Every time I see on social media the top 100 lists and the ten biggest launches of the year, I breathe a huge sigh of frustration and wonder if the market really understands the dynamics and the matrix of superyachts.

There are two categories that need some focus and attention, for obvious reasons. Not only do these sectors represent the vast majority of superyachts when you take the official regulatory definition – 24 metres LOA and above – but also there are thousands of owners of pocket yachts with the potential to migrate to larger vessels.

Let’s put it in perspective. As a fleet number, there are just under 4,000 yachts in the 24 to 30-metre category globally and there are an additional 4,000-plus yachts in the 30 to 40-metre category. Yes, they are primarily semi-custom or production yachts, built predominantly in glass reinforced plastic, or aluminium and steel occasionally, but they repre-sent, in hull units, more than 80 per cent of the market, and in terms of deliveries and existing fleet, they are also the most active sales pipeline for buyers entering the superyacht category.

These sectors are dominated by the big brands – Azimut-Benetti, Ferretti, Sanlorenzo, Sunseeker, Princess and myriad other brands – and the brand graphic (further below) gives you a picture of the spectrum of competitors. These companies have wide-reaching sales networks and global marketing budgets and are, in very simple terms, the builders that bring the majority of new clients into the industry with these entry-level projects, both new and second hand.

As can be seen from this graph, the annual delivery activity in these two size categories is so significant that its success or failure can have an impact on the wider market. If the big brands are suffering, there may be storm clouds brewing; if the big brands are booming, it’s a good sign that superyacht buyers are currently in a positive mood.

Annual historical 24-metre-plus fleet (2000-2024) and forecasted growth (2025), segmented by LOA(m) bands

Obviously, as we’ve highlighted in previous reports, one significant project from Feadship, Oceanco or Lürssen is, in volumetric and financial terms, a significant proportion of the market performance, where a 100-metre project can be measured in multiples of one 30-metre production superyacht perhaps by as many as 20 times. But when you look at the market performance and future growth, a consistent production of these pocket superyachts is critical to all economic elements of the market.

However, there are one or two caveats and cautions that are worth highlighting, specifically related to the entry-level fleet (24 to 40 metres): firstly, quality of design and build, and secondly, the safety and quality of operations and manning.

Quality of design and build
Following a few interesting conversations with captains, surveyors, managers, brokers and even Class societies, it’s apparent that concern is developing about the topic of design and working space on the sub-500gt fleet, where sacrifices are made to give the owner maximum living space and comfort but to the detriment of the space required by those who may live and work on board for several months at a time – the crew.

It’s easy to see how designers and sales teams will push for the best sales presentation, with beautiful renders and videos of amazing interiors, far more spacious than on the previous model, but it’s even easier to see how the long-term problems will emerge.

A recent conversation with Antoine Larricq, of Fraser Yachts, in my opinion one of the most intelligent brokers out there, showed serious concern about the lack of space and consideration in the sub-500gt models for crew and service. These yachts won’t work for the owner and their guests when the crew have such poor space or limited storage on board; it will damage the guest experience and not deliver what they expect.

Perhaps the time has come for the 24 to 40-metre fleet to spend some time reconsidering the operational profile and build of these entry-level superyachts with the crew in mind, so they can operate them efficiently and safely.

In addition, when talking to a well-known Class surveyor and project manager, there’s a clear concern about build quality and engineering, where the piping systems, ventilation and electrical systems are potentially below the requirements, and where technical people are building yachts that meet the minimum safety standards and not looking to go beyond. In fact, there was a very bold statement from this conversation that some builders are looking to build a yacht that will last only a couple of years, just beyond the warranty period, and then need significant upgrades.

This needs further investigation but I feel that the market should think carefully about the concept of doing everything for the owner and then cutting costs technically, only to find that the yacht’s resale value, operational profile and crew turnover create a significant headache for the buyer.

Pocket superyacht builders worldwide

Safety and operations
In addition to the design and build quality, there’s a clear issue of on-board safety, not only in terms of crew and their living and working conditions, but also technical safety. Yes, if the crew are unable to do their job properly or have cramped sleeping quarters, the quality of service and support for the owner is affected, but mental health, fatigue and high-turnover all have an impact on safety. As we have all witnessed over the past few years, there has been a proliferation of incidents within the smaller superyacht fleet, with groundings, collisions, sinkings and, more importantly, fires of all sizes.

One well-known surveyor shared some candid opinions on the topic because it’s clear that the majority of the fires that make their way to the social-media channels, or happen in high-profile marinas or shipyards, are in the 24 to 40-metre sector, often with captains and crew who have yacht master tickets and in many cases with no permanent engineer on board, or on yachts left at night with no crew on watch. This is something that the regulators, marina management and Flag states should review and explore.

There’s been an incredible surge in the use of lithium batteries across this fleet too, with silent-mode operations, charging systems and next-generation electric water toys all sitting on the specification. Yes, there are marine guidance notes (MGNs) for the use of these batteries but, as my surveyor friend highlighted, these aren’t comprehensive or strictly followed by the manufacturers or operators.

The issue is not with quality suppliers or reputable companies but perhaps more with the cheaper copy-cat models where the source of the battery is often unknown. As he recommended, there needs to be a study of all recent cases involving lithium fires on board the smaller superyacht fleet, perhaps financed by the insurance market or Flag and Class, because there’s an urgent need for the market, the manufacturers, the owners and the shipyards to better understand how and why these incidents are hap-pening relatively frequently.

Every time some social-media influencer gets excited by another yacht fire and posts lots of images of a yacht becoming gutted by insane flames and ending up as a blackened carcass, I wonder how many owners, guests and crew consider their own risk.

What is key is the process of being able to trade these yachts on the second-hand market
and help these clients move up the ownership ladder.

Moving up the market
What is key in this whole topic is the process of being able to trade these yachts on the second-hand market and help these clients move up the owner-ship ladder. One quick review of the brokerage market’s performance shows that a vast majority of the transactions and tonnage for sale are in the 24 to 40-metre size category, for obvious reasons. However, owners are migrating with their sales contact up the branded ladder because they’ve seen a cooler, newer, slightly bigger model from these major brands.

Perhaps the fact that the owners and their guests only use their pocket superyachts for short-range hops along the coast or from island to island keeps them isolated from the potential problems because they are on board for relatively short periods of time. But the bigger issue is the potential for a reasonable percentage of these owners in the sub-40-metre category to migrate up the market into 50 or 60 metres-plus and beyond, and this is something that needs further debate. Not only is the financial leap significant, from a production pocket superyacht to a custom project, new or secondhand, but the demands, decisions and dollars multiply exponentially.

I refer back to the fact that buying and building of the best quality often pays huge dividends for the owner, where the crew have been considered at the design phase, the engineering meets the highest safety standards and the maintenance costs are considerably less, not to mention a more palatable depreciation curve. However, in a super competitive market with a vast array of brands and models on offer, with a price point spectrum from Holland to Italy to Turkey to Asia and beyond all adding to the decision process, it’s wise at this stage to break the market in two parts in the way that SYBAss has advocated.

Smaller pocket superyachts (24 to 40 metres) making up 80 per cent of the fleet (8,000+ yachts) is one market and the remaining 20 per cent of the fleet above 40 metres (2,200+ yachts) is the exclusive, more complex and, perhaps, real superyacht market.

So when you read about the data and size and scale of superyachts, it’s vital that we stop putting them all in the same boat.

This article first appeared in The Superyacht Report – New Build Focus. With our open-source policy, it is available to all by following this link, so read and download the latest issue and any of our previous issues in our library.

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