HSYachts2016Feuilleteur - 11

2 Friday 2nd September 2016 special issue le marin InternatIonal context market enduring enthusiasm I The yachting industry, which boomed in the early 2000, is particularly resilient to the financial and geopolitical crises. Yacht orders, though there have been peaks and troughs, still remain high, which is primarily to Europe's benefit. a totally different level of income. And on this point, the industry can be reassured. The base of very wealthy clients who can afford a yacht for an estimated value of $10 million is growing steadily. The global orderbook of yachts by length 900 800 700 600 500 400 300 47 97 54 87 67 84 66 75 70 76 146 134 139 142 148 49 81 138 231 228 220 212 201 219 222 226 232 200 236 248 256 257 2010 2011 2012 2013 2014 2015 2016 54 83 135 room for Improvement 200 100 0 > 70 m 50-70 m The order count is 700 vessels (from 78 foot yachts onwards), 500 for over 98 foot units. All in all, yacht orders at the beginning of every year, have been essentially unchanged for 6 years. Only the number of active yards in this highly demanding market, both in terms of technical expertise and treasury, tends to drop as the years go by. This is the case in Italy, Germany, France or the USA, with Trinity Yachts up for sale and Palmer Johnson relocating its entire production to the Netherlands. The prestigious and lucrative world of yacht building 40-50 m 30-40 m 24-30 m - although yards are not necessarily deriving the most benefits -, is an at-risk activity where trust always goes to the most experienced party. A growIng number of ownerS In this game, Europeans are the winners and Americans are the losers. The percentage of yachts made in Europe is currently 78%. Only Taïwan, with a number of yards commissioned by American contractors, or the United Arab Emirates, where Gulfcraft successfully took to Source : Boat international/Market intelligence the market of fast yachts, that is already quite busy, are resisting the European supremacy. Based in the State of Washington, on the western coast of the USA, Christiensen admits that without the Jones Act, a legal base for the American maritime protectionism, the shipbuilder would not be a match to European competitors. Whereas the cruise industry is focused on the global demographic growth within the middle classes and an increasingly sophisticated cruise liner offering, the yacht industry follows the same principles, though on In its annual study on yachting and the Ultra High Net Worth - the global elite whose personal fortune starts at $30 million -, firm Camper Nicholsons, partnering with Wealth X consultants, counted up 211,955 of these multimillionaires in 2015, 2,405 of which are actually billionaires. The number is up by 680 compared to 2014, with 80 additional billionaires, making for a total fortune of $29,800 billion. This is more than enough to afford a yacht, a superyacht and even a megayacht. These extremely wealthy people, based by more than 90% in North America (75,195 individuals for 10,300 billion), Europe (61,095 for 8,200 billion) and Asia (47,550 for 7,200 billion), are a target for yards and the realm of brokers and designers trying to convince them that owning a yacht is a safe bet in the world of great luxury. The room for persuasion remains significant. Owning a yacht is a given for wealthy Americans, but it is not as obvious for their German or Chinese counterparts. Americans are the primary owners and investors: 33% of the biggest global fortunes are American and 33% of yacht owners are American. British and Italian are greater yacht enthusiasts and they represent 11 and 5% of the fleet respectively, although the British only represent 5% of the biggest global fortunes and a little less for Italians. On the other hand, the Germans (9% of the biggest family fortunes) and the Chinese (5%) are not in the owners ranking. The budding industry, which is looking to grow, is counting on this economic and cultural ground. Frédérick AUVRAY the swift boom of megayachts The growth of the megayachts fleet Monte Carlo Yachts The difference between a wealthy and very wealthy owner can be determined by the size of their yacht. These differences are quite substantial. Whereas the crisis of 2008 severely impacted the 78-98 foot segment, the megayacht segment is thriving. Currently, the fleet includes 166 units over 229 feet in length, 42 of them over 328 feet. Though it only makes for 3% of the fleet of yachts over 98 feet currently in operation, this is the most dynamic - and certainly the most lucrative - segment in the ship building and repair sector. The megayacht trend is only recent: 70% of this specific fleet was built from 2000 onwards, and 40% since 2010. Between 2010 and 2016, megayacht deliveries have been doubled compared to the period between 1970 and 2000. If we take a closer look at the figures, nine megayachts of over 328 feet in length were delivered between 2000 and 2010, and 21 units between 2010 and 2016. In the section below, in the 229-328 segment, the same trend can be observed: 36 units were delivered between 2000 and 2010, against 49 since 2010. In the next three 60 49 50 36 40 30 20 16 10 0 The base of very wealthy clients who can afford a yacht for an estimated value of $10 million is growing steadily. 21 4 <1970 8 7 8 1 3 4 1980-1990 1990-2000 1970-1980 above 100 meter years, the fleet will grow with 56 new units, with 11 over 328 feet. Also, the proportion of superyachts in the overall orders for 98 feet yachts is steadily increasing. It is currently at 13% of the total orders. greAt refIt requIrementS The requirements for megayacht maintenance facilities will grow. Yards building megayachts are the first to offer refit services. This is the case for German yards Lürssen and Blohm + Voss, and UK yard Penndenis, that has now exclusively turned to refit. The demand is so great that new maintenance yards 9 2000-2010 2010-2016 above 70 m and less than 100 m are looking to invest in the segment, in particular in the Mediterranean area. Whereas Amico in Genoa is already looking to develop after accommodating the Queen Miri (300 ft), and Napolitan yard Palumbo is now expanding its network of refit yards to the Canaries, focus is now on the dry dock of the former La Ciotat shipyard. Allocated to German yard Blohm + Voss, much to Composite Works's dismay, which operated on the site for 18 years, the modernised dry dock will have a 660 tonne gantry crane and a 200-long dock that can be extended to 335 metres. F. A. essentIal class rules T he fairly recent use of classification societies has become standard practice in the yacht industry. However, this does not apply to small units used for strictly private purposes, which still make for a significant proportion of the fleet. For others, and commercial yachts in particular, the classification society provides two types of services, which have become essential. First, with the class rules, owners can warrant that their ship was built in keeping with best practices, which is essential safe-conduct for insurance companies. Then, these private societies are authorised by the State of registration to certify that the yacht applies the international regulations regarding safety (Solas), pollution prevention (Marrpol), safety manage- ment (ISM) and security (ISPS), and more recently, labour conditions (MLC 2006). The levels of obligation vary according to size, with gross tonnage thresholds of 300, 400 and 500. In the classification market, the Lloyd's Register is in the lead with 777 existing ships and ships under construction for a total tonnage of 83,740. Next in this ranking, established in March 2016 by IHS Fairplay, are US company ABS (372 ships for a tonnage of 18,709), DNVGL (83 ships for a tonnage of 12,759), Italian Rina (249 ships for a tonnage of 11,641) and French Bureau Veritas (124 ships and a tonnage of 5,540). All five companies cover 70% of the potentially classifiable fleet in ship numbers and 86% of the tonnage. F.A.

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