Pandemic and global recession aside, it’s a great time to be in the yacht business. Seriously. According to the National Marine Manufacturers Association (NMMA), new boat sales were up 59 percent in May compared to April, and up 19 percent compared to May 2019. Yacht sales — which the NMMA defines as boats 33 feet in length or longer — increased 51 percent in the U.S. in May.
“The new data from the NMMA reinforces what we’ve been hearing from dealers and manufacturers from across the country: record interest and robust sales this summer across all boat segments, as Americans invest in new ways to escape and vacation in the social distancing era,” says the NMMA. “Many dealers are also reporting first-time boat buyers.”
All of this is music to the ears of Alfred Law, director of Sunseeker, which is an iconic global yacht brand based in the U.K. Law, who works out of Singapore and services all of Southeast Asia, says he has seen changes in who buys yachts and how those purchases are made during the pandemic, but he has also seen increased opportunities. For example, there was a couple in Singapore who had well-known office space — and instead of buying a new home, condo or property, they opted for a “floating home,” which is one of the use cases among yacht buyers.
“Floating homes are becoming more and more common, partially because hotels and air traffic are restricted,” Law noted. “So the only way people can go for a staycation is on the boats — they can go out and spend a few hours or even a night out on the sea.”
Despite the pandemic-driven uptick in his business, Law admits that the current economic climate is making new yacht purchases more challenging, because the high-net-worth individuals (HNWI) who make up typical yacht buyers are unsure about the future. He’s seeing a lot of business for used yachts, which have been dropping in price. Those used units are selling well in Singapore and Hong Kong, despite the political situation there. Vietnam and Cambodia are also emerging yacht markets, with what Law calls “invisible tycoons” starting to show themselves in those territories.
The price tag, even for used yachts, can run from $1 million to $256 million. Only between 10 and 12 “super yachts” will sell in an entire year, according to pre-pandemic data. On the site Superyacht Times, Sunseeker has several new models for sale, from a 112-foot Spectre for $10.8 million to a 120-foot Elysium for $19.7 million. According to Investopedia, the average expense to dock, store, staff and maintain a super yacht is around $2 million per year.
And it’s not the kind of purchase anyone can put on a credit card. Since the pandemic started, Law has seen four kinds of customers for used and new yachts. The first is the HNWI, who can write a check for the full sale price. The second is the “team” that buys a yacht. This might be four or five HNWIs who go in together on a yacht and its maintenance. The third is the HNWI who needs financing, which Sunseeker can facilitate with the banks. The fourth is the rental customer. Sunseeker rents yachts by the half-day or full day, as well as longer-term leases.
“During the pandemic, we’ve see a rise in yacht rentals,” Law noted. “Previously, we got yacht rentals probably four to five times a month. But now, we get inquiries on a weekly basis. A lot of families come to us for a staycation. We provide the crews and beverages on board, and we do food packages as well.”
The company’s typical customers are millennial business owners who are interested in a yacht for both business and leisure purposes. They look for ancillary products on board, such as karaoke bars or Jet Skis attached to the boat. Gen Y customers are also starting to pick up; they look more at practicality, according to Law.
Regardless of who the customer is, Law maintains that it’s a great time to buy a yacht: “If you have the capital to buy a yacht now, why not? At this point in time, a lot of owners and manufacturers are giving very good discounts and packages that you won’t see during normal times. If you’re interested in buying a boat, I think now is a good time to invest.”