The luxury yachting sector continues to prove itself robust and expanding, with steady growth continuing even after the pandemic crisis. Thanks to operational improvements and effective production management, major shipyards have increased capacity and deliveries in the crucial years from 2021 to 2023, consolidating the sector's margins.

Growing demand and supply-driven market

The luxury yachting industry remains strongly driven by demand that exceeds supply, contributing to a constant increase in prices and supporting the sector's margins. This trend is fueled by several key factors: on the one hand, the demand for customization and tailor-made solutions is growing, confirming the consolidation of the premiumization of the market; on the other hand, there is a growing preference for large and motor yachts, positioned at the highest end of the sector. Added to these elements is a positive growth outlook: forecasts indicate a 6% annual increase in the period 2024-2030, thanks to the expansion of the ultra-high-net-worth individuals (UHNWI) customer base, whose number is expected to grow by 9% CAGR between 2022 and 2026, accelerating compared to the +4% CAGR recorded between 2017 and 2022.

“The luxury yachting industry is experiencing unprecedented growth, with demand continuing to outstrip supply. Industry players must invest in innovation and production capacity to meet the demands of an increasingly sophisticated and customization-oriented clientele,” comments Claudia D'Arpizio, Global Head of Fashion & Luxury at Bain & Company.

Italian leadership in the production of super yachts

Italy confirms its position as a global leader in the production of superyachts, with the three main Italian shipyards – Azimut-Benetti, Ferretti Group and Sanlorenzo – at the top in terms of number of projects and size of vessels. Alongside them, Taiwanese, Dutch and British players stand out, known for their manufacturing capacity, design and reliability. In particular:

• 50% of the total length of boats produced in 2023 globally comes from Italy, which remains the undisputed leader in the superyacht segment.
• Northern European players such as Feadship, Damen, Lürssen and Oceanco are establishing themselves as world leaders in the construction of large yachts (giga-yachts).
• New trends, such as green and solar-powered yachts, could redefine the market and favor both the consolidation of established players and the entry of new emerging companies.

An evolving sector with growing margins

The luxury yachting industry has shown a strong capacity to adapt, recording an acceleration of orders and deliveries in the two-year period 2022-2023. Thanks to the optimization of processes and the stabilization of production cycles, the main shipyards expect to maintain a large order book for the coming years. However, the growth of the sector will be mainly supported by the increase in prices, rather than by the expansion of production capacity, with particular attention to:

• Increased incidence of custom and premium yachts;
• Predilection for longer and motorized vessels, with increasing demand for segments above 60 meters;
• Growing interest in Chartering, both from the demand and supply side.

Risks include potential impacts from geopolitical factors, supply chain disruptions and international sanctions. Even in a recession, the luxury yachting market will be more resilient than other sectors, thanks to its UHNWI clientele that is less sensitive to economic fluctuations. However, players focused on mid- to low-end vessels could be more affected by any economic turbulence.

“To remain competitive in an increasingly selective market, shipyards will have to focus on differentiation strategies and strengthening the customer experience. The ability to offer customized and technologically advanced solutions will be a key element of success in the coming years,” adds Pierluigi Serlenga, Managing Partner Italy of Bain & Company.

Refitting and secondary market: growth opportunities

In addition to the production of new units, the refitting sector is experiencing significant growth, with major European players investing in new facilities. This sector benefits from the increase in the global yacht fleet (+2-3% CAGR), which fuels demand for refurbishments and technological upgrades.

At the same time, the second-hand market confirms itself as an important driver for the sector, encouraging fleet renewal and incentivizing the replacement of yachts with newer, higher-performance models.

Conclusion

“Luxury yachting continues to record sustained growth, driven by a solid order book, an expanding customer base and demand increasingly oriented towards customization and technological innovation. Italy, with its long tradition and leadership in the sector, confirms itself as the main global hub for the production of superyachts, destined to maintain its primacy in the coming years,” concludes Andrea Alori, Partner of Bain & Company.