By Ian Petts, Client Services Director, Equiom Monaco
With more than 630 yachts on the water and yacht sizes right up to the 65 metre Mikhail S.Vorontsov on display, the Cannes Yachting Festival has grown to become the premier event in the European yachting calendar.
The show marks the end of the European yachting season, but the opening of the US season, and it has been encouraging to see so many US clients and international investors in attendance.
Cannes Yachting Festival leverages the glamour and chic of the French Riviera, against the backdrop of the Iles de Lerins. It is built on the infrastructure of two first class yachting ports and a rejuvenated international airport in Nice, resulting in an exceptional setting. Italian shipyards, recently supported with new investment, put on a stylish exhibition and were joined by a strong representation of other European builders all keen to present the latest models.
The trend this year has been the professionalisation of a now maturing industry driven by pressure from owners, industry investors and the European governments to produce value for money, improve safety and ensure financial transparency and fairness. This has led to more owners, and owner representatives visiting the show and expanding their knowledge of the industry.
Tax-wise, we will see greater harmonisation across Europe, but the real elephant in the room for French based nautical activity is the ongoing and unresolved issue of the 33% withholding tax on yacht charters. This year, we have seen the French tax department be very innovative, strong, and pioneering on the international tax front, with the confidence to take on international companies such as Google, Amazon and Facebook. We are now also experiencing the harmonisation of European taxes and tax law which will bring some welcome clarity to owners in what are still very difficult waters to navigate. If a full Brexit happens we will probably witness an acceleration of this harmonisation trend.
The Brexit outcome is still very uncertain and the integration of many companies and suppliers across Europe in the industry brings real worries, but the fall of the Sterling means that established brands from the UK such as Princess, Oyster, Fairline and Sunseeker have a renewed interest in their product from international buyers looking to profit from a weaker pound.
With global trade conflicts and uncertain global economics, many family offices have been holding cash and conservative portfolio holdings may be delaying some yacht purchases. But with negative interest rates, some exiting returns on stock market investments and the persistence of this economic climate we are seeing families take advantage of more realistic pricing. However, I should caution that an increasing demand for the latest technologies may start to put pressure on re-sale values of older products.
This year’s show has revealed a new generation of entrepreneurs, brokers and suppliers in the market with some exciting, high energy and very innovative products especially in the battery technology, GPS and wireless sectors. There is also a desire from industry veterans to get back to the basics of ensuring that clients experience the most fun and the highest level of service possible.
The core message from what has been an intense show is one of energy, innovation, intelligence, new technologies, materials, composites, consideration for the environment and above all putting the fun back into yachting.
Vive la belle France!
I will be at the Monaco Yacht Show from 25 – 28 September along with the Equiom yachting team. To arrange a meeting, contact me on email@example.com.
This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Equiom to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.