By Ian Petts, Head of Yachting and Aviation
On 7 -12 September 2021, Ian Petts (Head of Yachting and Aviation), together with Damien Gigoux and Thomas Riche attended the 2021 Cannes Yachting Festival, Europe’s premier event for yachting. Here Ian shares his key takeaways from the show.
The idyllic Cote D’azur in the heart of the French Riviera played host to 600 yachts (from 3 to 45 meters) and 430 exhibitors.
Exhibitors reported that yacht trials of new vessels were up, implying a heavy concentration of serious buyers. The organisers of the event reported equal visitor numbers to the pre COVID 2019 show and there are claims that the COVID measures taken at the show acted as a natural filter to ensuring quality and interested visitors only.
The Italian and British shipyards who typically dominate the show such as Ferretti, San Lorenzo, Princess and Sunseeker were on strong form and I’m sure all were pleased to reconnect with the industry after 18 months without shows.
The general vibe from exhibitors at the show was positive. On the yacht registration side, it was good to see the San Marino aircraft registry taking a stand following its expansion to include yachting. This registry is widely known to have no restrictions on crew nationality, competitive pricing and guaranteed fast turnaround of registrations.
Tenders and toys
The ‘tenders and toys’ section of the show was, as always, super vibrant with foiling technologies dominating the toys together with ‘Seabob’ type variants and a lot of discussion on electric power technologies. Following discussions with designers it will be interesting to see if this foiling technology and battery technology feeds through to the larger superyacht hulls.
The sailing section of the show in Port Canto was busy with an encouraging number of visitors and new entrants to the market. Manufacturers continued to push the design envelopes in both the multihull and monohull sectors, not only using carbon fibre technologies, but also foam and sail material advances.
Investors into the superyacht supply chain were particularly present, so too were aviation brokers and fractional jet program resellers who demonstrated the synergies between these two luxury assets.
The Equiom team engaged in several topical conversations over the course of the show. At the forefront of many people’s minds was Equiom’s virtual customs warehouse facility (available in the UK and Isle of Man) and our experience with customs warehouses across Europe for both yachts and jets. This received significant interest from clients and brokers due to the Duty and VAT optimisation opportunities.
Post Brexit discussions around the VAT status of yachts were also frequent. Many vessels are advertised as ‘VAT paid’, but don’t necessarily have a robust boilerplate case for that assertion and this is often where we offer support to yacht owners.
It is clear from discussions with brokers that the bullish stock market of the last year combined with a desire for people to get out on the water post Covid have triggered strong demand for yachts and consequently a lack of quality second hand stock on the market. The superyacht builders have in fact reported that build slots are tied up for the next two to three years.
The promised Free Trade zones in the UK, particularly Southampton Solent, the Thames and Plymouth generated excitement for UK constructors. Details are still emerging on the benefits, but alongside the usual customs and tariffs exemptions the tangible benefits from locating into these zones for the UK superyacht industry are slowly being published. So far it looks like there will be a range of tax incentives such as enhanced capital allowance, relief from stamp duty and relief from employer national insurance for additional employees together with investment of £175 million in the form of a regeneration and infrastructure fund.
The need to remain vigilant of changes to local laws was apparent. Captains and brokers noted that the French Administration recently brought into place restrictions on hull lighting and noise. One yacht has already been reprimanded publicly in the press for non-compliance. We expect to see more such legislation as pressure grows on this crowded destination. This is in addition to the fast implemented anchorage rules on protection of Posidonia grass.
Crew agents discussed the challenges of sourcing quality crew due to Brexit and Covid. For example, many highly skilled Australian, South African and American crew have been blocked due to quarantine restrictions.
In conclusion, as an ‘on the water’ show, Cannes is ideal for showing off the industries’ best products and services. Shows of this nature are essential for gaining new customers into the superyacht industry by providing those ‘first time on the water’ experiences from which there is no turning back. The interest we saw from outside investors wishing to invest in the superyacht industry supply chain was really encouraging and a sign that this industry is mostly definitely booming.
Equiom Group is the only corporate services provider with a dedicated VAT team for yachting and aviation assets and is well placed to help owners and investors navigate the complex yachting operational environment.
Ian and Damien will be at the forthcoming Monaco Yacht Show joined by Antonio Mazzotta, a Director from the Monaco Office and Scott Le Cornu, Head of Crewing, who will be available to discuss employment solutions for crew members. Get in touch with Ian or Scott to arrange a meeting at the show.