Some Covid buyers are selling

Some pandemic-era yacht owners are returning to land.

The pandemic has led to a “massive increase” in yacht sales, said Richard Allen, chief operating officer of Hong Kong-based yacht company Simpson Marine.

“We saw a lot of these people who had their boats for two years and now they wanted to travel in some way,” he told CNBC. “In speaking with other people in the industry, we have seen an increase in broker activity in the last few months of … boats being sold.”

That was to be expected, said Paolo Casani, CEO of Monaco-based yachting company Camper & Nicholsons.

“As an industry, we have sold more than twice as many yachts worldwide [in 2021] than 2019,” he told CNBC. When this happens, “they go to market a few years later.”

Enthusiasm for yachting stays high, even when sales have declined since 2021, said Casani.

“The industry is returning to 2019,” he said. “And we have to differentiate between brokerage and new construction, because the demand for new construction is still quite high.”

As more yachts enter the brokerage market, prices have fallen, albeit barely, from pandemic-era highs, he said.

“Prices are still quite high,” he said. “There is still a gap between demand and supply… but we assume that there will be a reduction over the course of 2024.”

However, some yacht buyers in Asia aren't selling, Allen said – fairly, they're bartering for larger vessels.

“Some have really enjoyed the boating lifestyle and are already in the process of upgrading to larger boats,” he said.

Asia – a continent of growing prosperity and various island nations, a lot of that are bathed in year-round warmth – has long been seen as the subsequent frontier for global yachting growth.

Casani and Allen, who spoke to CNBC on April 26 while attending the second annual Singapore Yachting Festival, agreed that the continent's yacht market is growing.

But, Casani said, the pace is “slower than expected” for a lot of reasons, including culture, lifestyle and lack of infrastructure.

“But we still believe Asia has very big potential,” he said.

Allen said the region's disparate and burdensome “rules and regulations” are hindering progress.

“We need to make it easier for boats to move between the region,” he said. “In one country you might be able to drive a boat of a certain size, but not in another. Things like that – let’s say the red tape.”

Complex visa requirements for foreign boat crews are problematic, as are high import taxes, which might be as high as 40% in some markets, he said.

“We need to do a lot of lobbying with governments to make it easier to import boats,” Allen said. “There are a lot of lobby groups like ICOMIA… that are working much more closely with the different retailers to have a voice with the government.”

The International Council of Marine Industry Associations, or ICOMIA, held a two-day conference ahead of the Singapore Yachting Festival to deal with the industry's issues, from sustainable propulsion to the shortage of marina infrastructure in high-potential countries reminiscent of Indonesia, Philippines and Vietnam.

Simpson Marine estimates the worldwide marine leisure market will reach an estimated $46.5 billion in 2027 – which it says will inject into the local economy through job creation and tourism revenue.

“The yachting industry employs thousands and thousands of people building boats, servicing boats and servicing all of the components,” Allen said. “This is a … great industry for countries to embrace.”

Newer types of ownership are making yachting more cost-effective, opening the industry to more people. One model that is especially popular in Australia is fractional ownership or syndicate ownership, where owners buy a share of a yacht, he said.

Others eschew ownership altogether, choosing flexible subscription models which are now the norm for a lot of types of entertainment, from music to television.

“We have seen massive growth in boat clubs,” Allen said. “It’s a bit like joining a gym or a golf club. You pay a monthly membership and may use a ship as many days per week. And that's highly regarded with individuals who don't actually need all the effort that comes with having your individual boat, a yacht.”