Luxury Yachts Revive the Leisure Boat Market in Difficult Times

The global boat market is proving resilient in the face of economic uncertainty. Last year, global turnover of leisure boats rose by 4.6% to 24.7 billion euros. Interconnection Consulting also expects an increase of 5.1% in 2023.

After the market had already increased by 20% in volume in 2021, the production capacity of boat builders, which was also limited due to supply bottlenecks, was no longer able to fully satisfy demand, which led to a price increase in the market for leisure boats and resulted in a decline in sales volume. Sales volumes fell by 3.4% in 2022 and will fall by a further 1.6% in 2023. Nevertheless, price increases will lead to stable turnover increases. Sales should only start to rise again from 2024 onwards, at 2.5%, the authors of the study expect.

Australia is Growth Champion

A reflection of this development is the USA, the largest market for leisure boats, with a market volume of 10 billion euros, which corresponds to a global share of just under 40%. There, sales volume fell by 5%, while turnover increased by 3.4%. The strong-selling areas of Western Europe also show a similar trend, with sales volume declines ranging from 1.9% in Spain to 5.8% in the Benelux countries, with simultaneous turnover growth. While these markets are already showing some saturation, the growth areas are elsewhere. In the Arab region, sales rose by 2.3% last year and turnover to around €550 million (+6.3%). There, it is mainly the demand for luxury motorboats that is driving the market. The share of luxury motorboats is around 50%. However, the growth emperor was Australia with a 7.1% increase in turnover. “Growth was supported by very good infrastructure and geography, which meant that they were not hit as hard by supply chain issues as the rest of the world,” explains Adam Pasinski, the author of the study. This factor also led to the absence of the big price jumps in Australia that we experienced in Europe or the US. With a volume of around one billion euros, the Australian market is similar in size to the boat market in Southeast Asia. The market in Southeast Asia is expected to grow in value by an average of 7.7% annually until 2026.

Big Boats in Strong Demand

A total of around 200,000 leisure boats were sold globally last year. Around three quarters of these were motorboats. 30,000 sailing boats and around 8,000 catamarans made up the rest. About two-thirds of the market volume concerns private boat purchases. Motorboats are and remain the dominant boat type. Large and luxurious boats in particular will continue to gain share. Growth rates increase with boat size. The largest leisure boats show growth rates of 6% annually until 2026, while smaller boats will only grow between 4% and 5%. The boom in the superyacht industry is also leading to coastal infrastructure being geared up to meet the needs of this clientele in order to stay ahead in the tourism race, which in turn increases the incentives to buy superyachts. “The trend towards the sharing economy is also causing the higher demand for larger boats,” Pasinski explains. People would rather share the cost of a larger boat than own a small boat alone. Some of the major boat suppliers in the global world market are, in alphabetical order: Azimut, Bavaria, Beneteau Group, Benetti, Ferretti Group, Hanse Yachts, Honda, Suzuki, Yamaha.

Demand for Large Boats on the Rise

The European market for leisure boats grew by 5.7% in value last year. Similar turnover increases of around 5% are also expected for 2023. Nevertheless, the positive turnover figures should not hide the fact that sales were down in all major European markets, although this also has to do with the increasing demand for larger boats, as a study by Interconnection Consulting shows.  

The European boat market shows different developments in the north and south of the continent. While the market in Scandinavia, Great Britain and the Benelux countries shows major problems, the southern European market is characterised by a large charter business share, which promises more security in times of crisis than the private customer business. “It is much cheaper to rent a boat than to buy one,” says Adam Pasinski, the author of the study, explaining the advantage of the charter business in times of high price inflation. Italy, apart from being one of the most important charter destinations, benefits from a large market share in luxury yachts, which are less price-sensitive. While the markets in Scandinavia and Benelux showed sales declines of 4.4% and 5.8%, the declines in Italy and Spain were therefore comparatively moderate at 2.3% and 1.3% respectively. If the sales declines in Southern Europe are also more moderate in 2022 and 2023, the growth that is expected to set in across Europe from 2024 onwards will also be more subdued than in the northern markets. Countries such as France and Germany, which are located “in the middle” between North and South, will benefit above all from the demand for larger boats. France, for example, shows the biggest rise in turnover of 7.1%, although sales fell by 3.8%. The largest market, with a market volume of around € 740 million, is Germany, ahead of Italy with around € 610 million.

