Yacht Charter Market Size, Share & COVID-19 Impact Analysis, By Yacht Type (Motor Yacht, Sailing Yacht, Others), By Length Type (Up to 40m, 40 to 60 m, and Above 60m), By End Use Type (Leisure, Business, and Others), By Contract Type (Bareboat and Crewed) and Regional Forecast, 2020-2027

The global yacht charter market size was valued at USD 6.50 billion in 2019 and is projected to grow from USD 6.83 billion in 2020 to USD 10.82 billion in 2027 at a CAGR of 6.6% during the 2020-2027 period. Based on our analysis, the global market exhibited a growth of 5.04% in 2020. The global impact of COVID-19 has been unprecedented and staggering, with yacht charter witnessing a positive demand shock across all regions amid the pandemic. The sudden fall in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Yacht charter is a service of hiring boats for recreational or leisure purposes. Yachts can be privately owned (individuals or companies), or they can be rented for hire. Various luxurious facilities are installed on yachts with a professional crew on board. These yachts are rented for corporate and leisure purposes and offer a seamless luxury experience with utmost comfort and high standards. Yachts are used for sailing & fishing in few parts of the world, especially in European countries. They provide all the benefits from an amazing adventure to complete relaxation.

The original equipment manufacturers are steadily focusing on developing high-speed yachts to fulfill the increasing demand for marine tourism and water sports activities. Also, the yacht rental companies are offering convenient chartered yacht booking using online platforms and mobile applications. Therefore, the market is expected to gain popularity in the forthcoming years.

Decreasing Demand for Yacht Charter amid COVID-19 to Hamper Market Growth

The global outbreak of the Coronavirus (COVID-19) disease has had a severe impact on the travel and tourism industry, especially the yacht industry that has stalled due to the rapid spread of COVID-19 in the world. This pandemic has caused immense uncertainty in the industry and a panic situation for all industrial value chain members involved. They cannot forecast the resuming of yacht rental business. Therefore, the industry key players are putting their utmost efforts to overcome the uncertainty caused by the pandemic by incorporating safety and precautionary measures into the yacht charter agreement. It is worth noting that considering the type of the industry, people are optimistic that once the pandemic situation eases out, the charter market is set to rebound back rapidly.

Although the pandemic's span is difficult to anticipate, recent announcements of the arrival of the COVID-19 vaccines in early 2021 are likely to favor the travel and tourism industry. Moreover, many companies are now resuming the chartering services, thereby implementing various safety procedures to safeguard both the guests and the crew.

LATEST TRENDS

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Augmented Involvement of Intermediaries to Set a Positive Trend for Market Growth

Brokers are increasingly participating in the market, which is also a development trend in the yacht industry, as the number of buyers and charters is increasing. Their work mainly includes arranging visits or viewing, processing paperwork, negotiating sales terms, and assembling and allocating sales prices. Also, the visual medium through phones and tablets in which customers get to watch the actual insights of yachts is gaining attraction, thus, increasing the hiring business of yachts.

The owners are focusing on entering the hospitality and leisure markets. For instance, the Ritz-Carlton Group announced the Ritz-Carlton Yacht Series launch from May 2018, which comprises innovative duplex suites, luxurious restaurants, spas, and bars. Similarly, several companies create a new category of cruise ships, small holiday boats, and luxury yacht ships. Such involvement will boost the market growth in the forthcoming years.

DRIVING FACTORS

Growing Number of Private Islands on Cruise Itineraries to Drive Yacht Charter Market Growth

The trend of renewing marine fleets has increased by about 7% to 8% over the past couple of years. Europe and the Mediterranean regions hold a major share in the yacht industry due to various factors such as the proximity of its yards to many owners and the vast stretch of coastal areas with high growth in the tourism sector. The rapid growth in adventure travel and cruise expeditions is expected to favor the market’s growth. According to BRL consultants, more than 30 expedition cruise yachts were ordered, most of which signed a contract in 2017.

Several yacht manufacturers invest in private islands that permit yacht charterers to provide their customers with private and high-class beach experiences. Moreover, cruise lines permitted ports on a total of seven private islands in 2017. For instance, Norwegian Cruise Lines purchased a private island of more than 250 acres in the Bahamas known as the Great Stirrup Cay. Also, the cruise line has invested about USD 250 million to expand, renovate and enhance the amenities on the island. Therefore, this growing trend from the millionaires, coupled with the increase in hospitality services, is expected to boost yacht rental services in the forthcoming years.

Increasing Inclination towards Marine Tourism to Boost Market Growth

The increasing disposable income of the customers and the growing inclination towards marine tourism and leisure activities such as sailing are projected to be the driving factors for the growth of the global market for these charters. Recreational boating has gained enormous traction for the past few years, which, in turn, has paved the way for yacht rental services. Moreover, booking systems permit customers to charter yachts when booking flight tickets. This is ultimately propelling the growth of the market.

