MYBA: Economic Impact of Yachting

It’s a no-brainer to anyone who works in the superyacht industry: That for such a niche market, the economic impact it substantial and far-reaching. 

However, despite the visibility of superyachts all around the world, among those outside the business of yachting, misconceptions abound. In recent years this has been damaging and costly. In times of economic crisis, luxury and privilege can lead to bad PR, and it hasn't been easy for the industry to dispel negative attitudes towards what is clearly an elite sector. In reality, the yachting industry creates hundreds of thousands of jobs worldwide, but quantifying and communicating this fact has been challenge.    

The best place to start is to look at the figures, and an economic impact study conducted by the London School of Economics and Political Science tells a different story.

According to the study, which spanned five countries from 2007 to 2011, more than 85 percent of the industry workforce is in the physical labor sector. “This contrasts starkly with the popular glamourized image of the industry,” the study claims. “This study has tried to do away with this image and highlight a very important but often forgotten part of the industry; its hard working physical labor force.”

Other highlights from the study, which was commissioned by The Worldwide Yachting Association (MYBA), reveal that in three of the five countries, “employment levels in the superyacht industry have performed remarkably better than national employment levels.” Indeed, the total number of people employed across the board rose by more than 10 percent over the span of the study.

Not only that, but superyachts generate about € 4.654 billion (£3.7 billion or $6.2 billion) in revenue across the four countries where data was available.

“The results were truly remarkable,” says Toby Maclaurin, the president of MYBA and commercial manager with Ocean Independence.

Unfortunately, the study also reveals another, less savory fact. The possessiveness that pervades the industry and an unwillingness to work together for the greater good. Because when the team contacted 96 companies to answer simple surveys, only 13 responded. Of those, only 7 divulged the information sought after. The rest cried confidentiality.

“Lack of motivation to answer the survey questions and a lack of understanding the importance of such studies on the part of the respondents appear to be the primary reasons,” the team concludes.

And while this study is the most comprehensive, most neutral that exists, the team says it could have been much more complete with the cooperation of the very companies that stand to benefit from its findings.

“It becomes more and more important for us to communicate amongst ourselves when we’re trying to put across the value – the economic value – of our industry,” says Fiona Maureso, the vice president of MYBA and charter director at Northrop & Johnson. “We have to be sending out the same message.”

The study

While several such studies had been conducted previously, most were executed by entities with a lot vested in the industry. Not only did they not have any experience in the matter, but there was an inherent conflict of interest.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Other useful and interesting studies have been carried out, but what makes the MYBA-LSE study so relevant and unique is that it is a neutral, academic work researched through recognized academic sources rather than by industry companies, media groups, or any entity with a vested interest,” says MYBA General Secretary Coralyn Tracey.

MYBA was looking for an academic and unbiased study that could be used to help turn the conversation in Brussels from shiny boats to good-paying jobs.

“It seems logical to many, but sometimes it’s not logical on a political level,” says Maclaurin.

The study used two global databases with information on a combined 75 million companies. Of this, they were able to collect data on more than 550 companies across five European countries: Italy, France, Spain, Greece and the Netherlands. That data was used to make “conservative estimates about the contribution of the superyacht industry.”

The data covered the following sectors of the industry: shipyards for new builds, new builds and refits, marina and port businesses, manufacturers and suppliers, brokers and charters.

It tracked these sectors from 2007 through 2011. Even though this period is a snapshot taken in the midst of the economic downturn, the numbers proved surprisingly upbeat – especially when compared with their national counterparts, with employment growing by more than 10 percent.

“The superyacht industry has managed to attain this growth rate in spite of the financial crisis in 2008, which was particularly severe on the economies of the five studied countries,” the study notes. “In three out of five countries studied, employment levels in superyacht industry have performed remarkably better than national employment levels.” 

It used that data, along with national data, to produce statistics on employment breakdowns, employment trends, superyacht employment trends compared with national employment, and revenue production.

Here are the highlights:

Employment breakdown:

-Superyachts produced around 30,000 jobs across the five countries. About 86.5 percent of those jobs were in the physical labor force.

-Suppliers and manufacturers is the leading sector in France (53%), Spain (38%), the Netherlands (35%) and Greece (28%).

-In Italy, new build yards are the leading employers (38%); although when combined with other yards which include refit, the total grows significantly (57%).

Employment trends:

-Italy, France and the Netherlands all maintained predominantly uphill employment trends, while Spain and Greece – two of the countries hit hardest by the recession and E.U. austerity – saw its industry employment fall.

-Italy: Employment grew at a year-over-year rate of 11.6 percent, going from 7,500 workers in 2007 to 9,500 in 2011.

-Netherlands: Growth of 3.7 percent, from 7,200 jobs to 7,800 jobs.

-France: Despite a dip in 2008, it experienced growth of 1.4 percent; from just under 5,600 to just over 6,300.

-Spain: Experienced a slight drop; with more than 5,000 jobs reduced to 4,800 over the timeframe.

-Greece: Much more volatile numbers than anywhere else. Experienced negative growth in three of four periods. Went from just over 1,900 down to 1,700 jobs.

Compared with national trends:

-All countries experienced either higher-than-average trends compared with national figures, or figures which mirrored what was going on nationally.

-In all cases excluding Greece, the superyacht employment numbers were much more consistent in their trends then national figures.

Revenue breakdown:

-Suppliers and manufacturers produced the highest amount of revenue in France (54%) and Spain (40%).

-Italy’s new build and refit yards produced 64 percent of its revenue.

-Greece’s highest-grossing sector was the ‘other’ section with 32 percent.

-The authors were unable to generate enough information from the Netherlands to generate workable data.

Direct and Indirect impact:

-The superyacht industry generated around € 4.654 billion across the four countries where statistics were available.

-Italy: € 1.5 billion in direct revenue; € 704 million in indirect revenue.

-France: € 482 million in direct revenue; € 885 in indirect.

-Spain:  € 416 in direct; € 475 in indirect.

-Greece: € 83 in direct; € 75 in indirect.

Lessons learned

The study puts the firm numbers – or at least the firmest yet available – to demonstrate the reality of who is at the heart of the superyacht industry. “The impact really is upon normal, working, regular people,” says Maclaurin. “Policy makers and government regulators should be made aware of this caveat,” the study says.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

However, this study is by no means complete or comprehensive. The authors themselves admit that more data is required. The smaller the industry, the more difficult it is to be able to come to an accurate estimate – especially in a highly competitive market like superyachts where companies are so protective of their information.

As mentioned earlier, the London team also tried to get a sense of on-shore spending in the south of France. They asked 96 companies to fill out a survey regarding their yearly APA (advanced provisioning allowance, give that this was considered a good starting point). Only 13 companies responded; six of those refused to supply the information, saying it was confidential.

However, among the seven companies there was a not-insignificant total of € 22.32 million in APA collected.

It’s numbers like these that could help shift the conversation as well as perceptions of the global superyacht industry.