How Have Previous Government Policies Affected Yacht Sales?
Market Insight: In an unusually volatile U.S. Presidential election cycle, Heesen examines how past administrations have affected yacht sales.
Heesen’s American sales director Thom Conboy sits down to discuss a sensitive yet important issue. It’s no secret that the impending U.S. presidential election between Donald Trump and Kamala Harris has tensions running high in America. Frankly, it’s a mess. Fifty-percent of the voting public in the world’s largest economic engine thinks that their candidate is the one for the job, and that their opponent is a threat to democracy itself. And the other 50-percent of voters feel the exact same way, just in the other direction. As we careen toward the November elections, the superyacht market has understandably cooled. Who after all, is willing to make an eight, or even nine-figure purchase with so much uncertainty in the air?
“The money is always there,” says Thom Conboy, Heesen’s American sales director, “but in election years, and particularly this one, the confidence is not.” Conboy believes that the completion of the election will breathe life back into the superyacht market. “I think what’s important for the industry is a return to a sense of normalcy, whichever way it goes. Once people feel like they have a solid footing, they become more likely to buy boats.” Conboy also points to other factors beyond the election that have sewn trepidation in the markets, including wars in Gaza and Ukraine. The latter of those has also brought with it sanctions that have hit the very top end of the superyacht market hard.
It’s not all bad news though. Conboy notes that the coming transfer of wealth from Boomers to the younger generation will be the largest one in history. The influx of capital into new hands should spell a boon for luxury markets and yachting in particular, where owners have gotten increasingly younger.
And it’s also worth noting that a slowdown in yacht sales due to an election year is nothing surprising. Nor does a victory for either party spell doom and gloom for the sector. As the New York Times pointed out earlier this year, the stock market doesn’t seem to care who wins.
The market’s reported indifference to a political leader dovetails nicely with recent history. Indeed, it’s not who is in the Oval Office that matters for yacht sales, but rather even larger macro events that shape the superyacht market in particular. The early-to-mid aughts from 2002 to 2006 saw a booming economy despite the onset of American-led wars in Iraq and Afghanistan under the auspices of George W. Bush. When the economy crashed just a few short years later in 2008, yacht sales dove with it. However even back then in those dire financial times, received wisdom in the industry was that the money was still there, it just wasn’t being spent. Nevertheless the five year period between 2008 and 2013 was one of the slowest in the yachting industry’s history. By 2015 the cycle had resolved itself, and boat sales picked back up at the tail end of the Obama administration. By 2016, the inauguration of Donald Trump buoyed the confidence of the boating elite, many of whom identified with the president’s swagger and disdain for regulation. By that year boat sales had recovered to right about even with pre-crash numbers. Things chugged steadily upward until another macro event far larger than the presidency reared its head. This of course, was Covid. The Pandemic touched everything, and everything it touched it made weird. The boating market was no exception. The beginning of the Biden administration saw boat sales skyrocket. Brokers reported selling large yachts like they were candy. Everyone wanted to get away, and the best way to get away was to set sail. The industry is still seeing a shakeout from those strange and halcyon days–perhaps even a hangover. Sales have cooled considerably as times have returned to some semblance of normalcy.
As we barrel toward a wildly uncertain election result in November, the yachting industry is holding its collective breath waiting to see what happens. However as history has shown us, it may not really matter that much at all.
Written by Chris King
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