Video - Expert Views: The super-yacht market

A super yacht or mega yacht is a large and luxurious pleasure vessel. There is no official or agreed-upon definitions for such yachts, but these terms are regularly used to describe professionally crewed motor or sailing yachts ranging from 40 to more than 180 metres in length. The super-yacht market is not well known and is generally the preserve of a limited number of ultra-rich individuals seeking to spend unforgettable relaxing moments with their family or friends in an exclusive setting combining intimacy, comfort and the possibility of travelling without constraints.

There are two ways of using super yachts, and each has its own legal and fiscal consequences for the yacht’s owner:

• Private use, where the owner personally enjoys and benefits from their yacht.

• “Business” use, where the owner charters out the yacht, notably to mitigate running costs.

The cost of a luxury yacht depends on its equipment and configuration, its amenities and its engine, for example. The reputation and expertise of the shipyard also has an impact on the price. A luxury yacht budget can be in the tens of millions of euros, and its running costs (maintenance, crew, insurance, fuel, port fees) total around 5 to 10 % of the purchase price every year. The assistance of technical, legal and financial experts is therefore essential for a project such as this at every step of the acquisition or construction process. It is both an investment project and a passion for our clients, but it needs to be a sound purchasing decision.

Today, the maritime industry – and notably shipping (i.e. commercial maritime transport activity) – are controversial sectors because of the high social and environmental stakes throughout the yacht’s life cycle:

• During the construction phase, with the shipyard’s environmental impacts taking into account the supply chain of the materials used (wood, plastic, etc.)

• During the yacht’s use, of course, with the risk of marine pollution and the emissions of greenhouse gases from yachts with a combustion engine.

• And, lastly, during its destruction phase at the end of its life.

Aware of the reputational risk of these social and environmental aspects, the luxury yachting sector has anticipated clients’ demands and given itself the means to limit its negative impacts, helped by an increasingly stringent regulatory framework. We could, for example, mention the energy efficiency design index, better known as EEDI, granted during the design and delivery phase, which required ships commissioned after 1 January 2013 to meet certain requirements in terms of using less polluting materials and consuming less fuel. Another example is the ship energy efficiency management plan, or SEEMP, which provides guidelines to help improve ships’ efficiency during their lives, notably with regard to reducing their environmental impact and running costs. As well as complying with applicable regulations, many projects currently underway or already delivered prefer increasingly innovative and ecologically responsible designs or engines with less polluting means of propulsion, enabling some yachts to use 30% less fuel than a yacht with a conventional engine of a similar size. Thanks to technical developments, yacht’s roofs almost all now have solar panels that meet a substantial portion of the boat’s energy needs. Lastly, the increasingly popular fully electric or hybrid boat market is likely to see rapid growth due to future restrictive measures, notably with regard to greenhouse gas emissions.