Superyacht building boom creates a supply crunch and crew shortage for ultrarich buyers

Wealth

The superyacht “Kismet”, currently owned by Pakistani-American billionaire Shahid Khan, is seen moored near Tower Bridge on October 21, 2021 in London, England.
Leon Neal | Getty Images

More than 1,000 superyachts are now in production or on order, as the global rich seek refuge from Covid-19 and crowds on their nine-figure floating palaces.

According to Boat International’s 2022 Global Order Book, a record 1,024 superyachts — defined as yachts over 80-feet long — are in construction or on order, up 25% over last year and surpassing the last peak in 2008. With shipyards straining to keep up with demand, wealthy buyers are being told they have to wait three to five years for a custom superyacht.

“The shipyards are very full,” said Jonathan Beckett, CEO of Burgess, a yacht brokerage and management firm. “They are doing their best to satisfy customer requirements, but it’s not easy.”

From Jeff Bezos’ new 416-foot sailing yacht to Project Black Shark, a mysterious 252-foot yacht designed with a “shark-like skin,” the sheer number and size of yachts under construction is unprecedented, according to industry executives. The total length of superyachts scheduled to be delivered by 2026 would stretch more than 24 miles, according to Boat International.

Superyachts can cost anywhere from $2 million to $3 million to more than $500 million depending on the size and complexity of the vessel.

Most of the demand is coming from the U.S., where soaring stock markets, IPOs, SPAC deals and crypto have created trillions of dollars of wealth during the pandemic, Beckett said. The U.S. has 500 more billionaires now than it did before the pandemic, ending the year with around 2,755, according to Forbes.

Many of the new and existing rich accelerated their plans to buy a superyacht over the past two years amid growing concerns about public health, Beckett said.

Workers pass up materials as they install scaffolding around a superyacht at the MB92 Group shipyard in Barcelona, Spain, on Wednesday, Nov. 17, 2021.
Angel Garcia | Bloomberg | Getty Images

“Covid made people sit up and reevaluate their lives,” Beckett said. “A lot of our clients felt impenetrable and secure, and I think Covid made them feel vulnerable. So they said ‘why put off for another five or 10 years buying a yacht and enjoying myself with my family, when I could be doing it today?'”

The rush to buy superyachts has created shortages of crew, dock space and shipyards. Yacht builders around the world — but mainly in Italy, the Netherlands and Germany — are struggling with labor shortages, material shortages and space constraints.

According to Boat International, superyacht inventory is sold for 2022, most for 2023 and “2024 is already being eyed on the semi-custom front.” The number of boats started without owners — or “on spec” — is now the lowest on record.

While prices in the superyacht industry are highly variable and opaque, demand is pushing prices higher, Beckett said.

“Prices for new builds are going up,” he said. “It’s difficult for shipyards to quote a fixed price, since the cost of materials may escalate over the next 12 to 24 months, but at the end of the day everyone wants a fixed-price contract.”

Today’s state-of-the-art superyachts have the typical amenities like pools, helipads, jet ski garages and gyms. The hottest new amenity is called a beach club. It’s a giant leisure space at the yacht’s stern that has retractable balconies, lounge decks, spas and dining areas that offer easy access to and from the water.

The largest motor yacht to be delivered this year was the 464-foot ”Nord,” built by Germany’s Lurssen Yachts. It has a retractable helicopter hangar, a sports and diving center, 14 custom tenders (the boats used to go to and from the yacht) and a submarine.

A growing number of yacht buyers are ordering “expedition” yachts, which are sturdy, military-like explorers that can sail through ice, storms and harsh conditions to explore remote corners of the world. Expedition yacht orders grew 33% this year, according to Boat International.

Beckett said that just like with Land Rovers and Mercedes AMG G 63 SUVs, the wealthy like the look of adventure vehicles even if they rarely use them for their engineered purpose.

“Expedition yachts are a trend,” Beckett said. “People like the look of them, but people who buy expedition yachts usually don’t go on many expeditions. They’re more likely to be anchored off [the French Riviera’s] Cap Ferrat.”

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