Insight: The state of the market in The Americas

Written by Ralph Dazert

With the state of the market in the Americas a hot topic within the superyacht industry, there’s been plenty of talk surrounding its past developments and future outlook - much of which will also be discussed together with industry experts in tomorrow's Webinar which focuses on 'The US Market'.

Using data from our SuperYacht Times iQ reports, SYT’s head of intelligence, Ralph Dazert, examines how new and used yacht sales, yacht construction and yacht ownership have evolved in the region over the past five years. In addition, we also spoke to industry experts all around the world in order to get their take on the market performance between 2015-19 and discover how it’s shaping up for the future.Bravo motor yacht Y718 by OceancoPhoto: Tom van Oossanen / SuperYacht TimesThe Americas: An Overview

New superyacht construction in the Americas has decreased by more than 50% in the past five years, from 92 yachts during the preceding five-year period (2010-2014) to just 38 during 2015-2019. North America, however, remains the strongest superyacht buyers’ market, with US and Canadian buyers jointly responsible for 24% of all new-build sales of yachts over 40 metres to buyers with a known nationality.

North American buyers of new yachts over 40 metres particularly like Dutch-built superyachts, with 44% of the new yachts they bought built in the Netherlands. Italy is the second most popular build country with 18% of the yachts having been built there. North American yards are currently small players in the over-40-metre market, with domestic buyers sourcing only 6% of new yachts in this size category from their own countries.

Bravo motor yacht Y718 by OceancoPhoto: Tom van Oossanen / SuperYacht TimesKey Figures

  • 38 yachts were completed between 2015-2019 (United States: 34; Brazil: 3; Canada: 1)

  • 19 yachts were under construction (United States: 15; Canada: 3; Brazil: 1)

  • 27.6% of the world fleet was owned in the Americas (in number of yachts)

  • 24.3% of yachts were owned in North America (mostly the United States), 2.0% percent in Central America (mostly Mexico) and 1.5% in South America (mostly Brazil) as of the end of 2019.

  • United States’ share of ownership is up over the past two years, as is the Mexican share of ownership

  • The South American share of ownership is down, from a peak of 1.8% of the fleet in 2016 to 1.5% in 2019.

  • The North American market took 24% of all new-build sales over 40 metres during 2015-2019.

  • In used yacht sales over 40 metres, North American buyers were the biggest force, taking 37% of used sales with a known buyer nationality.

Bravo motor yacht Y718 by OceancoPhoto: Tom van Oossanen / SuperYacht TimesQ&A on the Market in the Americas, 2015-19

Here, we speak to industry representatives from across the region to find out how the market has evolved since 2015 and to garner their thoughts on the future.

What is the typical profile of the customer base in the Americas region and have you seen a shift in what clients are looking for in their superyachts over the last five years, in terms of the size, style or purpose?

Alex Rogers (Director, Westport Yacht Sales): The customer trend definitely seems to be getting younger while yacht sizes are definitely getting bigger, and we have seen a rise in demand for beach clubs and gyro stabilisers. 

Roger Sowerbutts (Director, Horizon Yacht USA): Although many of our clients have similar cruising grounds or lifestyles, there are nuances in their yachts and in their specific requirements for layout, equipment and features. We have however seen a consistent interest in outdoor entertainment areas, so we often design foredecks, flybridge decks and aft spaces around dining, lounging and entertaining in these spaces. There is also a larger focus on interior volumes, with less emphasis being placed on the overall length of yachts. Horizon  FD102/02 To-Kalon yacht exteriorPhoto: Horizon YachtsMichael Joyce (CEO, Hargrave Custom Yachts): The typical Hargrave buyer is usually 60+ and has been boating for at least thirty years. As they reach this point in their life, they tend to know exactly what they want in their next yacht, which is why they are eager and willing to go through the entire design and build process to get it. 

