Equiom in Full Force at The 2022 Monaco Yacht Show

The Monaco Yacht Show is the landmark event in the yachting industry calendar. Back this year for its 31st edition, Equiom’s trusted experts from around the globe were able to attend, liaising with clients and brokers to discuss their yachts, jets, family trusts, businesses, and property structuring needs, amongst a variety of other services.

For the past four decades, Equiom has supported high net worth individuals and a wide range of international corporations to nurture and fulfil their ambitions; offering a world-class, bespoke approach.

In a recent report, Equiom highlighted some of the key takeaways and trends from this year's show, offering an insight into the future of the industry, and how its trajectory is currently being shaped.

Yachting macro-economic environment

Macro-economic factors were big subjects of discussion at the show. Rising interest rates have led to an urgency to get financing deals over the line. The strong dollar provided far more opportunities for U.S. owners, with many instructing their brokers from Fort Lauderdale to attend Monaco and bring vessels back to the states.

"During the show, the Equiom team took part in several broker sessions advising on the customs procedures needed to ship a vessel from the U.S. to Europe, and how to preserve VAT paid status and value for owners on their assets", says Ian Petts, Head of Yachting & Aviation at Equiom.

"Inflation in the supply chain is clearly feeding through into price increases for both new and second-hand yachts, and was also leading some owners to seek to build their yacht outside Europe for cheaper build prices."

Compliance

Enhanced KYC procedures can lead to a certain frustration for some brokers trying to get a deal over the line, but this should be viewed as an opportunity to get to know clients better.

Robust compliance procedures on charter vessels to monitor crew are now a must and several big brokerages used the show to recruit and bolster their compliance teams.

"The team discussed outsourced compliance services with smaller brokerage houses, who could not afford a full-time brokerage compliance officer", Petts explains.

"The whole supply chain acknowledges the need for transparency and documentation of the source of owner’s funds. The once very discrete, guarded, and confidential nature of the industry is being opened up as all supply chains for the operation of the yacht are now compelled to document the owner’s details and source of funds."

Owners had expressed that they welcomed the shift as it made for a faster and more efficient process in purchase, operation and sale of their vessels.

Sustainable yachting

Higher fuel and energy prices are leading to charter vessels spending more time at anchor than cruising. However, owners are booking longer charters too meaning that they are enjoying the locations for longer and spending more quality times on the vessels. The growth rates especially in the charter business are astonishing, with some countries experiencing 20% growth in charter rates.

There appears to be a shared view that now is the time for the industry to get back to the history of yachting and present to the public the skilled artisans in the supply chain. The industry yearns to build yachts not just for the owner’s entertainment, but for the artistic and skilled process of doing so.

The lifecycle, cost and recycling of glass fibre, carbon fibre and batteries, needs considering by the industry, as well as implementing alternative fuels and hydrogen fuelling.

Tax

The Equiom team were on hand to navigate tax complexities for brokers. Preserving VAT paid status was a popular topic, as was enhanced tax assurance, VAT processing, temporary importation, customs warehousing and the applications of various returned goods reliefs.

"Getting a holistic tax strategy in advance of any purchase decision and getting written advice on the operation of a superyacht is key to a smooth operation", comments Petts.

Generation shifts 

Since the immergence of the COVID:19 pandemic, there has been an extraordinary shift in wealth, with an influx of new owners from younger generations entering the 50m plus market.

Strong charter market

The rate of new entrants to charter is astonishing, with clients already pre-booking the 2023 season to both fix in a price and secure the top vessels.

An encouraging trend is the number of charters booked in the shoulder season. Traditionally in the Mediterranean, July and August are the strongest months, but a number of charter brokers were juggling bookings that are still being run in September.

Moving East

Although many are under the impression that the market is dominated by Italy, France and Monaco, there is a significant loss of market share to the east. Greece and Croatia are indeed capturing market share and growing at faster rates than the West Mediterranean.

“An uptick in enquiries for yacht support services in the Middle East were received during the show, and with Equiom’s presence in Dubai, Qatar, Riyadh and Abu Dhabi, the team are well placed to advise on such matters.” says Petts.

Business aviation presence

It is now clear more than ever that the Monaco Yacht Show is a must-attend event for the business aviation industry, with most top jet brokerage firms either having a stand or attending in some capacity. Yacht owners and jet owners are often symbiotic. The synergies between the two industries present a lifestyle that is now very evident.

Looking ahead, members from Equiom’s yachting team will be attending The Superyacht Forum in Amsterdam later this month.

https://www.equiomgroup.com/private-clients/yachting-aviation