Berthon Forecast 2024

By Sue Grant

The promise of a plethora of political elections, gales, extremes of temperature and a war on the borders of Europe are joined by a dreadful conflict in Gaza. What a start to a new year… 2024 begins with uncertainty politically and economically, and plenty of challenges for all the peoples on our Planet. Another forecast, same garden shed, overcoat and scarf, for in the UK, dreadful weather is a given during an English winter.

2023 was an interesting year for the Sales Group as we saw the market change and become much more normal. No more the race for scarce product and enhanced prices paid for yachts both new and pre-owned. There are now many more yachts available on the brokerage market and whilst manufacturers had a frenetic summer fulfilling all those ‘made in Covid’ orders, the pipeline has slowed for new yachts and as is normal, the pendulum of what is hot and what is not, has now swung.

In our 2023 forecast, we felt that the client base would continue to invest in and get out on the water, despite gales, fog, high interest rates and even higher taxes. This has most certainly been the case. The motor yacht market in particular has performed strongly throughout the year, and we go into 2024 with some great listings and deals already in the bag. This market is dynamic although it is patchy and good condition is key. Today’s buyer is not forgiving of poor service records, broken kit and deferred maintenance.

For sailing yachts, bluewater continues to be a good solid market, and in this segment the multihull has definitely come of age. Recent, well designed, and modern sailing yachts with sharp design and easily driven hulls are selling best.

We mentioned Ukraine in our 2023 forecast, but who could know that this conflict would be grumbling on unresolved with another war now in progress in the Middle East. Predictions about this situation are far above this scribe’s pay grade.

For the Berthon Sales Group it has been a year of consolidation, and a change in focus to ready our little Berthon ship for the challenges to come and to ensure that we enhance our service in 2024. No one loves change but we moved quickly as the market’s direction of travel became clear.

The bluewater cruising bug remains as contagious as ever and enthusiasm for yachting adventures grows, only confined by the availability of time, funds and the capacities of great organizations like World Cruising with whom we partner, and who bring us the ARC, World ARC and other wonderful rallies.

One of the things that we notice during the ebb and flow of the market, is that technology and innovation seems to be even more prevalent in a steadier and quieter market than in the frenzy of the Covid bounce. Of course, the bounce came at a time of immense pressure on the supply chain, materials and labour across the board. It is probably true to say that innovation becomes more apposite when the market softens. Added to that is the imperative to save the planet so burdened by the excesses of our fossil fuel way of life. 2023 saw huge progress on this front.

We predicted that some new yacht manufacturers and distributors would have a very difficult time in 2023 and this was certainly the case. Small production yachts in all categories see both manufacturers and dealers carrying substantial inventories. This is a part of the market that is vulnerable, and we do not think that this will change in 2024.

Re-reading our 2023 attempt at crystal ball gazing, we also said that the feeling from some buyers that a crash was coming would not come to pass and indeed we were correct. The delta between new yacht prices magnified by interest rates, labour and material costs has grown exponentially. This has meant that more recent brokerage yachts are holding their price, provided that they are within a segment where there is market activity. The Covid bounce that found a buyer for anything floating within reason, is over and for some parts of the market, prices have not fallen as there is little if any trading of yachts within the segment.

Yacht positioning by sea remains as reassuringly expensive as we predicted, but of course we totally failed as nautical seers, as we missed the current difficulties in the Red Sea and the problems for shipping been caused by the Houthi Rebels.

So not a complete failure on the crystal ball side of things. Not just our market, but for the whole of Planet Earth, things are moving and changing quickly and we fully expect that 2024 will be a very big year in terms of climate change and political turmoil. We also expect that when the next Berthon forecast is written that the status quo of life will again have changed in ways in which we can’t imagine today.

So, what about our 2024 crystal ball? We expect in the yacht market at least, that 2024 will be a stable year for yacht sales particularly in the brokerage market. Prices will not fall through the floor and there will be no feeding frenzy with values falling 50% from Covid highs. This is because of the disparity between new price and brokerage pricing, and also because increased costs of yacht ownership will mean that owners will not be excited about taking a bath when they sell. Although buyers cannot bid what they like and get a deal, they can wait for what they perceive to be value rather than a steal, and will likely end up as yacht owners. Because of this, owners do need to be cautious about overpricing in this market, or they will be left with their yacht and as she depreciates and demands more investment, the offer accepted later will be much less appetizing.

