The realities of the pandemic refit market has been a point of contention over the last year. There was a time early on in the pandemic when the refit sector thought there might be a silver lining to the storm cloud called Covid-19.
The reasoning went like this: if owners are unable to use their yachts or even charter them due to travel restrictions, why not use the downtime to put their yachts through lengthy refits? This made sense in theory, but the reality was rather different. Shipyards scrambled to establish safe working protocols, but when the first lockdown was followed by a second and international travel became still harder, the realisation hit home that no one was going to escape the crisis scot-free. Adapting safely
“The main difficulty we had was to understand which safety and sanitisation procedures we had to apply and, at the same time, how to manage the small local lockdowns that led to a reduction of the shipyard’s external subcontractors,” says Giulio Pennacchio, General Director of NCA Refit, part of the Italian Sea Group. “Uncertainty in March and April 2020 caused yacht schedules to change abruptly,” adds Daniele Giampaolo, Technical & Sales Director at Amico&Co in Genoa. “There was a progressive slowing down of production activities, due both to the adoption of health measures and to the situation in general.”
“The application of the new health regulations inevitably brought social and management implications and even the crews and their captains found themselves dealing with situations never experienced before,” says Giuseppe Palumbo, CEO of the Palumbo Group. “This meant that a lot of time was dedicated to internal procedures and to defining the processes that couldn’t be postponed for the proper maintenance of the boats. The more complex jobs were ‘parked’ for a few months and, as the situation became clearer, new timelines were defined.” Photo: AdrienRestrictions on travel are unavoidable
Tanguy Ducros, COO of Monaco Marine, had no illusions: “When the pandemic started, we knew with certainty that it would have a negative impact on the market because of its consequences on travel due to the many restrictions that were in place,” he says. “Our work is hardly exportable and the yachts must come to the shipyard to perform the works. It is now a known fact that the pandemic has reduced the number of refits carried out last year.” Indeed, figures compiled by SuperYacht Times iQ confirm that visits by yachts of 30-plus metres to refit yards in the Mediterranean were down in 2020 compared to 2019, with Italy maintaining its top slot as the busiest destination country. However, the silver lining theorists were at least partially right because the global numbers were up (1,416 compared vs 1,334) with only Q2 showing fewer yard visits in relation to the previous year.
The reason for this seeming imbalance is that many American-owned yachts remained on the other side of the Atlantic when the pandemic hit Europe and carried out refit and repair works – especially at the lower end of the size bracket – at local yards that were not subjected to the same strict lockdown procedures as their counterparts in the Med (in fact, the figures show visits to refit yards in the US were up last year compared to 2019). Yet despite the challenge of having to adjust in double-quick time to new safety protocols and the ever-changing Covid-19 situation, most Mediterranean yards experienced only a small dip in business, if any at all. The market fluctuated with the changing pandemic
“Whilst many vessels did not cross from the US, others remained for longer refit periods, completing refit works of greater scope than originally planned,” says Daniele Giampaolo. “Production activities re-started bit by bit, becoming almost fully operative at the end of May 2020 by maintaining strict anti-Covid protocols and relying on our in-house departments for the resources necessary for production. Refits from returning clients ensured that the season was successful despite all the challenges, and summer 2020 was a very busy period.”
The flow of business for the first part of 2020 was satisfactory for the entire network of our five refit shipyards, as most of the boats remained at the facilities waiting to know the development of the pandemic and confirming further work where possible,” says Giuseppe Palumbo. “The second part of the year fluctuated more, pending more information on the spread of the pandemic and international protocols for navigation and charter.”
“Apart from the two months from mid-March to mid-May when our focus shifted towards creating a safe working environment for our staff, clients and collaborators, the rest of the year was very busy with a similar level of activity as in 2019,” confirms Rob Papworth, Operations Director at MB92 La Ciotat. “We think this indicates a slight strengthening of the refit market considering many owners delayed decision-making due to uncertain travel conditions and increased their focus on their primary businesses.” Photo: Niko CThe prognosis is positive for the upcoming year
The general outlook is positive in regard to the next 12 months, not least because with Covid-19 still rife the refit season is likely to be extended until June or even later. Much will depend on the rates of vaccination in different countries and how quickly international travel can be resumed. “If you had asked me the same question six months ago, I would have certainly had a different answer, as I thought the situation would already be better,” says Tanguy Ducros. “I think the refit market will improve significantly, as demand will grow due to most of the yachts postponing their works this past year, and we’ve had no cancellations as of yet. However, I do not believe it will be back to business as usual until the travel restrictions are lifted and the vaccines have reached more people.”
“In general, we can say that the 2020 trends will also be confirmed for 2021, with the bonus of being able to better handle Covid-19,” says Giulio Pennacchio. “The upcoming spring season will close much better than that of 2020, because yachts are likely to be refitting until June and then face a reduced summer season. The charter market remains the only one still stuck for the moment.”
“Our 2020-21 season began earlier than past seasons with a strong start in September and with repeat business as the main driver,” adds Daniele Giampaolo. “The great potential for the yachting market to exponentially penetrate UHNWI numbers will be realised in 2021 and beyond, with yachts having greater perceived value than before — both as a personal floating base and for enjoying experiences with family and friends. This will have a knock-on effect on the already buoyant refit market.” All the major refit shipyards we spoke to had investment plans in place before the start of the pandemic, but these development projects have taken on extra significance as they look to take advantage of the expected upturn in business when international travel becomes easier and safer. At the time of writing, NCA Refit in Tuscany was about to inaugurate a new construction hangar and work is under way on a second dry dock of 140 metres. In order to increase operational efficiency and better serve its local clients, Monaco Marine is installing a new 300-tonne travel lift and doubling the capacity of its facility in Antibes, as well as upgrading the cranes and ground surfaces at its site in St Tropez. In addition to its five refit yards dotted around the Med, Palumbo SY Refit has opened a Service Point in Guadaloupe for Central America and the Caribbean and a new refit headquarters in Antibes. In a year that has seen the opening of the new motorway bridge and the start of a major waterfront development in Genoa, Amico&Co is on schedule with its superyacht hub project, offering a complete package of service solutions (the waterfront marina opened in October 2020 and new crew facilities were due for completion at the time of going to print). And last but not least, MB92 La Ciotat is bolstering its existing facilities with a dedicated 300-tonne platform for yachts up to 50 metres and a 4,300-tonne ship-lift for yachts up to 110 metres, due for completion in the second half of 2022.
“The focus on all sectors of yachting, from sailing dinghies to superyachts, has never been higher,” says an enthusiastic Rob Papworth. “We believe that the increasing demand for time on the water will lead to a strong refit market for years to come.”
This article was originally published in the Summer 2021 issue of The SuperYacht Times newspaper. To receive all future issues straight to your door, subscribe to the newspaper here.