After one of the worst crises in the history of tourism and travel, one part of the market has thrived as business has boomed on a surge of orders.
The demand for superyachts has rarely been stronger with rich tourists enjoying the holiday havens on the sea to escape the crowds and the threat of Covid-19.
For those who can afford it, there is everything from watersports to onboard yoga and fitness sessions, as well as the chance to spend quality time with friends and family in a secluded bubble.
“Since we came out of the first lockdown [last summer], the market has been absolutely booming to levels far in excess of before we went into lockdown,” said Antony Sheriff, chief executive of Plymouth-based Princess Yachts.
The success story is echoed by yacht makers across Europe. Ferretti, a shipbuilder based in Forli in northern Italy, delivered a record 56 yachts in the first quarter and said the “fantastic acceleration” in orders defied forecasts.
Elsewhere, a record 208 superyachts have been bought on the brokerage market for £1bn this year to May 17, more than the 131 a year earlier, according to luxury lifestyle publisher Boat International.
Yacht bosses also say the pandemic has spurred the wealthy to re-evaluate how they spend their time and to make the leap to purchase their first boat or upsize with soaring asset prices adding to their riches.
“With coronavirus, people realised ‘your life can change immediately’. Their perception of life changed and they wanted to exploit the moment,” said Marco Valle, chief executive of Benetti Yachts based in Viareggio in Tuscany. “It’s not a secret stock exchanges went up dramatically. We were ready with the right products.”
Even the cancellation of the many boat shows at glamorous locations such as Monaco have failed to damp demand as the online shopping boom has offset lost sales from the trade fairs, which normally attract buyers.
“In a year without boat shows, we’ve had one of the best order intakes ever,” said Rose Damen, managing director of Damen Yachting, a Dutch manufacturer whose order book has grown by about €800m in the past 12 months.
Yet, it has not all been plain sailing. Social-distancing requirements have made it impossible to catch up on the months of lost production when shipyards closed down last spring, while raw material costs, which cannot easily be passed on to buyers, have been soaring.
It also follows a difficult decade highlighted by a string of failures in a consolidating industry with 20 shipyards producing 65 per cent of the superyachts delivered last year, up from a third in 2010, according to the Superyacht Group.
Most recent failures include Nobiskrug in northern Germany, owned by French-Lebanese industrialist Iskandar Safa’s Privinvest, which fell into administration last month (April), and the bankruptcy of Italy’s Perini Navi in February and Norway’s Kleven last July.
In addition, manufacturers have to deal with some of the world’s toughest customers, as the wealthy make for fierce negotiators, on just a handful of megaprojects where budget miscalculations on one deal can hit profits hard.
“People expect it to be a very profitable business because your clients are billionaires, but in fact it’s not a high margin business and it can be high risk,” said Damen.
Now, the task for builders of the 5,700-strong superyacht fleet — defined as boats longer than 30m — is to hold on to customers in the post-pandemic market.
Even though the pool of 520,000 individuals with a net worth above $30m, as calculated by Frank Knight’s Wealth Report, is expected to grow, many rich customers may decide to spend their money on other things once the crisis is over.
Industry executives also say they have a battle to overcome what they consider an unfair stigma that superyachts are playthings of the rich, widening inequality and disproportionately contributing to climate change.
One British entrepreneur, seeing the pandemic out with his family on his yacht in the Bahamas while taking Zoom calls for work, hinted at the societal pressure.
“The quality of life and quality of time is great.” But his email signature reads London to avoid unpleasantness from jealous colleagues or clients. “The green-eyed monster is alive and well,” he added.
Buyers are typically not the stereotypical cigar-toting oligarchs or party animals depicted on the popular television show Below Deck, either.
“The archetypal yacht owner — tanned skinned, martini in hand — is a bit of a trope. That has gone,” said Brendan O’Shannassy from aboard the 100m-plus vessel he was skippering in waters south of Bermuda.
Executives also add that the jobs the industry creates are sometimes overlooked. These workers or artisans have often honed their skills over long apprenticeships or years of hard work.
“People love to talk about the skills, quality and craftsmanship it takes to build a Bentley or Rolls-Royce. But not for superyachts,” said Martin Redmayne, chair of the Superyacht Group.
However, Valle of Benetti still expects a dip in orders and a battle to win and retain customers once the crisis is over.
“Our task as a manufacturer is to convince them [customers] . . . that yachting becomes something not just new, but a passion to repeat, keep in this life and transfer in the family to sons and daughters.”