Superyacht Sales Experience a Decline as Russian Oligarchs Exit the Market
The superyacht industry has hit a roadblock in recent years, with declining sales and extended wait times causing concern among industry experts. According to the SuperYacht Times’ State of Yachting report, sales of new superyachts fell by 17% in 2023, marking a significant drop from the record-breaking sales of 2021. This decline can be attributed to a combination of factors, including long waiting lists, soaring costs, and sanctions imposed on Russian oligarchs.
One of the key reasons behind the decline in superyacht sales is the extended wait times faced by buyers. With backlogs stemming from the pandemic, a buyer placing an order for a new yacht over 200 feet today can expect to wait three to four years for its delivery. This delay has caused frustration among potential buyers and has deterred them from making new purchases. Additionally, the prices of superyachts have skyrocketed due to higher labor and material costs, adding to the reluctance of buyers.
The report also highlights the impact of Russian oligarchs exiting the market. Following the Ukraine invasion in 2022, rich Russian buyers have withdrawn from the superyacht market. The Russian clientele was known for ordering extravagant and large yachts, making their absence felt in the industry. As a result, sales of yachts over 200 meters fell by 40% last year.
Despite these challenges, there is some good news for the industry. Americans are stepping in to fill the gap left by Russian buyers, accounting for nearly a quarter of all superyacht sales in 2023. While American buyers tend to prefer smaller yachts compared to Middle Eastern and Russian buyers, there has been an increase in the size of American-owned yachts. The average length of a Saudi-owned superyacht is now 202 feet, while Russian buyers opt for 200 feet, and Americans choose 177 feet.
Although new sales are declining, there has been an uptick in yacht completions. This refers to yachts ordered during the pandemic that are now being launched. In 2023, the number of completions surged by 31% to 202 superyachts. This trend indicates that despite the challenges faced by the industry, there is still demand for luxury yachts.
The rising fleet of superyachts has also led to a growing demand for the entire ecosystem surrounding the yacht economy. From builders and brokers to marina slips and crew, the industry is experiencing an increased need for services. According to SuperYacht Times, there are now nearly 6,000 superyachts, triple the number in 2002. This expansion provides opportunities for various sectors within the industry to flourish.
Industry experts remain optimistic about the future of the superyacht market. Ralph Dazert, head of intelligence at SuperYacht Times, believes that despite the decline in sales, the pool of customers has expanded permanently. Many of the wealthy buyers who entered the market during the pandemic continue to use their yachts and are even upgrading to larger vessels. This suggests that the high-water mark for the yachting economy will likely continue to rise.
In conclusion, the superyacht industry has faced challenges in recent years, including declining sales and extended wait times. The exit of Russian oligarchs from the market, along with increasing costs and delays, has contributed to this decline. However, American buyers are stepping in to fill the gap, and there has been an increase in yacht completions. The growing fleet of superyachts also creates opportunities for various sectors within the industry. Despite the challenges, experts remain optimistic about the future of the superyacht market, predicting a continued rise in demand as the pool of customers expands permanently.
