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Reader,
September 2024 went profitably by, marking the return of the boat show season opening triumvirate, Cannes Yachting Festival, Genoa Boat Show, and Monaco Yacht Show, where brands and companies from around the world congregated to take part. Several shipyards also took the opportunity to share their fiscal results, indicating the industry’s strength at a time when the vagaries of political events happening around the world have affected the market.
During the Cannes Yacht Festival, Azimut-Benetti Group announced strong results for the 2023/24 fiscal year with a 55% revenue increase compared to four years ago, rising from €840 million in 2020/21 to €1.3 billion in 2023/24. Notably, the Middle East and Asia Pacific region accounted for 23% of total sales, an 8% increase from the 2020/21 period. Meanwhile, Dutch builder Heesen Yachts took to the Monaco Yacht Show to announce record revenues totaling €230 million for the 2023/24 year. Speaking to the press, CEO Niels Vaessen anticipated the role of Middle East clientele to take even more prominence in the coming years, noting: “We can see there is a lot of wealth in the traditional yachting markets [the US and Europe] and we expect those markets to be very stable in the coming years alongside a lot of growth in the Middle East”
The Middle East has indeed witnessed significant growth, and as a superyacht market, finds itself in a promising position as 2025 looms. Saudi Arabia’s highly anticipated developments NEOM and Amaala are set to usher in a new era of maritime tourism with their soft openings, as the Saudi Red Sea Authority recently released the first-ever regulations for cruising yachts in the Kingdom. With the infrastructure dedicated to establishing a thriving coastal tourism sector, The Kingdom plans to attract 19 million tourists by 2030.
The United Arab Emirates continues to prove itself as an established market. The Dubai International Boat Show, which returns from 19-23 February, broke records for its 30th edition when it welcomed over 30,000 visitors at Dubai Harbour. A high-demand area, the Emirate is addressing the shortage of berthing spots with the addition of new marinas, including D-Marin’s recently announced Port De La Mer. This is also evidenced when looking at domestic proprietorship. Observing the 40m+ segment when compared to the global fleet, the UAE saw an increase in superyacht ownership for the third consecutive year, occupying 3.7% of the total fleet, according to the Superyacht Times, Monaco Yacht Show Report 2024, while Saudi Arabia remained stable at 3.1%.
Meanwhile, a notable trend deduced from the figures reveals a drop in owners of Russian nationality by over 10% in the past 3 years, now accounting for 7.8% of the global fleet, compared to 9.1% in 2022. Certainly, the 2022 Russian invasion of Ukraine remains a prevalent issue that affects the superyacht market in many ways.
During the superyacht investor conference this past April, Paul Miller of Millstream Underwriting prognosticated that it would take between 8 to 10 years for sanctions issues coming out of the Russia-Ukraine war to be resolved. It seems as though we have started to see a semblance of that when the U.S. Department of Treasury announced it had removed the 136-meter superyacht Flying Fox from its sanctions list, permitting the vessel to be chartered globally without any restrictions. For now, the decision concerning Flying Fox remains an outlier as other vessels await to see their denouement. The 59-meter Phi remains docked at London’s Canary Wharf as her owner awaits a Supreme Court hearing, challenging the Appellate Court’s Decision from this past January. Meanwhile, the 82-meter Royal Romance, previously scheduled to be auctioned, after ownership was transferred to the Ukrainian Government, continues to face legal complications with her sale. The auction is now indefinitely suspended. Overall, it seems as though each of the concerned governments is handling the sanctions regulations in a different manner, and for the U.S., the issue of sanctions is one of several that concern the stability of the global market predicated on the upcoming Presidential Elections.
The U.S. elections, which have historically impacted the market, are causing reticence from buyers and sellers who are waiting to find out who emerges victorious between Donald Trump and Kamala Harris this upcoming November. Although contrary to conventional wisdom, election years have not caused any negative implications on the market, as this piece from yachting firm IYC posits, as much as it is potential buyers who are adopting a “wait and see” approach that causes a stall.
Alongside the presidential elections and sanctions measures, the political situation in the area has arguably affected the region most directly, if only for its perception. This year, Egypt made a remarkable effort to invest in its nautical offerings when it turned the Suez Canal into more than just a transit area for superyachts – as I wrote back in July – despite the ongoing security issues permeating the Red Sea. The re-emergence of Houthi Attacks on commercial shipping vessels continues to affect the maritime industry as a whole, and apprehension preventing any superyacht owner from cruising a high-risk designated area is apparent, even galvanizing the Suez Canal to incentive movement in the area by introducing a 50% discount on transit fees to boost tourism. However, as noted in the aforementioned piece, security concerns surrounding the Red Sea are only one part of the equation affecting marine tourism, saying less about the region but more about the current political landscape.
It remains to see what will happen, but if there is anything to take away from the events lined up in Abu Dhabi, Qatar, Egypt, and Dubai, there are no plans to slow down anytime soon. I look forward to chronicling all of the developments on maritimeobserver.com.
Note: This December, The SuperYacht Times will be hosting the 2024 edition of the Gulf Superyacht Summit in Dubai. The two-day summit dives into sharing insight on building the Gulf’s appeal as a superyacht destination, an event pertinent to readers of this newsletter. You can find more information here.
I would love to hear your thoughts. You can reach out to faisal@maritimeobserver.com
Wishing you a fantastic month,
Faisal