 81 metre Royal Huisman Project 400, it would be unwise to expect an overnight transformation, according to Karagulle.

“The development of the superyacht market in Asia is certainly on an upward trajectory, but it is a slow burn which will take some time to fully mature,” she argues.

Seal concurs, pointing out that the main interest from China seems to be in buying out yards rather than ordering yachts, “I believe that we may still have to wait a little longer before Asia realises its full potential. This will take time to filter through, but I have no doubt that it will come.”

The charter market will be the key to attracting new buyers

The past year has seen a number of high-profile first-time buyers enter the world of superyacht ownership, including the owner of 70 metre Feadship Joy, who is reportedly the yard’s youngest ever client.

Encouraging this trend will be a key priority for brokerage houses in 2017, according to Raphael Sauleau, CEO of Fraser Yachts. "This is something that everyone needs to be concentrating on, there is a huge amount of potential clients out there that are not even aware of yachting," he told Boat International.

Attracting newcomers is something which will be pursued on two main fronts in 2017, Karagulle explains, “Charter is a pivotal part of the equation as it raises awareness of yachting to new audiences. Attracting more newcomers is a major challenge. This said, over the last decade, the larger brokerage houses have invested significantly in marketing initiatives aimed at new audiences — and continue to do so. This is a long-term commitment and the results will only play out over time.”

Goldsworthy agrees, describing the charter market as a “gateway drug” and claims that social media could become a “game changer” helping to spread the glamorous superyacht lifestyle to a wider audience than ever before.

Meanwhile, Seal argues that a holistic management approach is important when persuading newcomers to part with their hard-earned money. “Finding a way to present a purchasing and management structure as one package that frees the owner up to just enjoy his yacht is a constant challenge,” he adds.

Sauleau agrees, citing complexity as one of the key aspects of the industry's image that needs to be addressed.

Beach clubs will become a must-have design feature

The desire to relax as close to the water as possible has seen the superyacht beach club become ubiquitous over recent years, even among smaller yachts, and there are no signs of this trend slowing down.

Goldsworthy describes this feature as “must-have”, while Karagulle argues that this feature is part of the gradual trend away from town house interiors to a more informal beach house aesthetic. “Large floor to ceiling windows in communal areas on board are conveying a closer sense of being on the water and the seamless connection between indoor spaces and deck areas reflect the trend for the more relaxed open-air living,” she adds.

Political instability leads to last-minute charters

Most brokerage houses have reported a steady increase in business for the 2016 Mediterranean season, with Burgess Yachts’ charter division breaking its turnover record last summer, but in some cases this was thanks to a rush of last-minute bookings.

Fiona Maureso, charter director at Northrop & Johnson, explains, “Enquiries and bookings started early and we were all hopeful of returning to a summer season that would be booked well in advance. However, at the beginning of 2016, the geopolitical situation was such that clients became cautious, bookings for the Mediterranean consequently stalled and we ended up with another last-minute season. For summer 2017, with the geopolitical situation still uncertain, it is possible that we will see a similar trend.”

Tamsin Priestley, director of yacht charter at Y.CO, has noticed a similar pattern, “Summer 2016 was almost identical to summer 2015, but with very different patterns as many bookings came in late.”

Meanwhile, Sauleau added, "As a result of global economic and political developments, 2016 was certainly more difficult than 2015, although the number of charters were probably more or less the same. Some clients were confirming very early however there were also many people leaving it until the last minute and trying to get a last-minute deal."

Charter customers will explore further afield

While the usual Mediterranean yacht destinations remain popular among charter customers, there are also several fast-rising destinations that are attracting those who want to avoid the crowds.

Priestley has identified Croatia as a potential alternative Mediterranean star of 2017 after an encouraging 2016 charter season. Maureso also believes that the “quiet beauty” of the Dalmatian Coast will prove to be a strong draw in the months ahead.

Looking further afield, on-trend destinations include South East Asia, where Karagulle reports that the market is experiencing a healthy level of demand for charters as clients look for an alternative to the Caribbean. Burgess Yachts has invested heavily in this area, building up a fleet of charter yachts measuring from 44 metres to 77 metres, including the 50 metre Trinity yacht Sapphire (pictured).

Shared ownership will remain the exception

Recent comments from Erwin Bamps have sparked a discussion about shared ownership, with the Gulf Craft CEO (pictured) arguing that this could be a way to tap into the Millennial trend for prioritising experiences over ownership. “We are going to see a time when the traditional idea of a yacht ownership starts to follow the same path as car sharing services — more convenient than a traditional taxi, and a real alternative to owning a car,” he predicted.

However, all of the brokers we spoke to agreed that shared ownership remains an untested and potentially frustrating option. Alex Lees Buckley, senior sales broker at Camper & Nicholsons Monaco, said, “I’m not familiar with many fractional ownership structures in the yachts that we deal with — there has been the odd yacht partnership but invariably it hasn’t worked.”

Meanwhile, Seal argues that chartering is a much simpler option that removes the possibility of date clashes. “In reality [shared ownership] is so complex and difficult to execute I cannot see it ever taking off. The analogy of Uber I think is better suited to having a day charter on a yacht. I think that there is room to explore the concept [of shared ownership] and it may have some limited success, but I don't see it shaking up the industry.”

Read more

Sponsored listings