Yachting Industry’s Sea Change Amid the Credit Crisis
According to the appearance of the newly released mega yacht orders books and the vast attendance figures at the Monaco Super-yacht Show, it is easy to disbelieve that the social elites are not affected by the economic downturn. Actually, the super-wealthy have also become vulnerable and have begun to cut back on spending, as they are worried about their declining portfolios of investments. In the category of luxury are other categories such as luxury automobiles, watches that are supreme and similar. For boats, they seem to be affected in some way in comparison to the same time last year.
A recent survey conducted in America has revealed that a recent study in the U.S. shows that Americans are cutting down on purchases of expensive goods. This is especially true for the wealthy. For example, the owner of a fourteen-guest, six-stateroom “Alibella” 50 meters (164 feet) luxury yacht is willing to offer a reduction of ten million euros to buyers who are eager to complete the deal within a matter of 30 days. “Arabella” is regarded as a modern-day luxury yacht that is in a class of its own, with top-of-the-line finishing and an air-launch pad for helicopters. The price cut reduces the price of the vessel down to 24.5 million Euros. It is one of many mega yachts which have seen their prices drop due to the escalating U.S. subprime mortgage crisis, which quickly extended beyond its borders and even triggered the recession in the economy. It is the case that there are the most amount of second-hand boats available today at significant discounts.
Of petrodollars and oligarchs
It is not surprising that in recent times, the most important clients who have signed contracts for the vast majority of custom-designed watercraft have been Russian oligarchs and Arabs from oil-producing Gulf states. These have been responsible for 18 percent of all new mega yachts purchased. The evidence suggests that those in the American and European higher class, as well as the Indian as well as Asian counterparts, have adopted an esoteric approach and have stayed clear of expensive purchases until the global economy gains its vital momentum.
Size is important.
Its size boat has an effect in relation to the segments which have suffered most in these challenging times. The vendors say that they expect sales to decline in the lower part of the market, as the majority of small and midsized yacht owners bought their boats with credit and others secured by residential properties. In many cases, the value of these loans is now more significant than the value of the asset. However, the superyacht industry, which is not dependent upon financing, is more robust than it was before. The figures published by Camper & Nicholson, an international brokerage firm that deals in yachts which showed that the number of new orders for superyachts increased by 18 percent in the year 2008. Today, the super-yacht average exceeds the 190-foot mark (60 meters), while some are are as large as up to 450 feet (137 meters).
Modesty has replaced ostentation in the present.
It is now considered rude to talk about your wealth, including the floating things you own. It’s a bit offensive in a time where the majority of people suffer from the financial meltdown. The splurge, which is considered today to be a sign of the desire to be greedy, as well as anxiety about the unknown of the world’s markets, has slowed, creating the “look at me/mine” assertion a current social taboo.
In anticipation of the return of the high-flying oceans
After the dust settles, the yachting industry will be regaining its appeal but in a more secluded manner. It is expected that the “nouveau wealthy” will be buying again, but in a smaller amount than before, and could look at fractional ownership or chartering as options. There is no doubt that yachting is just what it is: a service and activity reserved for those who are well established. There will always be a new generation of eager and capable buyers with the ambition to purchase an asset floating. In any case, boat builders and dealers are naturally anxious, but they are determined to face the challenges. In this instance, perseverance and determination will prove significant beyond doubt.