Luxury Yacht Market - Forecast(2024 - 2030)

Luxury Yacht Market Overview

Luxury Yacht Market Size is estimated to reach $11.8 billion by 2027. Furthermore, it is poised to grow at a CAGR of 10.9% over the forecast period of 2022-2027. A yacht is a sailing or power vessel used for pleasure, cruising, or racing. Yachts with high-end finishes and features, as well as cutting-edge performance technology are called luxury yachts. Luxury yachts are equipped with highly skilled crews, bulletproof glass, Swarovski interiors, anti-drone systems, and so on. Technological innovations have pushed luxury sailing yacht designs in unique directions and made them more visually distinctive and versatile. Yacht charter support vessels are used for extending the yachting experience. They are used as a floating helipad, tender garage, and accommodator for crew and specialist staff. All vessels, including yachts, are required to comply with the IMO International Convention for ballast water management systems (BWMS). Ballast water is held in tanks of yachts to increase their stability and maneuverability during transit. BMWS are intended to prevent microorganisms, such as invasive species and hazardous pathogens, from being transmitted from one part of an ocean, river, or sea to another by holding or discharging ballast water. An increase in income level of people, a rise in inclination toward recreational and leisure activities, the surge in recreational yacht tourism, and chartering of yachts are the key drivers of the Luxury Yacht Market’s growth.

An increase in recreational and corporate tourism such as private parties, promotional meetings and events, and so on is expected to positively influence the Luxury Yacht industry during the forecast period 2022-2027.

Luxury Yacht Market Report Coverage

The report: “Luxury Yacht Market Forecast (2022-2027)", by Industry ARC covers an in-depth analysis of the following segments of the Luxury Yacht Market.

By Type: Sailing Luxury Yacht, Motorized Luxury Yacht and Others.
By Size: 75-120 Feet, 121-250 Feet and Above 250 Feet.
By Material: FRP/ Composites, Metal/ Alloys and Others.
By Application: Private and Commercial.
By Geography- North America (U.S., Canada, Mexico), Europe (Germany, United Kingdom (U.K.), France, Italy, Spain, Russia, and Rest of Europe), Asia Pacific (China, Japan India, South Korea, Australia, and New Zealand, and Rest of Asia Pacific), South America (Brazil, Argentina, Chile, Colombia and Rest of South America), and Rest of the World (the Middle East, and Africa).

Key Takeaways

• Geographically, Europe held a dominant market share in the year 2021 on account of increasing yacht tourism, the presence of ultra-rich individuals, and established players in the market.
• Changing the lifestyle of people, rising expenditure capacity of consumers, and growing inclination toward recreational leisure activities continue to augment the market growth.
• According to the World Bank, High-Net-Worth Individuals (HNWI) account for less than 1% of the world's total population but possess more than 40% of the world's total wealth. The growing HNVI population spends on leisure activities including luxury yacht travels which are predicted to augment the market growth in the forecast period of 2022-2027.
• However, Government laws and environmental rules, as well as increased maintenance and associated expenses, are some of the significant factors that poses threat to the luxury yacht market's growth.
• A detailed analysis of strengths, weaknesses, opportunities, and threats will be provided in the Luxury Yacht Market Report.

Luxury Yacht Market Segmentation Analysis- By Type

The luxury Yacht Market based on type can be further segmented into Sailing Luxury Yacht, Motorized Luxury yachts, and Others. Motorized Luxury Yacht held a dominant market share in the year 2021 and is also estimated to be the fastest-growing, with a CAGR of 11.8% over the forecast period of 2022-2027 owing to more number of on-board facilities like expansive staterooms, flexible layouts, and spacious decks, sleek and stylish designs. Luxury motor yachts have enhanced speed and power and can cover less distance in more time. Additional stabilizers and steady cruising capacities and the ability to reach high speeds continue to fuel the market growth of the luxury motor market. Owing to their easier handling qualities, motor luxury yachts are a popular alternative for those who are new to or inexperienced with yachting as well as for those who look for a more adventurous yachting experience. The pandemic had a huge impact on various industries around the world and yachting was no exception. This boosted the charter yachts segment as people started prioritizing quality trips over frequency and privacy overcrowded trips. Millennials are trending toward charting a yacht rather than owning them. Motor Luxury Yachts make up the major portion of charted yachts globally. The trend of chartering motor luxury yachts is predicted to fuel the market growth over the forecast period of 2022-2027.

Luxury Yacht Market Segmentation Analysis- By Material

Luxury Yacht Market based on the material can be further segmented into FRP/ Composites, Metal/ Alloys, and Others. The Fiber-reinforced plastic (FRP) segment held a dominant market share in the year 2021 and is also estimated to be the fastest-growing, with a CAGR of 11.3% over the forecast period of 2022-2027 owing to its versatility, ability to resist corrosion, its durability, high strength to weight ratio and tremendous potential for applications in the marine environment. Yachts made from FRP require less maintenance than other metals used. Since FRP is made from polymer, it has an almost negligible corrosion rate after being in contact with water for a long time. Owing to their low fuel consumption, FRP yachts are more environmentally friendly than metal boats. They do not produce hazardous metallic flakes, which are detrimental to aquatic life, unlike metal boats. Furthermore, FRP boats are completely recyclable and have no negative impact on the maritime ecosystem. The adaptability, durability, and low fuel consumption properties of FRP are predicted to augment the market growth over the forecast period of 2022-2027.