Favorable government initiatives and programs to promote marine tourism are predicted to leverage the market growth. For instance, the Indian government is upgrading the infrastructure and services to support the local tourism and port city tours to promote cruise traveling that is likely to escalate by-sea arrivals to 1.5 million tourists by 2030-31. Also, the Indonesian government renewed its marine tourism policy by eliminating the CAIT (Indonesia Territory Customs Clearance Approval) license. This policy predicts a significant increase in yacht visits to Indonesia that will generate more than 500 million USD of revenue.

RESTRAINING FACTORS

High Cost of Yachts May Restrain Market Growth

The price of chartering a yacht depends on various elements, including the charter destination, type of yacht, local and cross-border taxes, and the basic fees. As a result, these charters have a wide range of rental rates. Besides this, the charters can cost ranging from USD 10,000 per week for catamarans and smaller sailing yachts up to more than USD 2,00,000 per week for the supremely luxurious motor superyachts.  Also, there are several hidden costs and non-mandatory expenses such as value-added tax (VAT) and other taxes, allowances, insurance, crew gratuity, which costs around 15% to 30% of the basic price. These costs become an obstacle for many customers in developing economies, which further limits the growth of the market.

SEGMENTATION

By Yacht Type Analysis

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Motor Yacht Segment Dominates the Market

Based on yacht type, the market is segmented into motor yacht, sailing yacht, and others.

The motor yacht segment holds the largest share globally and is expected to retain its leading position in the market throughout the forecast period. This growth can be attributed to the growing demand for motor yachts for personal and recreational activities in various countries across the world. The motor yachts offer several advantages such as enhanced speed, power, and ability to cover longer distances in less time. Moreover, motor yachts can be sailed in shallow water, offering its customers to navigate almost all coastline and narrow and shallow creeks. Furthermore, the increasing sporting activities, boating events, and tournaments create high demand for motor yachts in the market.

The sailing yachts segment is expected to show steady growth in the market owing to the growing demand for environment-friendly yachts among people. Fuel emission is one of the polluting by-products of modern times, and a substantial amount of this is contributed by the yacht industry. Moreover, sailing yachts are cheaper than other types of yachts and can travel more distances than motor yachts. For instance,

By Length Type Analysis

Up to 40 meters Segment is expected to hold the Largest Market Share

Based on the length type, the market is segmented into up to 40 meters, 40 to 60 meters, and above 60 meters.

The up to 40 meters’ segment accounts for the largest share in the global market. A large number of yachts have a length ranging from 30 to 40 meters. These yachts can be used for both personal as well as recreational purposes. The dominance can be attributed to the various factors, including the ships with wind sailing capacities that ensure favorable wind directions and help save fuel. The easy availability with affordable prices and low maintenance charges, anchoring capabilities in shallow waters, and low mooring costs make it the preferable choice for the end-users.

The growing trend of using renewable energy such as wind and solar energy for the propulsion of ships in developed countries of Europe and North America is expected to drive the demand for yachts with length up to 40 meters as the propulsion energy required for these yachts is less.

Rapid urbanization, improved living standards, increasing disposable income of individuals, and rising number of higher class sections of the population have increased the spending capacity of individuals on luxuries and recreational activities. Thus the yacht service market has also seen a huge demand growth over the past couple of years. The trend observed in the yacht manufacturing sector shows that the average length of the yachts increases by 3 cm every year. This is due to the growing demand for Superyachts and Giga yachts in most developed countries and an overall increase in the tourism industry in these regions. Thus, the 40 to 60 meters segment is expected to grow at a substantial rate during the forecast period.

By End-User Type Analysis

Leisure Segment is anticipated to account for the Largest Market Share

Based on the end-user, the market is further segmented into leisure, business, and others.

The leisure segment holds the major share in the global market in terms of volume and value due to increased tourism. The yacht rental industry is majorly driven by the increasing inclination towards luxury cruising, especially from the high net worth individuals (HNWI) and ultra-high net worth individuals (UHNWI) worldwide.

The new tourist destinations that offer luxury cruises and beautiful scenery have been encouraging wealthy and ultra-rich people around the world to discover these tourist destinations. Moreover, the companies focus more on providing enhanced and extensive luxury cruising for their customers by developing premium features like infrastructure, internet facilities, and bars and restaurants, which is expected to further boost the yacht industry in the leisure segment.

The business segment is gaining popularity in the market as the yacht business is a simple concept and is structured much like any other profit-earning business. Higher-class individuals or high-tax payers are increasing their investment in yachts and operating them actively for profit either through third-party management or by themselves. Especially, the US buyers who fall under the high-income tax brackets choose this option of ownership.

For instance, in April 2020, MYSEA announced its appointment as the Global Charter Central Agent of M/Y FLEUR Yacht with several premium facilities such as a retractable roof, Jacuzzis, and outdoor cinema, among others.

