|CNBC Report on Megayacht Sales has Charter Implications|
|Written by Kim Kavin|
|Monday, 29 October 2012 00:00|
This past Friday, CNBC uploaded this report stating that new-megayacht sales remain sluggish. Back in 2008, before the global economic crash, builders were receiving orders for 80 to 100 megayachts per year. That order rate dropped to just 10 per year in the crash, and is now at about 20 to 30 per year.
The report cites two primary reasons that the market is continuing to struggle. First is that the economy remains volatile, and buying a megayacht is discretionary spending that can be avoided. Second is that wealthy people no longer want to be seen aboard megayachts, at a time when so many others in the world are struggling just to put food on the table.
While the CNBC report does not address the charter market, I think that this information has clear implications for it. First, slower megayacht sales are actually a good thing for the charter market. There is still an over-supply of charter yachts compared with demand, and the fewer new yachts that come into the market, the better chance there will be for charter supply and demand to even out. In this sense, bad news for yacht builders should translate into good news for charter industry stability.
However, the idea that wealthy people feel uneasy about being seen aboard yachts will affect charter in exactly the same way as it is currently affecting yacht builders. Papparazzi don't generally ask who owns the megayacht that a businessman or starlet is sitting onboard in Monaco or St. Barth's. They simply snap a photo and splash it across the media. In this sense, chartering a yacht can have the exact same effect on public opinion as buying a yacht, and wealthy people may avoid chartering for the exact same reason that they are forgoing new-yacht purchases.
Interestingly, the CNBC report also notes that there is new interest in megayacht ownership from residents of countries such as Brazil and China. Major charter management companies have recently reported charter interest rising in those same nations.
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