Large Boats are in Demand

Motor boats account for 73.6% of the total market. Compared to the world market, the sailboat segment also has a large market share in Europe with 20.1%. Catamarans still play a minor role, but have the greatest growth potential. Due to their better buoyancy in rough waters, as well as the permanently improved infrastructure at the docking stations for the space-filling boats, a further increase in demand is expected. The growth rate for the next few years averages 7.5% annually in this segment. In terms of boat sizes, it is apparent that large boats in particular are increasingly in demand. The growth rate of boats in the largest segment (51 to 80 Ft) is 6.8% annually in value, while the smallest segment (10 to 25 Ft) only has an average increase of 4.5%. Some of the largest boat suppliers in Europe are, in alphabetical order: Azimut, Bavaria, Beneteau Group, Benetti, Brunswick, Feadship, Ferretti Group, Hanse Yachts, Lürssen, Oceanco, Sanlorenzo.

The boat market in Europe saw a decline in sales of -0.1% last year. Turnover in the industry increased by 1.6% and now stands at 3.8 billion Eur. Even until 2021, the stagnation of the market does not seem to change much, as a new study by Interconnection Consulting shows.

Spain hooey, Great Britain phooey

The outlook for the boat market is rated less optimistic in many places than it was last year. This is mainly due to the trading tensions, which make the companies more cautious. Even the Brexit, where the solution is still awaiting makes the markets insecure and affects spending, especially in Europe. A total of 31,543 boats were sold in Europe in 2018. The largest market is Germany with a share of 20.9%, ahead of France with 14.1%. The highest growth rates were achieved by the Spanish boat market with a sales increase of 3.0%. With this increase, the market is only just behind the UK, which saw the largest decline among European markets.

Catamarans are coming

The catamarans are the fastest growing product segment and will increase their market share from today’s 5.5% to 6.2% by 2021. Motorboats are by far the strongest product group with a share of 71.9%. The market share will hardly change in the next few years. The sailboats segment, on the other hand, will lose ground, which is due to the fact, that new generation is not that interested in sailing and boating in general says, Hudak as responsible analyst for area of boating.

Hard competition

Shifting demand for sailboats towards catamarans also impacts the production market. A reduction of sailboat producers is already evident today, while the number of catamaran manufacturers is increasing significantly. The competition among the producers is very tough, which increases the pressure on the price, which in turn benefits the customers, as Jan Hudak, author of the study, explains. Bavaria, one of the largest manufacturers in Germany, had to file for bankruptcy last year, but was taken over by an investment fund and was able to continue its business. Other big manufacturers are Frauscher, Grand Soleil, Sirena Marine, Beneteau.

The market for pleasure boats rose worldwide last year by 3.9% to 17.6 billion Eur. Despite the increase, the signs of market saturation are obvious and strong growth in the future is questionable. Thus, the average sales growth will fall below two percent until 2021, according to a new study conducted by Interconnection Consulting.

China stutters

The outlook for the global economy is rated less optimistic in many places than it was last year. This is mainly due to the trade tensions, which make the companies more cautious. Even the Brexit suffering, where the solution is still awaiting makes the markets insecure and affects spending, especially in Europe. With a global market share of 35.8%, the US is by far the largest boat market, followed by Europe with 21.8%. The largest growth market is traditionally the Asian market. So is the region of Southeast Asia with a growth of 9% (2016-17), the strongest growing region in the world. Markets that gain market share through higher growth are e.g. Northwest Africa, Southeast Africa, Australia, the Middle East and China, but in a global merit, they remain rather small. However, the golden times of the former growth engine China are also over. “The slower pace of growth will also affect the surrounding markets in Asia in the medium term,” says Jan Hudak, author of the study.

Catamarans stabilize the market

The fastest growing product segment is catamarans with a CAGR 17-21 of 4.2% in quantity. Sales of this product group increased by 6.2% in 2018. The growth of motorboats will not be quite as spectacular with a CAGR 17-21 of 2.2%. By contrast, sales of sailboats will stagnate over the next few years (CAGR 17-21 -0.1%).

Strong competition

In total there are more than 1,500 boat and catamaran producers worldwide. As a result of rising demand, the number of catamaran manufacturers is rising at the steepest rate, while the number of sailboat producers is falling for the same reasons. The competition among the producers is very tough, which increases the pressure on the price, which benefits customers, as Hudak concludes. Major producers include Beneteau, Azimut, Sirena Marine, Princess, Sunseeker, Brunswick Group, Grand Soleil and Frauscher.