The superyacht sector is flourishing both in terms of new build orders and second hand sales. Yet there is a looming challenge for the industry: how to attract the next generation of buyers and demonstrate yachting is a past time for all generations.
The latest Monaco Yacht Show, in September, saw yacht owners, future yacht purchasers or charterers, and their advisors convene in their masses at Port Hercules. This year 121 superyachts were on display, collectively worth $3.5billion. Of those, 42 were making their worldwide debut and 45 per cent were less than two years old.
According to reports there was a positive upbeat atmosphere reflective of the strong new-build market, which means orders for superyachts (longer than 24 metres) have hit record highs with more than 500 currently being built in shipyards around the world. This was also the case in the buoyant second-hand market which continues to benefit from the long waiting times for new build orders.
Aside from the yachts, the residing theme among this year’s participants was how to win over the next generation of superyacht owners. A study led by the International University of Monaco in association with the Italian shipyard Rossinavi, who is one of the leading builders of custom super yachts, researched the likes and dislikes of the emerging millennial yachting market. In their report Rossinavi highlighted technology, innovation and the environment as priorities, alongside their love for adventure and sports over mahogany and cigars. Furthermore, it was found that luxurious comfort is less important to millennials than owning something new and surprising.
Evidence that the industry is adapting to meet this new demographic is already visible. Last year the Monaco Yacht Show introduced a ‘Tenders and Toys’ arena for the first time and this year it was expanded. The arena boasted fast chase-boats, the latest sport tenders which are used to service yahcts and provide entertainment, full carbon e-bikes, an electric surfboard, and even a remotely operated underwater vessel. Offering a younger clientele new experiences and an instagramable thrill-factor.
To house all these new toys, there continues to be a rise in the number of support vessels in operation. These vessels allow owners to carry everything from submarines to supercars on a second ship and effectively “declutter” their decks. Dutch shipbuilder Damen has become a leading name in this niche with its Damen Yacht Support vessel range. “Our clients want to go to exciting new destinations with less established superyacht infrastructure and they want to have more fun with larger tenders, helicopters and submersibles. They also want to take more staff, guides, pilots and security personnel with them. The game changer is the leap forward in capability that they need, but at a much lower cost than a larger yacht. We’ve branded this service Smart Stretch, says Damen Product Director Mark Vermeulen who saw the launch of their latest vessel Game Changer in February last year.
There has been a particular demand among owners of the younger generation for explorer yachts, according to Anita Griffiths, senior manager of yachting and aviation at Equiom. Explorer yachts are specially outfitted vessels capable of sailing to the farthest ends of the earth and the onus is on providing adventure.
We’re also seeing advances in green technology in the marine industry with a push toward eco-friendly superyachts. One of the yachts unveiled at the Monaco Yacht Show last year, the Porsche GTT 115 yacht, caused quite a splash. Designed by Studio F.A. Porsche and built by Dynamiq, the 35 metre yacht is the first hybrid in the GTT series.
Despite this evidence of innovation and adaptation in the sector, many are still concerned that buying a yacht is not top of the list for the next gen’. One of the challenges for the industry is that for many potential buyers in this age range, the perks of chartering without the responsibilities of ownership are still a big draw. Chartering enables them to switch from the Mediterranean one week, to Antarctica another; fulfilling their thrill seeking expectations.
“The increasing need for the industry is to cater to superyacht owners of all generations” says Griffiths. This poses both a challenge and an opportunity for those in the sector to provide the right balance of service. Charter has always been the first step to ownership and that might not change. It’s possible that the more this generation charters the more likely they’ll buy into the dream at a later stage.
WhatsApp legal advice
Some advisors are already seeing millennials among their client books. James Jaffa, a superyacht lawyer at Jaffa & Co, the London-based law firm specialising in superyachts and private aviation has seen an increasing number of thirty somethings. He describes a recent wish-list for a yacht as “it must be able to operate at 35 knots so that it’s possible to start the day in St Tropez and have lunch in Corsica”. For him though, the biggest difference between the new generation and the older one isn’t their wish-lists but the way in which they want to do business. “They contact their advisors via WhatsApp and they expect responses within thirty minutes” Jaffa adds.
Want advice? Get a broker
What advice does Jaffa have for the younger generation buying their first superyacht? “Get a good yacht broker. Somebody who knows the product and can advise on a yacht to suit your lifestyle, family, where and how you want to use her. Surround yourself with knowledgeable people. So you as an owner can enjoy the process, leave the hard work to your advisors” says Jaffa.
Sir Ian Collett, a director at Ward & McKenzie Superyacht Consulting, is also seeing “an increase in the number of younger clients buying superyachts” and confirms that “they are certainly interested in toys and the like”.
Everything for the ‘gram?
While the number of millennial buyers is on the rise, the sector as a whole is in agreement that more needs to be done to appeal to the instagram generation. “This is something which has been repeated by commentators at recent superyacht conferences”, says Collett. For now, the advice is to remain alert and continue to adapt and innovate to meet the next generation’s needs, whether that will be enough, only time will tell.