By Ian Petts, Director – Client Services, Equiom Monaco
A team of 10 yachting and aviation specialists represented Equiom at one of the most exciting and vibrant global yacht shows in Monaco. Our presence was supported by our 20-strong trust and corporate team at Equiom’s Monaco office.
The Monaco Yacht Show is the annual trade show of the yacht industry. 30,000 visitors descended on Port Hercules in Monte Carlo to see the most spectacular yachts, water toys, luxury goods and supercars in the world.
The show boasted more than 600 exhibitors displaying over 125 superyachts with an estimated total value of $4.3 billion.
This year, both gross tonnage and length of yachts increased with a strong representation of new build and second-hand yachts. Most noticeably, more than 10 yachts surpassed the 70 metre mark.
The show operated against a backdrop of uncertainty around the future of the global economy, negative interest rates in old Europe and threats of trade tariffs, which some brokers said was holding back family office deal signing. Despite this hesitation from the buying side, the industry has seen some positive investor activity with significant deals including Squircle Capital’s purchase of the large refit yard MB92 in Barcelona. This investor activity, together with recent news of potential listings on the Milan stock exchange for San Lorenzo and Ferretti group on the Milan stock exchange, has led to a very vibrant optimistic show.
It was encouraging to see that American investor presence at the show was stronger than ever. However, the overall sentiment among American visitors was Europe’s complicated taxes, customs, duties and rules were still dissuading owners from bringing their yachts to Europe.
Service provider representation
The financial services industry was strongly represented at the show by both retail and private banks, portfolio managers, family offices, insurance providers and leasing companies. The theme around the insurance sector was that increased seaman disputes and some high profile superyacht claims during the last year have led to a rise in top end premiums.
It came as a comfort that many family offices already have strategies to mitigate risk, or indeed profit from both scenarios of Brexit. Some international family offices are seeing the weaker pound as an opportunity to buy a UK superyacht so any reservations about Brexit were quickly put aside by a bullish outlook.
The increased representation of private jets and helicopters at this year’s show reflects the growing need for yacht crew who are capable in aviation matters including fuelling and maintenance. Aviation management services are becoming more widespread within the standard yacht management company offering, a trend that we certainly noticed at this year’s show.
Another important part of the sector not to be forgotten was the 1,272 crew members (according to Edmiston) who were in attendance at the show. The high number of crew pushed discussions on how crew man safety is ensured, but also how correct contracts, training and pay are executed. The industry is realising the importance of using experienced jurisdictions for pay administration, correct tax treatment and attractive pensions. The shortage of qualified engineers to service, maintain and ensure efficient operation of these high value assets was also highlighted by recruitment professionals.
A changing market, new priorities
With younger billionaires entering the market there was much discussion on their inclination to push the technological boundaries to meet their speed, design and fashion needs. Environmental sustainability is also top of the agenda for younger yacht owners. This was the same tone set by HRH Prince Albert II of Monaco, who reminded us that we need to establish a more responsible relationship with our oceans.
As we leave yet another thrilling yachting season, there is still a great deal to debate, but the Monaco Yacht Show has yet again set an optimistic tone for the future of the industry.