Yes, we Cannes
There is nothing quite like the French Riviera at this time of year. In Cannes, Vieux Port (pictured) and Port Canto this week welcomed more than 600 exhibitors, 650 boats and 54,000 visitors to the Cannes Yachting Festival 2022. The mood was extremely positive.
For proof, look no further than the Ferretti Group. Since June 2022, the yard has sold yachts worth €300m ($300.09m), compared with €100m for the same time in 2021. This brings its total order backlog to $1.3bn.
“Beautiful boats produce extraordinary results and vice versa,” said Alberto Galassi, CEO, Ferretti Group. “This exceptional growth, in a truly magical year for us, is amazing but doesn’t surprise us, as it is the fruit of high levels of investment, hard work and careful planning.”
Sylvie Ernoult, director, Cannes Yachting Festival says that it is results like these that show off the health of the current market. “The entire industry is getting crazy in terms of demand, development and the economic results,” she told Superyacht Investor (SYI). “This shows the strength of the industry as a whole.”
One of the key trends of the festival, one that Ernoult says is driving the industry forward, is its innovation. “The creativity of some of the exhibitors we are seeing this year is beyond anything we have seen before. New technologies, build materials like carbon and cleaner propulsion systems. We have 140 new exhibitors this year, which shows the industry’s evolution and its creativity.”
This innovation is in part, she says, joined by the focus on making superyachts more efficient and sustainable. The festival had allocated several sections dedicated solely to electric vessels and created a ‘Green Route’ to display exhibitors with more sustainable advancements than in previous years.
There were also discussions amongst attendees about the challenges the industry faces. Considering the current conflict in Ukraine and the loss of the Russian market due to sanctions, some insurers have found it increasingly difficult to get policies up and running. “Pre-sanctions, finding a buyer’s [Ultimate Beneficial Owner] UBO wouldn’t necessarily come into consideration until further down the line,” Michelle Van der Merwe, superyacht account manager, Pantaenius tells SYI.
“Now, we don’t move forward unless we can first determine who the UBO is. This obviously slows the process down, but necessary precautions to take of course.”
The loss of the Russians in the market was a fear for some brokers earlier in the year, with companies like Imperial Yachts and its CEO Evgeniy Kochman being added to sanctions lists. “I don’t think we have felt the impact of losing the Russians at all really, the American and European market is still strong,” says Monaco-based broker James Lloyd, Edmiston.
“We have been conscious of not involving ourselves with some individuals since the Russian invasion of Crimea, so the new sanctions were never poised to affect us really.”
Richard Shead, sales and marketing manager, Burgess agrees. “Charter has remained more or less the same and if anything, sales have gone through the roof, being more consistent throughout the whole year. The market still seems strong as ever.
“What I do think will be more of an issue in the future, in part caused by the increase in sales, is the lack of available inventory,” he adds.
The prospect of strains caused by lack of inventory isn’t exclusive to brokers, however. Some shipbuilders have found issues with finding supplies for new build yachts. Problems like this and supply chain problems have led to large backlogs at some yards.
Ipek Tanir, marketing executive with Turkish superyacht builder, Numarine tells SYI that the company found a way to tackle this head-on. “To avoid scarce supply of materials and equipment etc., our CEO decided to buy any and all parts we saw and build our inventory that way.” No nut or bolt was spared.
“Decisions like this make the difference. We have delivered all of our recent projects on time and are well on track to deliver our next two projects on time too,” she says.
The looming prospect of a global economic slowdown was not worrying attendees. Peter Harrison, sales director of British-based brokerage, Helm (which was acquired by Borrow A Boat last year) was particularly upbeat: “The superyacht industry is definitely a good hedge against potential recessions. And usually, history tells us that the rich get richer in times like that,” he says.
After all the challenges faced since the last Cannes Yachting Festival, Ernoult is also optimistic. “We are taking advantage of the wave of success in the industry. Of course, we will continue riding this wave into the next year. I am a positive woman. There is so much demand. And I think there are so many positive things happening, driving this industry, that it’s not going to suddenly stop for sure.”