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The global luxury yacht market size was valued at USD 6.40 billion in 2022. The market is projected to grow from USD 7.67 billion in 2023 to USD 13.67 billion by 2030, exhibiting a CAGR of 8.6% during the forecast period.
A luxury yacht is a high-end recreational vehicle offering exclusive and luxurious amenities along with accommodation. These vessels are loaded with the most advanced features for their users. Luxurious yachts include spacious cabins, staterooms, a pantry facility, multiple decks with entertainment facilities, water sports equipment, such as jet skis, and water toys. They are also equipped with advanced navigation and safety systems. These vessels can be privately or commercially owned. Their demand has increased steadily in recent years. This can be attributed to lifestyle changes, such as increasing wealth, recreation & leisure trends, and growing yacht tourism.
Growing Need for Seclusion to Surge Private Yachting Demand Post COVID-19 Pandemic
The pandemic had a major impact on the luxury yacht market growth. As the COVID-19 pandemic spread rapidly across the world, several countries closed their borders and restricted travel. This had a major impact on the travel & tourism industry. Initially, the market experienced a slowdown in sales and demand due to global uncertainty and travel restrictions. Many potential buyers postponed or canceled their purchases, causing a decline in sales. Ever since the first case of infection was reported, people grew more sensitive and cautious about protecting themselves from exposure to the virus. One of the steps that people had adopted toward staying safe was refraining from travel. This led to declining charter bookings, revenues, and demand for luxury yachts. Canceled yacht shows and events kept the potential buyer away from the market.
As travel restrictions eased and vaccination rates surged, the demand for luxury yachts increased. An increase in the desire for seclusion and social distancing among affluent individuals led to private yachting, creating more demand for yachts. The pandemic prompted a shift in travel preferences as well. Remote and off-beaten paths gained popularity among tourists. Buyers were inclined to customize their yachts to suit their requirements, such as personalized onboard amenities, state-of-the-art entertainment systems, wellness facilities, and eco-friendly features.
Despite initial challenges, the luxury yacht market trends demonstrated resilience and adaptability toward changing scenarios during the outbreak. Luxury yacht manufacturers and brokers adjusted their policies to meet the changing customer demands. The market has been recovering, depending on local economic conditions and has indicated a positive outlook.
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Electrification of Yachts a Growing Market Trend
Yacht manufacturers are expected to increase the production of electric yachts as they switch to batteries to produce zero-emission products. The prevalence of clean propulsion technology will drive the growth of electric yachts in the future. Electric yachts have few moving parts and do not require engine oil or gas. Additionally, these yachts are quiet and require little maintenance.
Electric luxury yachts produce more torque and efficiently convert stored kinetic energy into electricity. These yachts are environmentally friendly and emit no carbon dioxide, thereby reducing greenhouse gas emissions. A tough regulatory environment for traditional yachts and rising fuel prices will pave the way for the solid growth of electric yachts in the future. Huge investments from various manufacturers and government support measures will accelerate the demand for electric yachts. Moreover, companies are investing in R&D to develop new concepts for electrification. For instance, in June 2023, Porsche and Frauscher Shipyard announced the development of the Frauscher x Porsche 850 Fantom Air, an innovative electric yacht.
This venture marks Porsche's ambition to extend its electric prowess beyond the road and racing cars to promote maritime sustainability. This model combines aesthetics and innovation; the yacht utilizes the Premium Platform Electric (PPE) technology. It is integrated a high-capacity 100 kWh lithium-ion battery, the latest-generation permanently excited synchronous electric motor (PSM), and state-of-the-art power electronics.
Increasing Number of UHNWIs to Surge Product Demand
The proportion of Ultra-high Net Worth Individuals (UHNWIs) continues to rise. The superyacht industry has benefited from the proliferation of billionaires and super-rich people. Most, if not all, yacht brokerage firms are reporting record sales at the world's leading shipyards and their backlogs continue to grow.
This positive trend has also spread to the yacht market, with record numbers of first-time charters registered in 2021. New charter customers accounted for around 40% of the luxury charter market in 2021, according to the latest yacht marketing insights from Fraser, one of the world's leading yacht brokerage firms. More ultra-rich people want to make extravagant investments to suit their lifestyle. The rising interest in luxury yachts around the world will drive the market. In addition to this, the number of wealthy individuals around the world continues to grow. The luxury yacht market share is expected to grow at a robust pace during the forecast period owing to the rising interest in luxury cruising and a steady increase in high-net-worth companies, especially in the Asia Pacific region.
Environmental Concerns Related to Yachting Activities to Restrain Market Growths
Yachts have a significant impact on marine ecosystems. In busy waterways, the presence of luxury yachts can lead to algae and sedimentation, blocking solar radiation, degrading the water quality, and hampering marine life. In addition, sediments on yachts can change the water chemistry, making it either alkaline or acidic. The chemicals used to wash, operate, and protect yachts often mix with the water and seriously impact the environment, killing and debilitating wildlife. Since freshwater is commonly used for drinking water and fishing, such toxins in freshwater can affect humans as well.
