Talking to various industry players at national and international nautical events, it’s apparent that the yachting industry in Italy consistently records positive numbers, positioning itself at the top end of the upward curve since 2019. However, the confidence among these players wanes when discussing the trend of the overseas market, particularly in the United States, which appears to be signalling some negativity. The most common reason cited by many is a market slowdown coinciding with the anticipation of the upcoming presidential elections.

Reflecting on the previous election between Biden and Trump, there were similar comments regarding the impact on business. However, I don’t believe it affected business to such a significant extent. People often tend to attribute various economic and business conditions to pending elections. However, I believe we need to consider numerous other external factors. For instance, the US stock market has been performing exceptionally well, contradicting claims that the election is holding businesses back.

While some may like to attribute this to the upcoming election, I don’t think it’s the sole reason. There are countless influences at play here. For example, the geopolitical climate, which has been a constant for quite some time now, with ongoing tensions between Israel and Palestine, as well as between Russia and Ukraine. Additionally, there are political elections worldwide, from Mexico to the EU, alongside other global issues such as the lingering economic damage of Covid. Despite these challenges, the market remains resilient, and we tend to move forward with life and business. Thus, while the elections may contribute to the overall situation, I don’t think they have as significant an impact as some suggest.

To delve deeper into the cyclicality surrounding American elections, I reached out to Nick Bischoff, the Country Manager for the Americas at Benetti, who possesses extensive knowledge of the American superyacht market.

How is it possible that American dealer forecourts are filled with boats? At least, that’s what one hears in the corridors of the European market …
I would say that what has occurred is that many dealers, including the major players like OneWater Marine or MarineMax, have found themselves with a surplus of inventory due to the demand they experienced during Covid. This led to them possibly over-purchasing, driven by enthusiasm and momentum. However, when demand dropped significantly in early 2024, particularly around January, they were left with excess inventory. Specifically, in the middle-market segment – yachts under 100 feet [30 metres] – dealers already had yachts on order and were faced with the dilemma of whether to cancel existing orders. As a result, we’re now seeing this surplus inventory filling up dealer lots, as you mentioned. This has created pressure in the new yacht market, while the brokerage market is experiencing increased activity. Traditionally, new yacht sales are challenging when brokerage sales are hot and vice versa. Although both markets were previously thriving, especially under 100 feet, this market is more sensitive to the interest rate environment. However, regarding the market for yachts over 50 metres, affluent buyers are still active and engaged in discussions, albeit with a decreased sense of urgency.

Does this mean that the market for yachts of 50 metres and above is at the same level as it was a few years ago, at least for Benetti?
I believe we’ve returned to the levels we saw in 2019. Back in 2019, those levels were quite promising. So, we’ve had to adjust our expectations and acknowledge that we won’t see the same growth as we did in the past two years. This means we need to work harder, smarter and more competitively to attract the smaller pool of buyers in this market segment. Fortunately, I believe our leadership in this category positions us well to navigate these challenges. Certainly, we’re keen on seizing that opportunity, particularly considering our extensive network of brokers in the US market, which we rely on for our business. While there has been a noticeable slowdown from that angle, fortunately we have a substantial backlog to rely on. This means we’re not in a desperate position, pleading for business. We’re still able to compete effectively.

What is the market still demanding? Is connection with the sea and nature still driving the demand?
I would argue that this trend is still prevalent. It’s not just a passing fad; it’s a positive shift towards how yachting should have always been. In the past, we may not have known how to design yachts in this style and approach. Now, however, you see many of our competitors, as well as other builders not in direct competition, adopting the open concept, connecting the interior seamlessly with the exterior and emphasising the connection between the deck and the sea. This is a testament to Benetti’s influence. I believe this trend is here to stay, characterised by a minimalist interior approach and increased use of glazing for open, social spaces. The key now is to innovate within this framework to stand out in the market. Builders who continue to push the boundaries in this direction will likely capture a larger market share compared to those who don’t.

Nick Bischoff, the Country Manager for the Americas at Benetti

Recently, several shipyards I’ve spoken with here in Italy mentioned a trend towards downsizing yachts. Instead of opting for a 50-metre vessel, owners are increasingly preferring smaller yachts, around 35 metres, but with greater customisation options. Is this trend similar to what you’re observing in the American market?
I haven’t noticed that trend in the American market. Instead, what I observe is a typical lifecycle of yacht ownership. As Benetti owners age and their needs change, they often seek to downsize. However, it’s worth noting that the Oasis line has introduced many new opportunities. The average age has decreased. It’s not necessary for owners to be 65 as it was when I started; we’re now attracting younger buyers, which bodes well for future growth prospects. While they may initially purchase a 40-metre yacht, they often have plans to move up to 50 metres or even 60 metres. For instance, I’m currently in the process of delivering a 50-metre yacht, and my clients are already discussing a 60-metre vessel. Two of my clients who own 50-metre yachts are considering upgrading. These younger clients bring a new dynamic to the market. It varies depending on the specific market, but for Benetti, it’s a cycle of attracting younger buyers, moving them up and repeating the process.

What is the age of the youngest owner you have recently dealt with?
They’re typically in their late 40s, these Benetti owners, often with families and new to yachting. Previously, they may have chartered yachts for the past ten to fifteen years, but now they’re ready to make a purchase, knowing exactly what they want. Even after acquiring a 50-metre yacht, they’re already thinking about the future, asking themselves, "What’s next after this?" Moving from a 50-metre to a 60-metre yacht means doubling in volume and price, highlighting the substantial wealth still present in the United States. The introduction of the next generation of buyers is fuelled by the innovative designs and concepts that we continually offer.

I’ve observed Turkey’s rapid growth as a new hub for yacht building. Do you perceive any emerging competitors from Turkey or are they still lagging behind American owners’ preferences?
That’s an excellent question. We often encounter competition primarily based on price, and for clients solely focused on that aspect, we may not be the right fit. However, I must acknowledge that Turkey has made significant strides in terms of reputation and quality, deserving recognition in the industry. Despite this progress, they still face challenges in brand recognition. Clients investing substantial sums seek reputable builders with financial stability and assurances of timely delivery and quality. This concern for product quality remains paramount for American clients who prioritise protecting their investments.

From what I understand, Turkish yards are thriving by catering to Arabic clients due to their cultural and geographical proximity. Additionally, they are finding success with Russian clientele, as Russians are increasingly opting to have their yachts built there rather than in Europe, given the current unfriendly situation.
Yes, I can understand that. I believe the American market, particularly citizens of the USA, prioritise after-sales services. Although the prices offered in Turkey are enticing, there’s a lingering question about whether they have the necessary infrastructure in place. Specifically, along the East Coast from New York to Florida, there’s uncertainty about their ability to service the product and administer warranties. This concern is often on the minds of potential buyers.

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