Luxury Yacht Market Segmentation Analysis- By Geography

The Luxury Yacht Market based on Geography can be further segmented into North America, Europe, Asia-Pacific, South America, and the Rest of the World. Europe held a dominant market share of 37% in the year 2021. Europe has the highest share of billionaires globally and is the global leader in international tourism, with over 700 million inbound tourists arriving in the region each year. In 2019, it generated 35% of the world’s international tourism expenditure. The rise in the income level of people and growth in tourism boosted the market growth in Europe as yachts are preferred by the tourists for cruising, enjoying scenic beauty as well as organizing parties. Luxury yachts with high-tech interiors and amenities are being introduced by European original equipment manufacturers (OEMs), which is predicted to augment the market growth over the forecast period of 2022-2027.

However, Asia-Pacific is estimated to be the fastest-growing, with a CAGR of 11.2% over the forecast period of 2022-2027. The rise in disposable income and improved standard of living are two major factors driving the shift in the region's population's desire for yacht travel. Additionally, government efforts promoting tourism development, such as the Swadesh Darshan Scheme and Incredible India, are likely to drive regional market growth over the projection period.

Luxury Yacht Market Drivers

Increment In Fleet Size Aids To Market Growth

The key factors driving the expansion of charter yachts are the increased inclination among tourists for luxury marine tourism and personalized services. According to World Tourist Organization (UNWTO), COVID had a drastic impact on international tourism. For instance, domestic and global flights were canceled, many hotels were closed indefinitely, and country borders were sealed to restrict the coronavirus spreading. Once the restrictions were lifted, people wanted to have safe travel. Chartered yachts are considered to be safe as it accommodates a handful of people. According to the US National Marine Manufacturers Association, boat sales reached a 13-year high in 2020, reflecting how people were turning to the water for safe, socially distanced activities during lockdowns. This augmented the demand for chartered yachts which forced Various yacht charter companies to add new yachts for staying ahead of their competitors. For instance, in March 2021, Imperial Yachts announced the signing of a new 100-meter superyacht project, Project Titanium in collaboration with The Italian Sea Group, the parent company of Admiral Yachts, thereby, enhancing the Luxury Yacht Industry growth.

Market Is Growing As A Result Of Rising Billionaires Globally

The number of billionaires rose from 1826 in 2015 to 2755 in 2021. This accounts for an increase of 50% in the number of billionaires globally over the period of 6 years. Billionaires and high net value individuals form the major customer segment of luxurious yachts as they are too expensive owing to high-end, luxury interiors and exterior finishing, intricate inner workings, high research and developmental costs involved, high-end skilled labor and high maintenance, docking and fuel costs. For instance, the largest luxury yacht named Azzam which is owned by a member of the royal family in Dubai costs around $600 Million. As the target audience for the luxury yacht market is these billionaires and High Net Value Individuals, their increasing number is expected to drive the market growth in the forecast period of 2022-2027.

Luxury Yacht Market Challenges

Ecological Transition While Remaining Competitive Is Posing Threat To The Market Growth

International Maritime Organization has directed the maritime industry to reduce greenhouse gas emissions by 50% by 2050 from 2008’s levels and CO2 emissions by at least 40% by 2030 and 70% by 2050, compared to 2008. Yacht manufacturers are working together towards it. For instance, the introduction of new propulsion systems which burn less fuel, hybrid yacht batteries in motorize yachts that help to sail for hours with fuel less transportation, and so on. Yachts are also required to comply with the IMO International Convention for the Control and management of Ships’ Ballast Water and Sediments (BWM Convention) which requires an approved ballast water management system, hampers the market expansion over the projection period.

Luxury Yacht Industry Outlook

Product launches, mergers and acquisitions, joint ventures, and geographical expansions are key strategies adopted by players in the Luxury Yacht Market. The top 10- Luxury Yacht Market companies are-

1. Damen Shipyards Group
2. FERRETTI S.P.A.
3. Feadship
4. Northrop & Johnson
5. Alexander Marine Co Ltd
6. Azimut Benetti S.p.A.
7. Christensen Shipyards LL
8. San Lorenzo S.p.A.
9. Sinot Yacht
10. Fincantieri Yachts

Recent Developments

• In April 2021, Northrop & Johnson sold 120-foot (37m) Benetti motor yacht TANUSHA, two Pershing yachts LOUNOR and AMJU, the 130-foot (39.7m) classic superyacht ARIONAS from Lürssen. The superyacht features a full-beam master stateroom with an en-suite bath that includes his-and-hers basins, a bathtub, and a separate shower. Below deck, there are two double-bed staterooms and two twin-bed staterooms on the Benetti boat.
• In October 2019, Sinot Yacht and architectural design unveiled the world’s first hydrogen-powered superyacht Aqua, at Monaco yacht show. Two 28-tonne vacuum-sealed tanks of liquified hydrogen were kept at -423 degrees to power the device. The boat was built with the goal of putting individuals on board as near to the water as possible.
• In July 2019, Damen Shipyards Group acquired Daewoo Shipbuilding & Marine Engineering's (DSME) majority stake in the Mangalia shipyard in Romania. Damen's new shipyard at Mangalia, on the Black Sea coast, contains three drydocks with a combined length of 982 meters and 1.6 kilometers of berthing space.

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