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10/09/2010
at 15:29
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THE LUXURY YACHTING MARKET
This year, the luxury yachting market was again buoyant with 829 24-meter plus yachts, with an average of 38 meters in length, either under
construction or on order at July 2007. This is a 25% increase in three years.(1)
A targeted clientele that continues to grow
The large-size yacht market (24-meter plus) has benefited from sustained growth for more than ten years, sustained by wealth creation and the emergence of new fortunes in fast-growing economies such as Brazil, Russia, India and China.
This favorable development has been made possible by the typology and behavior of the clientele:
• a number of private financial wealth (with financial assets in excess of $30 million) has been estimated at more than 95,000 and this number remains high in relation to the number of yachts built worldwide. This number has increased by over 12% in 2006 and 36% over 3 years ; (2)
• driven by a strong global economy, total financial assets of wealthy people reached $37,200 billion in 2006, a 12% increase. Assets held by millionaires recorded double-digit growth for the first time in seven years ; (2)
• a commitment to affirm one’s independence in the face of economic cycles, by displaying very significant consumption to their peers, even in reputedly difficult times.
The success of large-size yachts and the open concept
The pool of potential buyers of large size yachts has significantly increased over the last ten years. Indeed, these yachts, which until recently were the exclusive domain of a specialized seafaring clientele, have now become very much mainstream, and in the process, become accessible to a much larger population. This evolution has been magnified by the range on offer from shipyards, the user-friendliness of yachts, electronic navigation aids and a very sophisticated marketing approach. Owners spend more and more time on their yachts, due in particular to new technologies which enable them to stay in contact
with people ashore when at sea. Motorized yachts, simpler to handle, have thus won an increasingly larger share of the market and now account for 90% of all new yachts built.
In the large-size yacht segment, this evolution was made particularly evident by a population segment that discovered a new form of premium quality leisure that may, notably, be enjoyed in an isolated environment or intimacy, even in the middle of summer at the most popular seaside resorts. Thus, for the world’s wealthiest people, the ownership of a yacht has become a “must”. In an already very favorable movement, the Open yachts segment has enhanced this phenomenon even further by taking advantage of qualities that coincide with the tastes of the target population: large open space, a particularly sporty line, high speed, and for the best builders, a high level of finish.
This keen interest remains strong, and has been proven by the real success of the new Mangusta 165’ Open.
More generally, a significant increase in large yachts has been noted. Previously, 100-meter plus yachts were extremely rare, today around a dozen are under construction. This trend is evident in all sizes and particularly for 36-meter plus yachts. (1)
Custom yachts, which are entirely customized and generally built to order, are at the top of the pyramid of large-size yachts. Custom yachts are 40-meter plus in length, generally transatlantic and even transoceanic, and are built using steel and/or aluminum (compared with the smaller series yachts, which are primarily built using fiberglass).
Complementary services: a key success factor
The expansion of the large-size yacht market is also due to the major players, who have evolved by adapting to their clients’ needs.
Hence, one of the impediments to buying a yacht was the management required in its ownership: maintenance, repair, berth, personnel management, etc. The annual cost of all these services, in aggregate, amounts to about 10% of the acquisition cost of the yacht. In order to respond to this demand, some services companies were created with a view to offering clients a more or less complete management of their yacht. Certain groups even offer a fully integrated service, with Rodriguez Group recognized as a pioneer in this area.
(1) (source: The Global Build Report – Yachts Magazine).
(2) (source: 11th World Wealth Report published by Merrill Lynch and Capgemini).
construction or on order at July 2007. This is a 25% increase in three years.(1)
A targeted clientele that continues to grow
The large-size yacht market (24-meter plus) has benefited from sustained growth for more than ten years, sustained by wealth creation and the emergence of new fortunes in fast-growing economies such as Brazil, Russia, India and China.
This favorable development has been made possible by the typology and behavior of the clientele:
• a number of private financial wealth (with financial assets in excess of $30 million) has been estimated at more than 95,000 and this number remains high in relation to the number of yachts built worldwide. This number has increased by over 12% in 2006 and 36% over 3 years ; (2)
• driven by a strong global economy, total financial assets of wealthy people reached $37,200 billion in 2006, a 12% increase. Assets held by millionaires recorded double-digit growth for the first time in seven years ; (2)
• a commitment to affirm one’s independence in the face of economic cycles, by displaying very significant consumption to their peers, even in reputedly difficult times.
The success of large-size yachts and the open concept
The pool of potential buyers of large size yachts has significantly increased over the last ten years. Indeed, these yachts, which until recently were the exclusive domain of a specialized seafaring clientele, have now become very much mainstream, and in the process, become accessible to a much larger population. This evolution has been magnified by the range on offer from shipyards, the user-friendliness of yachts, electronic navigation aids and a very sophisticated marketing approach. Owners spend more and more time on their yachts, due in particular to new technologies which enable them to stay in contact
with people ashore when at sea. Motorized yachts, simpler to handle, have thus won an increasingly larger share of the market and now account for 90% of all new yachts built.
In the large-size yacht segment, this evolution was made particularly evident by a population segment that discovered a new form of premium quality leisure that may, notably, be enjoyed in an isolated environment or intimacy, even in the middle of summer at the most popular seaside resorts. Thus, for the world’s wealthiest people, the ownership of a yacht has become a “must”. In an already very favorable movement, the Open yachts segment has enhanced this phenomenon even further by taking advantage of qualities that coincide with the tastes of the target population: large open space, a particularly sporty line, high speed, and for the best builders, a high level of finish.
This keen interest remains strong, and has been proven by the real success of the new Mangusta 165’ Open.
More generally, a significant increase in large yachts has been noted. Previously, 100-meter plus yachts were extremely rare, today around a dozen are under construction. This trend is evident in all sizes and particularly for 36-meter plus yachts. (1)
Custom yachts, which are entirely customized and generally built to order, are at the top of the pyramid of large-size yachts. Custom yachts are 40-meter plus in length, generally transatlantic and even transoceanic, and are built using steel and/or aluminum (compared with the smaller series yachts, which are primarily built using fiberglass).
Complementary services: a key success factor
The expansion of the large-size yacht market is also due to the major players, who have evolved by adapting to their clients’ needs.
Hence, one of the impediments to buying a yacht was the management required in its ownership: maintenance, repair, berth, personnel management, etc. The annual cost of all these services, in aggregate, amounts to about 10% of the acquisition cost of the yacht. In order to respond to this demand, some services companies were created with a view to offering clients a more or less complete management of their yacht. Certain groups even offer a fully integrated service, with Rodriguez Group recognized as a pioneer in this area.
(1) (source: The Global Build Report – Yachts Magazine).
(2) (source: 11th World Wealth Report published by Merrill Lynch and Capgemini).