Charter market holds firm as ‘new generation’ seeks fresh horizons

opinion

by Rob Hodgetts

25 October 2023

Superyacht Legend is a popular choice for Antarctica charters. Photo: Christopher Scholey.

The superyacht charter market appears to have held firm in the face of strengthening headwinds this year as a “new generation” of clients take the industry in a new direction.

The comedown from the Covid peak, the outbreak of war in Ukraine, leading to some companies losing significant Russian business, and the global economic downturn have put the yacht industry on alert.

But some brokerages have reported robust charter figures, suggesting the appetite for yachting remains strong.

“Generally, this year has been very positive,” says Charlie Birkett, co-founder and CEO, Y.CO. “We started with a very cautious view but suddenly by halfway through Q2 we were well up on our numbers and it was probably one of our best charter seasons ever.”

‘Guarded’

A large number of last-minute bookings helped swell Y.CO’s charter figures, while sales of several high-profile yachts this summer have given Birkett cause for hope, albeit tempered now by the conflict in the Middle East.

“I genuinely believe there is another generation of yacht buyer coming in now,” he says. “We’ve had the pleasure of working with the self-made, dot com-type people for quite a few years but there’s another generation below them now. But they’re not buying one yacht, they’re buying several yachts and operating support boats, subs and helicopters.

“My honest opinion is that it will continue unless something really drastic happens. The sad situation in Israel and Gaza means we’re watching the markets quite closely. I think we’re all very guarded about what might happen.”

READ: Covid fizz subsides in superyacht sales market

The 50m Riva motor yacht Fifty was sold by Y.CO. Photo: Alexis Andrews.

‘Carpe diem factor’

Raphael Sauleau, CEO, IYC has also seen strength across all divisions, including charter, but senses a “normalisation” of the market and says there has been a softening in sales compared with the Covid era.

“We’re just coming out of two-and-a-half years of craziness in yachting, everyone was selling yachts and it was like Christmas Day every day, almost,” he tells Superyacht Investor.

READ: Why amped-up asking prices risk ‘stagnation’ and ‘frustration’

“It was relatively unexpected initially, when the pandemic kicked in, but after that it went crazy. It must have been the carpe diem factor, together with the stock markets being super volatile so everyone had very good years.

“But we see a shift in the market, especially in sales where we were in a very strong sellers’ market, now we’re in a buyers’ market so we’re going to see some prices being reduced.”

‘Unique’

Sauleau believes the influx of people and new money into yachting during the recent boom times could help maintain growth, despite geopolitical turbulence.

“The appetite for yachting is still here because the charter market is still strong,” he says. “A lot of people realised yachting is actually a wonderful way of vacationing.

“They also realised, to some extent, the prices for chartering are pretty close to five-star hotels around the world so when you go with friends they realised yachting affords them something which is unique.”

Superyacht Legend and helicopter in Antarctica. Photo: Shelton DuPreez.

Tim Johnson, CEO, TJB Super Yachts has also seen charter volume increase this year – by about 20% – but he thinks the average spend is trending lower.

“The condensed wealth of the very wealthy is that much more than it was previously so spending €150-200k on a yacht rental is neither here nor there,” he tells us. “There are a lot more of those charterers out there than ever before so that’s great for yacht owners.

“But generally, people are being a little bit more conservative, so rather than spending €120,000 a week it’s coming down to €80-90,000 a week.”

‘Interesting season’

Birkett added: “Charter-wise, yachts above 50m (115ft) with a good, solid crew will always find a charter, because there isn’t enough supply to meet the demand in the peak months.”

However, Sauleau warns owners that the raft of new boats ordered in the boom times is now hitting the charter market and could make competition fierce for some owners in the best weeks and locations.

“We’re going to see an interesting season ahead of us. The message out there is to make sure your charter week is properly priced and you’re not being too greedy because the competition will be very strong,” he says.

Superyacht Legend with submersible in Antarctica. Photo: Thierry Ameller.

‘Experience-hungry’

A reduction in age of the average superyacht owner or charterer – from 55-65 to more like 45-55, according to Sauleau – could also be contributing to a shift in charter destinations, away from the traditional hotspots of the Caribbean or the Mediterranean.

IYC reported a “notable increase” in South East Asia bookings for winter 2022-2023, accounting for 7% of the total, with uplift also in the South Pacific and Indian Ocean, representing 12% of the total.

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“What we’re seeing is that a lot of yachts are going off the beaten track,” says Birkett. “Owners are using their yachts as platforms for adventure, taking their family and friends to experience the Antarctic Peninsula, on heli-skiing or diving expeditions, or even to the Northwest passage, and with charter rules relaxing in some of these places, this is opening it up on a whole new scale.

“As an example of this, we have the 77.4m Legend which has chartered extremely successfully in Antarctica for a number of years and is already booking up to 2026.

“While the Mediterranean and Caribbean business will always exist, the demand for high-octane, experience-focused travel really is there, and we’re seeing an interesting flow-through of experience-hungry clients that want to do more than spraying Champagne over each other in St Tropez and are asking us what else it’s possible to do on a yacht.

“And our answer is always the same – pretty much anything.”