Cannes: Insights from the casting couch and market mood

opinion

by Rob Hodgetts

16 September 2024

Superyachts docked at the Cannes Yachting Festival.

Doing his best to look calm, he shuttled up and down the stairs between the two clients. It was a popular boat and the show had generated a lot of viewings. Both parties had visited three or four times. Now, at the end of the week, they were both writing offers, one sitting on the sun deck and one in the saloon.

“It was unusual, but that’s the magic of a boat show,” says Tim Langmead, a broker with Fraser Yachts, as we shot the breeze one sunny morning before the pontoons filled up in Vieux Port at the Cannes Yachting Festival.

The story is from a few years ago but demonstrates how shows can “raise the buying temperature” and “create a certain urgency” in decision making.

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Most of the time, though, Langmead likens the role of a yacht broker to an out-of-work actor, toiling ceaselessly behind the scenes, attending endless castings, hoping eventually to land the big one.

“I’ve done 18 years of Cannes boat shows, so to try and guess what’s going to happen is probably a big mistake,” he says. Putting in the work and being “eternally optimistic” is the key.

“People say a lot of things at these events,” he adds. “‘I’ll be there, I’m going to buy this’, and then they don’t turn up. Or they do turn up and they look at something completely different. They get their heads turned by the gold paint job rather than the normal white boat.

“I’ve sat with clients as they’ve signed the contract and three weeks later they’ve backed out. So it’s a very funny business. Each one is completely different. The market does its own thing. We’re just trying to glue pieces together to make a deal work.”

At least in Cannes there is a “good level of qualified interest” with clients and brokers specifically arranging to view yachts and fewer “fender kickers” than other shows, says Burgess sales chief Richard Lambert while sheltering from the sun under a parasol in the brokerage section of Port Canto.

Ready to buy

So what’s the general feeling around the market?

According to Langmead, the larger end of the market is “more solid”. “We’re down about 15% in terms of units in the 24-30m sector,” he says. “The 40m plus sector has been much busier than even the previous peak years. But you do need that variety of boats to have a sort of healthy business.”

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Henry Smith, partner and sales broker at Cecil Wright, has a similar feeling at the top end. “Appetite is definitely there for the really big stuff,” he says, stopping for a yarn on the superyacht pontoon while waiting to meet someone off a boat.

“There are people around with the money ready to buy. As Elon Musk or Jeff Bezos become seemingly infinitely wealthier, there are a huge number of people behind them who are incrementally increasing their wealth, a lot of whom we don’t even know of yet.

“So, yes, the cost of these boats is going up, but it’s not going up as quickly as that level of wealth is going up.”

Realignment

For Lambert, it has been an “interesting” year. “It started off a little bit slow, but we’ve been very busy in the summer and we’re quite confident towards the end of the year,” he says. “So although it’s been a bit stop-start the trend is in line with 2023. It’s a realignment of the post-Covid boom, a more stable level of trading.”

Each business has its own thoughts on the market mood and its own position in the industry.

For Marcello Maggi, president of Wider Yachts, a number of economic and geopolitical factors are impacting businesses.

“In my opinion, the market is stopping a little bit,” the industry veteran tells us after giving a presentation on new models onboard his company’s WiderCat92. “It’s due to many factors. The [US] election, wars, very high interest rates. Financing a boat like this can become expensive. I hope, especially in America, that lower interest rates will bring people back to yachting.”

Ali Onger, chief commercial officer of Turkey’s Sirena Yachts which builds boats from 16-26m, thinks the market is “getting softer, especially in America”. But chatting over canapes in a function room at Vieux Port he adds: “On a yearly basis, we’re building approximately 50 boats. There is interest. The lead times are actually better than before. I think we’re still at a good point.”

Sarp Yachts’ shipyard manager Sabahattin Elkin Yildirim think responsible, well-run businesses will continue to thrive. “The market is a living organism. Money just moves to different places. But it is not going down, it is going up,” he says over drinks in Cannes.

Overwhelmed

One man with a smile on his face is Vasco Buonpensiere, co-founder and CEO of the Cantiere delle Marche shipyard in Ancona, Italy. Surveying the buzz surrounding his explorer yacht Maverick docked in front of his stand in Vieux Port, the genial Italian says, “Cannes always brings us good vibes and this year is particularly vibrant for us.

“We’re overwhelmed, we weren’t expecting such interest in this boat. It’s humbling. I’m very happy.”

Launched in April, the 44.3m Maverick was built for German Tom Schroder, the majority shareholder in Cantiere delle Marche. The yacht, with its fold-down A-frame crane and ice protection around the waterline, will take Schroder and his family, including four children, on a seven-year voyage around the planet, engaging in social causes for children with disabilities along the way.

Bling-bling

According to Buonpensiere, the yard has 20 boats under construction and has sold 12 boats in seven months.

“In general, I hear there’s a little bit of slowdown, which is also normal after 2020, but in our case, it’s exactly the opposite,” he says. “Starting from January, it’s been an incredible boom.”

Buonpensiere says recent analysis of 16 of their used boats sold showed an “average depreciation of plus 1.8%”.

“It’s very reassuring for the clientele,” he says. “In times of crisis, you’re not going to go and buy the bling-bling thing, you’re going to go and buy the thing that you know. The passionate ones will keep on buying the boats, but they will buy from a shipyard with very strong values and DNA like ours.”