21-05-2025
A Covid boom propelled the luxury yacht industry, but higher taxes hit demand for more affordable boats
Despite economic headwinds in Britain, the luxury yacht market remains buoyant, with wealthy buyers undeterred by higher taxes and tariffs. While larger yacht makers like Princess and Sanlorenzo report strong sales, demand for smaller, more affordable boats has softened.
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( Originally published on May 21, 2025 )
Britons are feeling the pinch from higher taxes, weak economic growth and now US tariffs adding to the uncertainty. But one industry's customers appear to be sailing through relatively unscathed: luxury yacht buyers."Large yachts are still selling strongly," Joe Hill, sales director of motor yachts at British maker Princess, said at last week's British Motor Yacht Show at Swanwick Marina on England's south coast. Pointing to a model costing 4.3 million ($5.7 million) before value-added tax, he said: "If you have that as disposable income you're probably riding over the peaks and troughs of the economy anyway."Wealthy buyers are still splashing the cash on high-end yachts decked out with their own trim and other personalised features, contributing to an industry worth an estimated 1.4 billion. But less wealthy consumers aren't immune to the slowdown. They've been reining in spending, with a drop in demand for smaller and slightly more affordable yachts "There are still plenty of people spending money at the top end, but at the lower end it's quieter," said Dave Cockwell, founder of Cockwells, a Cornwall-based boutique builder that makes classic-style boats with upgraded technology. There were "more inquiries than ever" for bigger boats, but smaller ones struggled to attract buyers, he sales boomed during the Covid-19 pandemic as wealthy people sought ways to spend their money, with overseas travel limited and restrictions tight. Since then, sales have larger yachtmakers continue to enjoy strong demand. Sanlorenzo SpA, an Italian manufacturer listed in Milan, reported an 11% increase in net revenue for new yachts to ₹930 million last year, powered by its superyacht yacht show in Swanwick - which featured 45 boatmakers - pulled out all the stops to reel in the roughly 1,500 potential buyers. A lobster stall served hungry customers, while those ready to make an offer could step into luxurious lounges put on by the major yacht companies with free food and show also talked up how buying a yacht is free of stamp duty. That's become a bigger selling point after the Labour government last year raised the surcharge on second-home purchases to 5% from 3%.Sanlorenzo, which makes boats starting at 6.5 million, lured wealthy buyers with its two luxury vessels on display. The SX76 sleeps eight guests and two crew with a large saloon, dining room and full-size kitchen as well as extensive outdoor space, while its SL96A was custom-built for a client with a dark wood interior and several modern art boatmakers had less luck securing deals for their smaller vessels. People at that end of the market, who are potentially testing their financial limits, might buy a boat on finance, said Princess's Hill, and high interest rates might make them hold off purchasing for and cheaper boats - like Princess' V40 which starts at 700,000 - have seen weaker sales over the last few years, Hill said. The Plymouth-based company, which employs around 2,400 people, makes boats ranging from 40 feet to 95 feet a similar story for Rib-X, which makes speedy craft that can be used for sports, and tenders, which are smaller boats used as lifeboats or support vessels for large yachts. Sales of its smaller vessels have slumped around 40% in the past year, estimates Ross Collingwood, chief executive officer of Rib-X owner Vortec Group.
