Recently released figures have shown that the global yacht charter market is growing with the valuation of $35 billion in 2014 expected to reach $51 billion by 2020. Eastern Europe is expected to see the biggest growth of 7.2% per year with other regions averaging a growth of 6.5%. The boom is due to the rising disposable income of consumers globally and the increasing number of yacht charter destinations. Product innovation and advances in technology have also improved the industry and have also been duly credited with some of the success.
The global financial recovery and the fortunes of the yacht charter market
The optimistic figures come from a report by Future Market Insights entitled “Yacht Charter Market: Global Industry Analysis and Opportunity Assessment 2015 – 2020.” It provides insights into the prospects of the global yacht charter market using data from the wider economy and shows that this market is particularly benefiting greatly from the economic recovery. The increase in the number of high net worth individuals with a more disposable income and an increase in their interest in leisure activities comes as great news to the industry. While some individuals prefer to buy their own yachts outright, many can’t quite afford that kind of luxury. Taking into account mooring costs, accident cover for the yacht, maintenance, and many other associated expenses, buying a yacht is not the best choice for everyone. Chartering appeals to a different type of consumer and the report also found that promotional activities from yacht charter companies have increased awareness in the target audience. Celebrity endorsements have been a particularly successful strategy attracting a lot of media attention.
Increasing the appeal of the industry
Yacht companies have been using digital marketing as another effective way of reaching their target market. Social media campaigns have proved particularly fruitful. Virtual tours, videos of particular yachts out at sea, and examples of the unique services on offer have been circulating online and gathering a lot of interest. FMI’s report also noted that online reviews and customer testimonials have been a key factor in the digital marketing campaigns that have built trust and gathered interest among others in the target audience.
Where in the world has benefited the most?
As mentioned earlier, Eastern Europe (including Turkey and Russia) will be the biggest winners of the boom in trade. The rest of Europe (the North, South and West) and North America are also going to perform above the global average. Collectively, these three regions were found by the Future Market Insights report to collectively count for 75% of the market share in 2014 and this is expected to continue. Greece is also a big winner of the report with the charter yacht market there helping to prop up the fortunes of the rest of Europe. Greece is home to some of the most iconic charter destinations with the coastline and islands – including the Aegean Islands, Cyclades, Dodecanuse, and Corfu – being some of the most popular spots in the world. It is not known, however, how Greece’s current financial difficulties will affect the charter market.
The overall success of the charter yacht market
Even when broken down into smaller categories, the charter yacht market across the globe is shown by the FMI report to be booming:
• Success by yacht type
The FMI segmented the market into motor yachts and sailing yachts. In 2014, sailing yachts proved most popular with almost 79% of the market share. Sailing yachts are projected to grow 6.5% through to 2020 with motor yacht faring ever so slightly better at 6.7%.
• Success by customer type
Corporate and retail were by far the most prevalent consumer types. Retail consumers accounted for 69% of the market share and were projected to rise by 6.4% over the next five years.
• Success by size of yacht
On the basis of size demand for medium sized yachts (30m to 50m) was the highest accounting for over half of the market share in 2015. However, the small yacht market (up to 30m) is expected to rise the most up to 2020 with a projected growth rate of 8.5% per year.
After a difficult decade of reduced disposable income among the target audience due to the global recession, the charter yacht market is back on track to be a big success. With growth in this sector projected at such an extraordinary rate, all involved in the business should be preparing themselves accordingly. Consumers too should look to charter a yacht within this period if they are to benefit from a fantastic life experience at the peak of its operations.
Article submitted by Gemma Cairns