SYI London 2020: The superyacht market surge
Yachting has enjoyed remarkable growth over the past few years. It is one of the fastest growing luxury goods markets, according to Fredrico Bazzani of Deloitte Yachts.
The compound annual growth rate (CAGR) of the superyacht market since 2013 has reached 12.2%, compared with the overall luxury market growth of 7.8% – according to Deloitte figures. “Yachting is one of the strongest growths in the entire luxury yacht segment,” Bazzani told delegates at Superyacht Investor London, “The trend is very positive.”
This growth marks a return to the pre-global financial crash peak, following a market downturn which started to rebound in 2014.
The growth is not expected to diminish any time soon. Only 7.2% of billionaires worldwide own a superyacht, and despite the growing number of Ultra High Net Worth Individuals (UHNWIs), buyers are trending towards the smaller end of yachts on the market. The 30m-50m yacht segment saw the largest growth in sales figures since 2013.
Sea-change in China
Despite many in the market over the past five years looking at China as one of the biggest potential growth markets, the interest in the region has been slow to convert to sales – that is despite the country having the largest number of billionaires of any market.
“Only 10% of the market composed of Chinese consumers despite massive GDP [Gross Domestic Product] increase,” said Bazzani. “It is still emerging, and its impact is not substantial.”
However, Both Bazzani and the market overall remains hopeful about China’s growth potential. “You can expect this to change over the next few years,” concludes Bazzani.
Three key challenges
To maintain the impressive market growth, Bazzani posed three key challenges to the room to overcome.
Firstly, he recommends a more proactive marketing strategy, asking yachting professionals to “not wait for clients to come to us,” and instead take a more strategic targeting approach on potential buyers and help bridge the gap with other luxury sectors.
Second, Bazzani asks the yachting industry to adopt a more customer-centric approach, with a marketing strategy focussed on products as well as customers, hopefully increasing market penetration.
Finally, he concludes by prompting the superyacht market to remaster its current operating model and achieve “operational excellence and reduce project complexity.”