"The economy of yachting: the history of the fields of razor fields"

A short look at the yachting industry from the outside would only show its surface features, luxury luxury, astronomical selling prices and an insane economic structure with exorbitant purchase orders. However, some of these facts are true, some realities are often overlooked in the yachting industry, and we decided to analyze the depth of the yachting economy.

First, we must declare that buying a yacht is not a rational decision. The factors involved in the decision-making process vary from unquantized personal taste to ego and status. Since maintenance costs fluctuate by about 10% of the original purchase price, a yacht can hardly be regarded as an investment in the era of post-crisis crisis. Indeed, despite the fact that the freight market has increased significantly over the past five years due to the large number of owners selling their yachts to get rid of annual costs and recovery in world markets, chartering is often viewed as a way of recovering costs than a way of making a profit. It seems that the yacht is a recreational, lifestyle that makes it very dependent on market conditions. Consequently, the emergence of strong, powerful brands is important for companies trying to sell these high net worth customers.

At first glance, it seems that the industry should have high profits due to this individual system and the lack of inventory. When we look at financial data from shipyards around the world, the numbers, however, point to a different story. Due to the high prices of each project, the turnover is usually huge, but the profit remains insufficient. In 2014, the company Princess Yachts, based in the UK, built a yacht at 239.6 million pounds and lost 11 million pounds. In 2015, the yacht builder, however, recovered from 1.7 million pounds in profit to 239.7 million pounds.

The princess works well in this sector, since several builders of yachts, based in Italy, are forced to close or buy out external groups of investors. Cantieri di Pisa, formerly part of the Baglietto group, was acquired by Mondo Marine. Baglietto himself was saved only in 2012 by Beniamino Gavio after the group posted losses of 25 million euros in 2008 and 105 million euros in 2009. Such results for shipyards were found not only in Italy. In 2014, it was announced that the Dutch company Oceanco would buy the Turkish shipyard, Proteksan Turquoise, whose growth was interrupted by the infamous sinking of 60-meter yoga in Greece in 2012.

Perhaps with a new focus for the laser focus control and operational design industry, a new model has emerged as part of the yachting. Iconic US yacht builder, Palmer Johnson, announced the closure of Sturgeon Bay to move production to Northern Europe, stating that the European market was stronger for its yachts. Probably the shipyards that have done the best in the last five years are based in the gold mine of the yacht sector in Northern Europe. Amels, a subsidiary of Damen Group, sold 28 models of its limited edition series and another 8 people and 1,000 people working in the yard. Lursen is responsible for launching hippos in the yachting world, such as Azzam, Eclipse, Topaz or more recently Project Omar. Feadship, a joint venture of Royal Van Lent, the shipyard of De Vries and engineering company De Voogt, launched its flagship 101 meter symphony earlier this year.

However, the construction of yachts is not the only large market sector. The service industry that develops around yachting is substantial and is mainly responsible for marketing and attracting new customers. The global yacht charts market was estimated at $ 35 billion in 2014 and is expected to reach $ 51 billion by 2020, according to research and markets. Knowing that typical agency commissions for the sale range from 10 to 15 percent, income for charter and brokerage agencies looks impressive, as does the high turnover at the shipyards. However, one of the best charter / brokerage agencies Camper & Nicholsons international was sold to invest in Colosseum for 1 million euros after the liquidation of its parent company, Rodriguez Group. Prior to exclusion from the stock exchange in 2012, Y.CO, another major player in the brokerage company for the sale of yachts, posted a profit of £ 14,650 for 2011. On the other hand, Merle Wood, head of Merlewood & Associates, is one of the most successful, but discrete, American brokerage agencies own the 150-foot yacht.

What these earnings figures show across the industry is that the yacht business is primarily associated with brand control. Yes, asking prices look extremely high, but the reality of production costs shows that they are quite justified. Indeed, according to available data, it can be said that buying a yacht is actually cheap for what you get, and that the market for services and construction is very efficient. In fact, this is what you expect from an industry that serves exceptionally successful people who understand the costs associated with themselves and do not want to overpay. In turn, this explains the often unexpected bankruptcies of small yards, who cannot find buyers for a new project, go for speculative assemblies and, therefore, for gambling debts, that they will be able to sell the yacht. In conclusion, it appears that the only defensive companies in the yachting sector can have scale, as they make them less dependent on individual buyers and allow them to plan for the longer term.