One of the most interesting speakers I heard here at the 2010 Fort Lauderdale International Boat Show was Marcel Onkenhout, the CEO of superyacht builder Oceanco. He spoke about as bluntly as I have heard anyone speak about the current state of the large-yacht industry, which is, in a word, lousy. Onkenhout confirmed what the Camper and Nicholsons International Superyachting Index first suggested publicly back in August: Nobody has ordered large, custom megayachts since the middle of 2008, when the global recession began.
“In 2009,” Onkenhout said, “inquiries for new yachts were nonexistent. The only calls we got were from brokers.”
By “we,” he meant the entire superyacht industry, which spun into a brokerage-led market being dominated by what Onkenhout called “fire-sale prices.”
The good news, he said, is that 2010 has seen an “exceptional increase” in inquiries from would-be buyers of new superyachts–but that news is tempered by what he called “an almost complete unwillingness on the part of banks to lend. Until this changes, the superyacht industry will be slow.”
It takes most shipyards three to four years to build a superyacht, from order to completion. Yards worldwide will soon deliver the last of the yachts that were ordered before the recession began. Since there are precious few new orders coming in, “there will be a shortage of superyachts in the market until at least 2013 and 2014,” Onkenhout said.
This reality will have implications for the charter market. The laws of supply and demand apply to charter rates. With top-quality superyachts becoming fewer and older, the handful of new yachts entering the market are likely to enjoy price premiums. Clients are now becoming accustomed to asking for substantial discounts, but the coming years may see clients having to pay full freight for superyacht charters. In fact, prices in the superyacht charter segment may actually rise while smaller yachts recover far more slowly in terms of the charter rates they can demand.
Also interesting to me was Onkenhout’s assertion that once the superyacht market does come back, it will be bigger than ever. Oceanco is using the current down time to expand its facilities so it will be poised to build even bigger yachts than before, with the first orders expected to come in around 2012 for delivery in 2015-16.
Building even bigger is a strong statement from the company behind the impressive, 269-foot Alfa Nero. When the Oceanco team looks to the future of charter yachts, they’re not seeing an eventual return to the good old days. They’re seeing a new crop of 300-footers, a forecast that suggests another history-making boom in the market before the end of the decade.