13 Mar 2014
As a sector, we're living a life of luxury
Wealth-X has published the results of its inaugural Luxury Sentiment Survey Report, which serves as a gauge of luxury sector business confidence. And the mood across the sector as a whole is largely positive with 77 per cent reporting a rise in the number of customer enquiries whilst 78 per cent of those polled expect to see an increase in Q1 revenues and 64 per cent expect their customers to make more purchases. Clearly the 2014 outlook for UHNW activity is rosy.
An overwhelming 71 per cent of respondents said they were likely to expand into new geographical markets this year to further assure their long-term futures. And while this is an activity that superyacht builders and brokers have pursued, the survey’s figures, which state that 50 per cent and 29 per cent of 2013 revenues came from North America and Asia respectively, are indicative of the superyacht industry’s unilateral position within the broader luxury sector. Because, whilst the US resale and new build markets have plateaued somewhat, and the Asian market is still in its infancy, European activity has spearheaded the industry’s nascent recovery. Of the 407 superyachts in the 2013 Global Order Book, 311 were in Europe, with only 45 in the Americas.
And furthermore, while 76 per cent of luxury sector customers are domestic, superyacht purchases are influenced by the quality of the product in a certain location, and as has been seen in America and the Middle East, the very wealthiest UHNWIs are prepared to travel to get the best product. In the Superyacht Intelligence 2014 Global Order Book non-Europeans comprised 45 per cent of owners.
Wealth-X identifies superyachts as ‘big luxury items’, a sub-category of the survey where 87 per cent of respondents were expecting revenue growth this year, with a third expecting growth of over 10 per cent QoQ. Fifty three per cent identify North America, the world’s largest pool of UHNWIs, as their most abundant source this year.
A Wealth-X preface to the survey read:
The results of this business-to-business survey show that despite the variety of conditions across different sectors of the luxury industry, the responses of the world’s leading luxury brands are broadly similar: more engagement and more targeting of UHNW individuals are expected to go hand in hand with better performance.
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