After a buffeting during the global financial crisis, the superyacht industry appears to be charting a course towards calmer waters. Yacht builders and yacht brokers attending the 2012 Dubai International Boat Show are in a confident mood for the first time in 3 years, as the industry appears to be coming out of the doldrums.
The global financial crisis that began in 2008 delivered a body blow to the makers of luxury yachts, with orders for superyachts especially hard hit and a slew of builders going out of business.
But yachting industry watchers say that although there is no overall marked upturn, the rate of decline is slowing, and in some sectors has turned the corner and is back on the up.
“I think the market has stabilized, and we can see that the majority of the key players today are seeing good activity. I’m optimistic for the next five years,” said Martin Redmayne, the chairman of The Superyacht Group, the leading industry analyst. “The fleet has grown and will continue to grow, but at a more stable pace.”
Tim Thomas, the editor of Boat International, agrees. He said the magazine’s “global order book for 2012 is down again. This is the third year of decline in the number of yacht projects under way or on order”. However, Mr Thomas added: “The descent has slowed to just under a 3 per cent decline year on year. And the industry appears to be getting some traction.”
A record number of member companies from the Superyacht Builders Association will be exhibiting at this year’s Dubai Boat Show, according to the event organizer, Dubai World Trade Centre.
The show runs from Tuesday to Saturday at the Dubai International Marine Club, with 750 exhibitors from more than 40 countries billed to attend. The organizers say they expect more than 25,000 visitors.
The latest edition of Mr Redmayne’s Superyacht Annual Report, recognised as the industry benchmark, shows how significant the industry is to the world economy.
Latest figures showed the superyacht market was worth €24 billion (Dh115.6bn) in 2010, with more than 6,000 companies operating in the industry, the report said. Jobs created by superyachts were worth €5.99bn annually, with up to 250,000 land-based jobs, and 33,000 crew employed on yachts.
The report said the superyacht industry prospects for this year were positive and noted that although the world order book in number of vessels had diminished, as had the number of yards building vessels today, the number of meters in build, or total length overall (LOA) – a traditional measure of prosperity in the industry – had grown by about 3,500 meters LOA.
In 2010, there were 99 shipyards building 453 yachts totaling 20,772 meters LOA; today the report is tracking 79 shipyards building 423 yachts, totaling 23,371 meters LOA.
“This suggests that we have lost some short-term players from the market, but we are seeing stability and growth at the existing yards, which should be good for the long term,” the report said.
Mr Redmayne added: “It will be interesting to track what happens over the next 12 months and if the number of yards grows or reduces as deliveries are made this year.
“We are seeing signs of growth and stability, and even though some companies have definitely felt the pain of the past few years, our industry revenues and fleet increase should point towards a prosperous future.” He continued: “With 34% of the current order book made up of new orders signed in 2011, it suggests a good market position.
“Yes, the economic shifts in the world economy are still happening and, yes, governments are squeezing tax revenues, attempting to reduce their domestic debt piles and subsequently targeting the wealthy, but there is definitely a clear position in the HNWI [high-net-worth-individuals] sector, that the rich have got richer. We just need to ensure that yachting, and the opportunity to invest in this emerging industry, delivers a positive message.”
Source: The National