The Russian billionaires may be gone, and efforts to tame runaway inflation may be raising fears of a global recession, but you wouldn’t know it from the booming superyacht industry.
The Monaco Yacht Show that ended last weekend had a near-record 117 boats on display, with this year’s crop sporting names like “Shabby,” “Miss Candy” and “110’ Dolcevita.” The show seemed a world away from the war in Ukraine and the energy crisis crippling Europe.
Industry executives talked of insatiable demand that intensified during the pandemic as the wealthy decided that a boat of one’s own was an ideal way to escape lockdowns and infection. Even with pandemic fears easing, demand has remained strong. Just nine months into 2022, revenue at Burgess, one of the leading superyacht brokers, is up 20% on last year, putting it on course for another record year.
“Our clients are all very wealthy; they’ve always felt sort of bulletproof and impenetrable and powerful,” Burgess Chief Executive Officer Jonathan Beckett said in an interview on the sidelines of the show. “I think the one thing the pandemic did was make them feel vulnerable for the first time in their lives. They think, ‘life is actually fragile. I’m not immortal and I can afford to go off and do something really nice. Why don’t we do it now?’”
Massive demand made 2021 a record year for global sales of superyachts. Although that’s unlikely to be matched this year, sales are still 68% above a 13-year average, according to Fraser Yachts brokerage. Last year, 1,001 superyachts measuring 24 meters (79 feet) or more, including new-builds, were sold for €9.4 billion ($9.2 billion), according Kevin Bodington, founder and CEO of YachtBuyer.com. Sales so far this year stand at 567 for €4.2 billion, he said.
“The market is softening not so much for lack of demand but rather lack of supply,” he said. “The yards' order book is pretty much full but you can't scale overnight.”
Americans are driving the demand, more than making up for the absence of rich Russians. As of Aug. 31, owners from the U.S. accounted for the largest share of both the existing fleet and of new-builds, according to Superyacht Times. U.S. owners make up 23% of the global fleet of super-boats of more than 40 meters, followed by the Russians at about 9%. Other major buyers come from Greece, the U.K., Turkey and Italy.
For several years now, Russian oligarchs have been among the most high-profile buyers of the vessels, putting this traditionally discreet industry in the spotlight. But following Russia’s invasion of Ukraine in February, authorities have immobilized or seized superyachts worth hundreds of millions of dollars tied to Russian billionaires targeted by sanctions in Tuscany, the Riviera and all the way to Fiji.
The absence of the Russians, geopolitical tensions and rising energy prices—although part of the conversation at the show—seem to be doing little to disrupt surging sales and charter bookings.
Sipping a beer sitting alongside ‘Phoenix 2,’ a 90-meter yacht built in 2010 that was on sale for €129 million, Beckett said his company sold about 10 superyachts of more than 70 meters this year.