By Contract Type Analysis

Bareboat Segment is Anticipated to Hold Major Market Share

Based on the sales channel, the market is further segmented into bareboat and crewed.

The bareboat segment holds the major share in the global market in terms of volume and value due to increasing environmental and safety issues. A bareboat charter is an arrangement of renting ships by an individual, whereby no provision of crews and services is available. The boat is to be skippered by the individual himself. The individual or a group of people who rent the boat from the owner are responsible for taking care of the boat. Many bareboat chartering companies also provide courses to train basic navigation techniques and prepare people for bareboat chartering. Sometimes, these companies also offer captain charters, which means a captain on board but no other crew.

Moreover, most of the bareboat yachts that are chartered are of length ranging up to 40 meters. Usually, people hire bareboat yachts for fishing activities, sports events, or sailing from one destination to another.

The crewed segment is expected to showcase substantial growth owing to the growing demand for superyachts and the increasing involvement of cruising lines and their hybrid business models.

REGIONAL INSIGHTS

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Europe stood at USD 8.01 billion in 2019. The region is likely to dominate the global yacht charter market due to many tourist destinations and the marine tourism industry's high growth rate. Countries such as Croatia, Greece, Spain, and Italy are among the most predominant tourist destinations and contribute a major share in its revenue. Also, the increasing popularity of fishing activities, water sports, and the growing number of higher class individuals are likely to boost the development of the market in the region during the forecast period.

The cooperation between the flight booking and online charter service providers in Europe and the increasing number of permits issued for watercraft are expected to boost the market growth. Also, the existence of high net-worth individuals is likely to promote market growth. For example, according to the European Commission's report on the navigation and tourism industry (2017), there are about 6 million ships in European waters, of which 60,000 chartered yachts have an annual turnover of 6 billion euros.

North America holds the second-largest position in the market as the presence of a diverse coastline is sanctified with a wealth of cruising destinations. The United States ranks first in this regional market as major yacht hiring locations are situated.

Asia Pacific is expected to emerge as the fastest-growing region in the forthcoming years. This growth is attributed to the rapid increase in urbanization, improvement in the standard of living, and rising disposable income leading to evolving preferences of the individuals. The growing popularity of recreational activities such as water sports and fishing and growing marine tourism in countries such as Thailand, Malaysia, Singapore, China, Japan, and Australia are creating major opportunities for yacht rental businesses. Furthermore, various favorable government initiatives implemented for the development of marine tourism, especially in countries such as China and India, are projected to drive market growth.

KEY INDUSTRY PLAYERS

Significant Product Offerings by Dream Yacht Charter Company to Brighten its Market Prospects

Dream Yacht Charter is the world’s leading yacht specialist for charter management, brokerage, and private yacht ownerships. The company has pioneered in providing easy and simple chartering, professional consulting, tailored solutions. It is also known for innovation that brings out new sailing destinations and a wide range of charters, including skippered, bareboat, sabbaticals, crewed, and cabins.

The company owns several largest yacht manufacturers such as Dufour, Aquila, and Fontaine Pajot. In 2019, the company started a MoreWomenAtSea campaign that encourages many women to get into the water and acquire sailing training. In February 2020, the company announced its partnership with the river cruise specialist Les Canalous to expand and promote canal boating vacations all over Europe.

LIST OF KEY COMPANIES PROFILED:

• Dream Yacht Charter (Maryland, USA)


• Worldwide Boat (Florida, USA)


• Fraser Yachts (Monaco, Europe)


• NORTHROP & JOHNSON (Florida, USA)


• Nicholson Yachts (New Port, USA)


• Simpson Marine Limited (Hong Kong, China)


• Ocean Independence (Zurich, Switzerland)


• MasterCraft Boat Holdings, Inc. (Tennessee, USA)

KEY INDUSTRY DEVELOPMENTS:

• March 2020 – Fraser Yachts added a new motor yacht RANIA42M / 137'10" Benetti to its charter fleet. The new motor yacht has adopted a modern and stylish design with a renowned studio, Redman Whiteley Dixon, with a spacious interior. The charter further added Pendennis 55M / 180’ STEEL, an expedition yacht comprising features such as a hot tub on the spacious sun deck.


• February 2018 – MasterCraft Boat Holdings, Inc. announced its partnership with MarineMax, Inc., the world’s largest recreational yacht and boat retailer, to attain assistance for promoting its new brand, Aviara. The collaboration between the two companies is likely to benefit the product adoption due to its uniqueness and first-of-its-kind.


• May 2020 – Ocean Independence announced the latest 44m Burger motor yacht PURE BLISS to its yacht charter fleet. PURE BLISS is a superyacht that can accommodate 12 guests and comprises several unique features, including an excessive range of water sport toys and elevator access up to three decks.

REPORT COVERAGE

An Infographic Representation of Yacht Charter Market

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The market research report provides a detailed yacht charter market analysis and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth over recent years.

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