Introduction to the Yacht Industry in 2024

What are the latest trends shaping the yacht industry in 2024 and the near future? If you’re in the market for a boat or thinking of selling your yacht, it’s crucial to know what direction this fast-changing industry is headed in so you can make effective decisions. After all, this is a highly competitive industry that was worth $26 billion in 2023 and is expected to grow steadily for at least the next five years. In this article, we’re going to examine the key drivers in the yacht industry, look at how they’re driving growth, and see how things are expected to change in the coming years.

Global Yacht Market Overview

Yacht World Market Trends

During the COVID epidemic, many industries took huge hits or completely ground to a halt. Not so for the yacht industry.

From 2020 to 2021, the industry saw over 10% growth, which increased to 11% year-on-year growth in 2022. New buyers were attracted to the freedom and independence that yacht ownership brings.

Growth in the next five years, from 2024 to 2029, is expected to stay strong at 7.62% CAGR (compound annual growth rate). The under-65-foot (<20m) segment of this market is expected to continue as the fastest growing segment as these smaller crafts allow more people to access the yacht market.

North America and Europe together make up 70% of the global yacht market, though interest in yacht ownership is showing growth in the Middle East and the Asia-Pacific (APAC) region. Demand for luxury tourism is increasing globally, and this will likewise increase interest in yacht charters and purchases.

Growth Factors in the Yacht Market

Why is the yacht industry growing? One reason is the number of high-net-worth individuals is on the rise and this is increasing the number of customers in the market as a whole. Millennials are the fastest-growing cohort for yacht purchases, especially of superyachts with millennial owners expected to soon reach 60% of this market. Purchases of superyachts of 100-130 feet (30-40m) are leading this charge. 

Yacht design has also been changing, especially reflecting an increased focus on large windows and outdoor living spaces. Technological advances have helped make these design trends possible. Sustainability in the industry has also been a driver for growth, with builders using eco-friendly materials and more sustainable propulsion systems (hydrogen fuel cells and hybrid electric engines, for example) gaining increasing portions of the market. The specialized hull segment is also expected to continue increasing as adventure and expedition crafts continue to increase in demand.

Finally, following the pandemic, more people have been attending boat shows where they can witness impressive yachts and the yachting lifestyle. This increased exposure has benefited boat builders and brokers, allowing them to convert more people into yacht owners.

Yacht Trader Insights

Marketplaces and Popular Trading Platforms

There are a surprising number of places to look for yachts for sale when it’s time to buy. Brokers are always a good choice because of their specific industry knowledge and connections to yacht builders. However, trading platforms have become much more popular in recent years and excellent deals can be found through these online resources. Yacht trader sites like Yacht World and Boat Trader provide excellent opportunities for sellers to connect and make deals on previously owned crafts. Yacht World can also help owners find brokers who can help them connect with buyers in their areas.

Demand for Pre-Owned vs. New Yachts

As overall demand grows, the pre-owned market has actually been decreasing in favor of new builds. Prices for pre-owned yachts have been increasing and this has skewed the market toward new yachts which are considered better value compared to high-priced used crafts. This trend is expected to continue as more and more new buyers with disposable income continue to enter the market. Brokers helping sellers will need to encourage them to reduce their prices to make them more attractive than new sales.

Yacht Financing and Ownership

Yacht Finance Options and Trends

For most borrowers, yacht loans are for an average of 20 years. Buyers currently need to lay down roughly 20% of the craft’s price tag on average though larger loans over $2 million may charge interest of up to 30%. Financing has the benefits of paying less cash up-front and keeping more money on hand for operational costs.

Fractional ownership of yachts is another increasing trend. Like a timeshare property-sharing arrangement, partners split the purchase price and operational costs of a yacht. This allows each to take on less burden but gain partial ownership over a much bigger and better craft.

Challenges in Yacht Financing

While financing for yacht purchases is becoming increasingly available, there are still challenges to planning out and securing funding to consider. First, it’s important to plan yacht costs carefully since there are a lot more expenses to pay attention to than simply the purchase price. Maintenance costs need to be a part of any yacht purchase budget, as do operational costs, which can include factors such as fuel, crewing, berthing, and licenses. Loans for yacht purchases may have much higher interest than car or property loans because banks consider them higher risk, and there is also less competition in the loan market. These loans are often subject to greater scrutiny for legal and credit risk analysis. 

Boat Buying Process

Purchasing a yacht is a major financial commitment that only a select few can manage. Those who can need to know the process of buying a yacht and the expenses related to boat ownership and operations.

Key Steps in Purchasing a Yacht

• Steps in the yacht purchasing process include:
  • Choose a yacht type (sail, motor).
  • Picking a size range you can afford.
  • Undertaking a marine survey to inspect the craft.
  • Buying the yacht and transferring its ownership. 
  • Planning and preparing a storage space.
  • Taking out boat insurance.

Future State of the Yacht Industry 

The near and medium-term future for the yacht industry looks bright. The industry is expected to grow at a 7.62% CAGR from 2024-2029. Buyers are getting younger, especially in the superyacht market. With used yacht prices running high, a higher percentage of owners are buying new yachts which creates a boon for builders but a challenge for owners looking to sell their yachts.

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