Cautious Optimism

A Yachting Market Analysis

From Burgess President and CEO Jonathan Beckett
by Georgia R. Byrd

 

Burgess President and CEO Jonathan Beckett

One of the world’s foremost authorities on yachting offers his take on the current state of a market that has experienced its share of rough seas in the past two years.

There is good news for the superyacht industry, according to Burgess President and CEO Jonathan Beckett. The market has survived a challenging year and is showing signs of resilience: Buyers are taking advantage of competitively priced existing yachts for sale, as well as an expansive fleet of luxurious megayachts that are attractively priced for charter cruising.

“Over the last 12 months, the superyacht world steadied itself after the economic downturn and seized the opportunities generated by the turmoil,” Beckett says. “The industry will survive, but in a different, more mature form. It is in much better shape now than it was a year ago. It is no longer in free fall, and the result is a new landscape, one in which realism reigns.”

Beckett, who has led the company since 1992, spoke on the heels of a challenging but successful year for his company. The Burgess name represents one of the world’s most comprehensive entities, handling all things related to yachting: brokerage, charter, new-build project management, and operational yacht management. Beckett has kept a close watch on the economic climate of the past two years, with a steady focus on moving Burgess yachts for charter and sale, as well as orchestrating new construction projects.

While sales of existing yachts and charter bookings are improving, Beckett says that for new construction, “a significant improvement is unlikely until 2012, and 2011 will undoubtedly be another tough year for shipyards. However, there is a sense of cautious optimism in the air, and I predict that some new-build orders will be placed this year, due to a combination of clients feeling more financially stable and a few shipyards securing contracts at special prices.”



It’s a Buyers’ Market

According to Beckett, overall sales in the small-yacht (20-40 meters) market have continued to struggle. The midrange (40–55 meters) sector has been increasingly buoyant, but the large-yacht market has proved to be more elusive over the past year, with roughly 10 deals closing at $55 million plus, of which only five were near $70 million plus. Indicators for the year ahead show a very similar pattern.

Forecasting better times ahead, Beckett says that a buildup of the inventory of existing yachts for sale will keep prices at attractive levels, and that will please buyers. Yacht Charters Up for Summer Regarding the charter market, Beckett says that although holiday charters in the
Caribbean were down in 2010, he foresees an impressive lineup of top charter yachts expected to cruise the waters of the Mediterranean this summer.

Yacht Charters Up for Summer

 

“For the majority of clients, their summer charter in the Mediterranean remains the primary focus. Interestingly, the forecast for summer 2011 is already upbeat, with a good flow of early bookings, and the prediction is that a good season lies ahead.”

Beckett stresses that the economy will continue to play a significant role. “Clearly, the superyacht industry is resilient enough to adapt to turbulent economic conditions…but if the world has learned anything over the past two years, it is that in the end, market forces will always dictate.”

With 10 offices globally, Burgess is a full-service superyacht company specializing in sale and purchase, new construction, charter and operational management. For more information, visit burgessyachts.com or call to speak with a Burgess professional: +1 212-223-0410.