We have noticed that clients also focus more on accommodation as larger families go on board. The yacht is becoming generic while clients look more to its connectivity, water toys, and other add-ons that are of interest to their family and guests. Above all, it’s about the experience they are hoping to create on board.Horizon  FD102/02 To-Kalon yacht interiorPhoto: Horizon YachtsCromwell Littlejohn (Commercial Director USA, Northrop & Johnson): We certainly see younger boaters entering ownership, and first-time owners’ yacht sizes increasing (drastically!). However, this is likely due to the growth of the charter sector. Some first-time owners that we see entering the market have never owned a smaller boat themselves, yet they still have years of charter experience on their profile, which is something we haven’t seen in the past - the learning curve no longer comes only from ownership. 

With regards to onboard lifestyle, we’ve seen an increase in the amenities and features available to crew, as crew are often one of the highest expenditures in the operating budget and can make the biggest difference in an owner’s enjoyment of their yacht. Baba's yacht by Hargrave in Nassau, BahamasPhoto: Tom van OossanenAccording to our data, 2019 saw fewer new and used yacht sales than 2018. Does this match what you have seen? What do you predict for 2020? 

Alex Rogers (Westport): 2019 was pretty consistent with 2018 for us, but there is a definite lack of used boat inventory. That being said, we hope to see clients looking at new inventory in 2020.

Cromwell Littlejohn (Northrop & Johnson): Our data has shown that the number of yacht sales over 24 metres has remained relatively steady throughout the past three years, with approximately 10 boats difference between 2018 and 2019. While that overall number is a roughly 10% swing, the value and size of those sales seem to be trending upwards. 

Michael Joyce (Hargrave Custom Yachts): Your data matches what we are seeing in the world, but I’m not sure it matches the press releases we read every week saying builders are breaking all-time sales records. We are not expecting any change in 2020 until after the election, but we predict 2020 will remain strong. Wealthy people can probably see further into the future than most of us, but with the imminent threat of socialism taking control of the political system here in America, and every left-wing candidate talking about imposing staggering wealth taxes, many Hargrave clients are postponing major purchase decisions until they see what happens in the next election. 

Northrop and Johnson Marketing Photo: Northrop and johnsonDoes the second-hand market have an impact on new-build sales in the Americas?

Dan Mundy (President, Alexander Marine): In a sense, yes. With Ocean Alexander, we purposefully do not build two boats alike and are very cognisant about when to stop. Although we might build a number of models that share the same DNA and heritage, they all have a unique mark and style to them which gives them a strong stature. Therefore, even if we have three 100s on the market and one on the used sales market, we avoid saturating our brand and the market through our approach.

Michael Joyce (Hargrave Custom Yachts): We have noticed that the time a yacht spends on the market has steadily gone up over the years as the supply of new-builds continues to increase while the demand remains the same or even slightly decreases. Since buyers know this and don’t want to be a two-boat owner in that scenario, the builder either takes a trade or has to wait for the brokerage market to find a buyer. With more builders shifting to building on speculation, it only increases the pressure on new boat prices.

Ocean Alexander 100Are you using a specific marketing approach for the Americas region and does it differ from your approach to other areas? 

Roger Sowerbutts (Horizon Yacht USA): Horizon has a global marketing message, but we also tailor our marketing to each region. Our global message focuses on three key components: firstly, what sets Horizon apart as a luxury manufacturer - which is our flexibility in design and build; secondly, our commitment to our clients, listening to their requirements and building the yacht of their dreams; and thirdly, that boating is about having fun and enjoying the experience. 

Dan Mundy (Alexander Marine): I would say that our marketing approach to the Americas is very simplistic: we are not a production builder. We build a boat that speaks to the Americas, but one which still has a very international feel. Our largest market is definitely the Americas, but because we also have such a broad range we are able to actually find a unique synergy with all of our clients. Albatross anchored off CalviPhoto: Tom van Oossanen / SuperYacht TimesMichael Joyce (Hargrave Custom Yachts): The Hargrave name has been laser-focused on the US market for over sixty years and almost every client has owned a Hargrave-designed yacht at some point in their history. Everything we have going on with Kha Shing in Taiwan for the past 20 years has been focused on the US market, and with over 100 projects to date, we used a low profile marketing program that is centred around our referral network of clients, captains, and brokers. 

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