For the better part of this month, I've been poring over the second edition of The (Super)Yachting Index, the annual analysis of what's going on in the megayacht business, as compiled by Camper & Nicholsons and The Luxury Institute, a research organization focused on high-net-worth individuals.
Last year's edition, the first of its kind, contained some pretty eye-opening information regarding the number of superyachts in existence (3,800), the size range most fall into (100 to 130 feet), and how much the market had grown over the prior two years (1,000 new launches).
The current edition provides some equally interesting information, notably that despite the economic collapse in the fall and early winter of 2008, last year saw an "unparalleled level" of megayacht sales and charter, as Camper & Nicholsons CEO Jillian Montgomery and Marketing Director Laurent Perignon wrote in the foreword. In fact, they theorize that if global conditions had remained stable, 2008 likely would have eclipsed 2007 regarding the business value that was generated.
According to the report, one thing hasn't changed: Yacht owners are still predominantly American. Italian, Russian, and Greek buyers rank highly, too, and the super-size superyachts that keep grabbing headlines are mostly commissioned by Middle Easterners.UPS AND DOWNS
So what are some of the statistics? In the brokerage realm, 330 yachts measuring 80 feet and larger sold in 2008, an increase of 15 boats over the prior year. Even with that five-percent increase in overall volume, the total dollar value was actually down, by 20 percent, adding up to $2.6 billion.
How could it be down when more yachts sold? Probably because sales slowed late in the year. It could also be related to the increase in listings in the second half of 2008. The Index found that new listings rose to 1,000, compared to 500 in 2007. Both of these scenarios are logical when you consider the banking crisis and economic problems exploded last September.
In the charter realm, nearly 1,000 megayachts were available for charter as 2008 drew to a close, a sizable jump considering 830 were available in 2007. Montgomery and Perignon believe that at least part of the increase can be attributed to owners of newly delivered superyachts; in fact, they determined that one-third of new launches entered the charter market.
THE DETAILS
Speaking of new launches, the Yachting Index couldn't be complete without also taking a look at new construction. In an attempt to make the statistics more accurate, Camper & Nicholsons' team examined signed contracts, versus the number of yachts on shipyards' order books. It was a wise move; if you've ever looked at the order-book stories written by several of the yachting magazines, you know that some shipyards can and do overstate what they're going to build, counting projects they hope to construct on spec. A signed contract is therefore more accurate.
Now, Camper & Nicholsons acknowledges that most signed contracts are in the 100-foot-plus realm, so it had no choice but to rely on order-book information in addition to contracts for the 80- to 99-foot realm. Regardless, in 2007, the average length of megayachts was 117 feet, while last year it grew to 123 feet. If laid end to end, the total deliveries of 100-foot-plus yachts would measure more than 32,800 feet. To put that figure into perspective, it's about two and a half times the height of the Empire State Building.
As to where the yachts were being designed, just like in 2007, Italy led the list – for both fully custom and semicustom yachts. Of the 77 custom megayachts delivered worldwide last year, 18 came from Italian drawing boards. Only UK designers came close, with 15 designs being built and delivered – although they ranked first in terms of the total length per company, at nearly 3,380 feet. When it came to semicustom megayachts, Italian design firms were responsible for 70 yachts totaling 12,556 feet. U.S., Dutch, British, and French designers rounded out the top five.
One thing that hasn't changed: Yacht owners are still predominantly American. Italian, Russian, and Greek buyers rank highly, too, and the super-size superyachts that keep grabbing headlines are mostly commissioned by Middle Easterners.
As to what's occurring now and may happen by the end of 2009, what I find interesting about the (Super)Yachting Index is that its findings are in line with those of other far more publicized reports. For example, the 2009 World Wealth Report, published by Capgemini and Merrill Lynch, estimates that even though the wealth of high-net-worth individuals declined 20 percent in 2008, it will soon bounce back and grow at an annual rate of eight percent, achieving a new high by 2013.
Toby Walker, Camper & Nicholsons' sales director, says that despite the megayacht business having undergone a tremendous change in 2008 – "probably an irreversible one" – there are opportunities for buyers and charterers alike. As he put it, "The immense joys and privileges derived from being afloat are still the same."
