COVID as a catalyst for change
Hannaford Turner's Adam Ramlugon explores how the new build market may change as a result of COVID-19…
In an unprecedented year, the outbreak of the COVID-19 pandemic accelerated a number of behaviours and trends. Over time there is bound to be some amount of “snap back” as the world gets to grips with pandemic, but some of them will be here to stay. Looking at both our own clients and the superyacht market as a whole, my view is the “COVID catalyst” effect has also been felt in the superyacht market.
Perhaps an even more powerful factor to consider is climate change. The UN Secretary General was quoted in late 2020 to say that “2021 must be the year of a great leap towards carbon neutrality”. The extension of the application of the IMO Tier III regulations from the beginning of this year is just a taste of the increasing regulatory burden the industry will be expected to shoulder in the medium to long term.
Coupling these factors together, the stage is set for both owners and shipyards to really push the boundaries both with respect to the technological aspects of future new builds and how, why and where they will be used.
Predicting the impact that these forces will have on the superyacht market is no easy task, but I would expect that we will see the following trends play out in the medium to long term:
First, the lockdown policies adopted across much of the world in 2020, represent the most significant restrictions on civil liberty that almost all of us will have ever experienced. One knock-on effect that I believe will come of this, will be owners choosing to spend longer periods of time on board their yachts which, at the larger end of the market, can be fully equipped with everything one might conceivably need to both live and run a business for at least months at a time.
At Hannaford Turner, we have certainly seen clients already contemplating using their yachts as a second or third “home” from which to base their operations and the events of 2020 should serve to exacerbate this trend.
For those of us stuck at home under lockdown measures (such as the author at the time of writing), it is not difficult to see how tempting it must be to rid oneself of the shackles of land-based restrictions and head into international waters with your family (and perhaps your family office) in tow.
Second, the delivery of the remarkable M/Y Savannah in 2015 with its hybrid electro-mechanical propulsion platform may have fired to starting gun on a trend that we will see take hold over the next few years. To its credit, the Red Ensign Group’s REG Yacht Code, launched in 2019, does expressly envisage that a REG classed vessel may incorporate a battery system as the “sole source of propulsive power”. The world’s superyacht fleet is full of owners who are willing to push the boundaries of innovation. Who will be first to take up the challenge of building the first fully-fledged battery-powered superyacht? It can only be a matter of time.
In closing, I have been impressed by how remarkably resilient the superyacht has been in the face of the unprecedented storms of 2020. This augurs well for the continued steady growth and evolution of the fleet over the next decade.
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