New motor yachts, jet skis, sailing yachts, and other leisure boats have strict limits for nitrogen oxides (NOx), particulate matter, and hydrocarbons (HCs). In September 2021, representatives from the California Air Resources Board (CARB) proposed emission regulations for commercial yachts. Through these regulations, CARB aims to minimize harmful gas emissions. As recreational sailing is popular, protecting marine ecosystems and the environment has become an uphill battle. Regulatory measures and educational programs help raise awareness and reduce yacht-related pollution. But protecting aquatic life and human health requires a concerted effort by yacht manufacturers, consumers, and regulators.
According to the International Maritime Organization, marine tourism resources are subject to various global threats to the oceans and marine systems, mainly due to anthropogenic factors. These include climate change, overfishing, bottom trawling (fishing nets along the seafloor), migration of invasive species, changes in inputs of waste, nutrients, and sediments to coastal and marine ecosystems, coastal urbanization, and loss of resources and natural capital in coastal areas, especially coastal wetlands.
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Higher Comfort Offered by Motor Yachts to Boost Their Demand
The market, based on type, is fragmented into motor yachts and sailing yachts. Motor yachts are the dominant and fastest growing segment. Motorized yachts provide larger space since they do not rely on winds and can cruise at high speeds, making them suitable for long-distance travels.
Sailing yachts have also showcased a significant growth rate in the market. This growth is due to their eco-friendliness and affordability. Sailing yachts have lesser budgets than motor yachts and are safer and more reliable.
Up to 50 Meters to Hold Largest Market Share Due to Affordability and Diverse Use
By size, the market is classified into up to 50 meters, 50 to 100 meters, and more than 100 meters. The up to 50-meter segment accounts for the largest global luxury market share. These yachts can be utilized for both personal activities and commercial use.
The demand for superyachts and megayachts is rising in most developed countries and there has been a notable surge in tourism in these nations. Therefore, the 50-100 meters segment is expected to record the highest CAGR, while the more-than 100 meters segment may exhibit a significant growth rate during the forecast period.
Rising Disposal Income to Boost Product Use for Personal Activities
By application, the market is divided into personal use and commercial use.
In 2022, the personal use segment held the largest market share. Rapid urbanization, rising living standards, rising personal disposable incomes, and growing population of high net worth individuals have increased the spending on luxury goods and leisure activities. These factors are anticipated to fuel the growth of the personal use segment. Therefore, luxury yacht services have also seen a significant increase in demand in recent years.
Rising commercial get-togethers, such as corporate events, parties, sailing competitions, and fishing activities have boosted the commercial use segment growth.
Europe Luxury Yacht Market Size, 2022 (USD Billion)
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Regionally, the market is analyzed across North America, Europe, Asia Pacific, and Rest of the World.
Europe is expected to hold the largest market share. This region has the potential to dominate the market due to the strong growth of maritime tourism and wide range of tourist destinations. Countries, such as Croatia, Greece, France, Spain, and Italy are the region's top tourist destinations and highest income earners. The rise in the popularity of fishing activities and water sports and growing upper-class population are expected to drive the market development in the region during the forecast period. Rising booking of European air tickets, strong online demand for yacht charter service providers, and increased issueance of vessel permits are expected to drive market growth in the region. The region's wealthy population is also likely to drive the market growth.
North America holds the second-largest position in the market as the region's diverse coasts have become great cruise destinations. The U.S. dominates this regional market due to the presence of major charter hubs within the country.
Asia Pacific is expected to be the fastest growing region in the next few years. This growth has been credited to rapid urbanization, rising living standards, and rising disposable incomes. Leisure activities, such as fishing and water sports are becoming more popular in Thailand, Malaysia, Singapore, China, Japan, and Australia. Maritime tourism is also rising, presenting significant opportunities for yacht manufacturing companies. In addition, aggressive government initiatives for marine tourism development, especially in countries, such as India and China, are expected to boost the regional market growth.
Significant Product Offerings by Azimut Benetti Will Strengthen its Growth Prospects
Azimut Benetti is the first among all key players leading a global private group in the yachting sector, established in 1969 and headquartered in Viareggio, Italy. It has more than 50 years of experience in the sector. The company has achieved 60% growth in the last four years, and has 526,000 sq.m. of a production facility and 138 showrooms in 80 countries globally. It is known for continuous innovation and experimentation; it has been the world’s leading manufacturer of mega yachts and shipyard with the widest range of models for 23 years. The company has 168 projects under construction, totaling 5,991 meters in length, making it rank first, for the 23rd time in a row, in the annual ranking of the largest yacht builders. The company has major brands, such as Azimut, Benetti, Yachtique, and Lusben.
An Infographic Representation of Luxury Yacht Market
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The market report provides a detailed analysis and focuses on key aspects, such as leading companies, product types, end-users, design, and technology. Besides this, it offers in-depth insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the market's growth in recent years.
CAGR of 8.6% from 2023-2030
Value (USD Billion)
Fortune Business Insights says that the global market was valued at USD 6.40 billion in 2022. The global market is projected to grow to USD 13.67 billion by 2030.
The market is expected to register a CAGR of 8.6% during the forecast period of 2023-2030.
Increasing number of UHNWIs across the globe is expected to surge the market growth.
Europe led the global market in 2022.
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