We also think that 2024 will be a key year for new yacht manufacturers. Small production producers who are building in high volume will start to turn the super tanker that is their production line, to give relief to their dealers and the aftermarket, so that high stock levels can be cleared. We also predict that new yachts will continue to sell and that in some segments the old fashioned concept of buying a yacht that is built for you will gain in popularity. This is a special process and engenders passion rather than making yacht purchase a soulless affair where the process is similar to buying any commodity.

The Covid bounce yachtsmen are still with us and are driving fractional ownership, boat clubs and all sorts of new ways to enjoy our sport, all of which is healthy. We predict that these sorts of initiatives will grow and that further, some traditional yachtsmen with spare time or other interests and will embrace this form of yachting. Watch out as the baby boomers join Generations Y, X and Z! These new ways of using yachts will develop more in the coming years, giving production manufacturers a home for their stock. However, we also believe that these schemes will trickle up the quality and size chain of yacht production, although this will be a gradual process.

Supply chain issues, not helped by the problems in the Middle East and elsewhere, are not going to go away and this is a serious problem that will affect yachting in 2024 significantly across the piece, with higher prices for materials of all hues.

We do tend to bang on about location and yacht sales. In 2024 it will be more important than ever. Amongst our client base, we observe that since the Covid Pandemic, we have gone from staying home, to working from home, to working in the office and at home. It was very noticeable by 2023 that our clients are now most definitely back in the office 100% and they are working hard. Time is more precious than money (although of course money speaks loud and clear) and so for this year, those yachts positioned in out of the way places will struggle to attract viewings or to find new owners. Since we all came out of our Covid haze, virtual viewing are off – clients want to view live, and if she’s a 12 hour trip with flight changes away, so that the visit can’t be accomplished in a weekend, she is likely off the purchase list completely.

Our final prediction is about ports and locations. There are the glamour ports that are iconic and which everyone has visited – Capri, St. Tropez, Sardinia, Venice and many others. There are popular areas from which to yacht, whose waiting lists are long and prices that are eye watering. As the numbers of yachts being built and commissioned rise every year, pressure on these ports rises also. Sadly, unlike cars or washing machines, we don’t scrap our yachts – they continue to live and require a hole in the water and to be attached to a dock. However, as prices rise in a falling market, yachtsmen are less willing to pay such reassuringly expensive prices, except for the brief periods when they are aboard. We therefore predict that cheaper ports with good transport links will become busier this year. As this happens, the services and watering holes will appear to service the increased number of yachts and the area becomes more popular. The traditional must go to ports are therefore wise to do more than just hike the prices once again lest they have more spaces in the water and fewer yachts tied to the dock.

So, what of the Berthon Sales Group for 2024? We have spent the last six months refitting our sturdy little ship and readying her for the sailing conditions that we expect in this New Year. We have a conservative passage plan in mind but are excited about the possibilities that the new direction we are taking in some parts of the Group. We are sailing with the same great crew, and with some significant changes to enable us to make the most of the yacht market’s direction of travel.

One important member of the crew is our CRM BOB (from Blackadder of course). He has now been replaced by Super BOB who lives in the cloud, is infinitively accessible wherever we are and who offers 21st century software to increase our ability to provide granular information quickly and easily to the client base.

The centralisation of our offering in the Mediterranean in Palma de Mallorca is an important part of our new strategy, with new larger offices overlooking Palma Bay and a growing service team. This is augmented by a service point in Valencia and a wonderful agent Filippo Martini in Italy who provides us with the key to this great market. This has enabled us to close our outlying office in the South of France.

We are also excited to be representing Solaris in both sail and power. The new Solaris Power 52 presented at boot Düsseldorf is an extraordinary clockwork yacht and we are delighted to be able to bring this taste of Italian flair and panache to the client base be it via sail or throttle.

Berthon USA has always been our market weathervane and remains so today. The USA continues to lead the march to change in yachting and the appetite for recent, high quality brokerage yachts will power this operation with its expanding team this year. We are also excited about the new yacht possibilities with clever and contemporary cruising designs from Moody, timeless good looks of Rustler and the epic cool of Solaris Sail all being well
received on East Coast waters.

Berthon Scandinavia specialises in some of the best maintained quality mid-range cruising and motor yachts on the planet and we expect that the growth of this office will be strong again this year as these little used and cherished
yachts that spend the long Swedish winters undercover, offering great value to international yachtsmen.

At the Mother Ship in the UK, we continue to support the rest of the team, driving the march towards moving imagery and excellent presentation of the yachts that we are trusted to sell, using social media, publications like this and a vast tool kit of marketing initiatives to provide the best coverage possible for the Berthon fleet.

We look forward to working with you to realise your yachting plans in 2024 – whatever the weather.

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