“THE VIEW from the breakwater at Nice has not altered too much over the decades: stately harbour front, azure sea. What has changed is the size of the yachts. Over the past decade superyachts, defined as any private boat over 24 metres long, have become as common as gulls at a fried-fish stand. Europe is not only a playground for such craft; it is where most of them are built. But the war in Iran has plunged the industry into stormy waters.
Europe is in trouble in many manufacturing sectors, from automobiles to chemicals, but it dominates superyacht construction. Over half of the more than 1,000 big boats built last year were made in Italy. Four of the next five top producing countries are European. Purveyors of floating palaces are dotted across the continent. Andrey Melnichenko, a Russian magnate, turned to Nobiskrug in Kiel, Germany. Howard Schultz, ex-CEO of Starbucks, bought his (pictured) from Feadship in the Netherlands.
The giant pleasure-cruiser business is usually resilient to crises. After 2008 orders dipped, then recovered, as the drop in ultra-wealthy fortunes was short-lived. The pandemic only increased demand: salesmen marketed them as an escape from lockdown. The total number of superyachts on order rose from 821 in 2021 to 1,093 today. This year, however, orders are spluttering. At Ferretti, a large Italian yacht-builder, they were down by a third in the first quarter compared to the same period in 2025, in large part because of war in the Gulf.
One reason for the slump is the rising cost of marine diesel. But that mainly affects demand for smaller boats, says an industry insider; superyacht owners are less price-sensitive. More worrying is the prospect that clients in the Middle East may not be able to take delivery of their boats.
And the war has highlighted the lethality of cheap military drones, which may mean that superyachts are no longer the secure floating fortresses that the world’s richest expect them to be.
A drop in orders would be bad news on a continent that could use a manufacturing success story. Italy’s yacht industry employs 168,000 people and added €13bn ($15bn) to its economy last year, about 0.6% of GDP. Employment in the sector rose about 6% in 2024, the last year measured, according to Confindustria Nautica, an Italian yachting-industry association. It may yet stay afloat: one broker notes that America, the biggest market, is growing in spite of the oil crisis. Since last July, Uncle Sam considers vessels majority-owned by American firms tax deductible.” [1]
1. Ruling the waves. The Economist; London Vol. 459, Iss. 9501, (May 30, 2026): 32.
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