The Rise of Eastern Mediterranean Yachting - September 2021
In this insight, our Cyprus BD Director, Christina Economou, offers some insights into the 2021 yachting market and explains why many non-EU vessels are now choosing Eastern Mediterranean locations over more traditional yachting hotspots of the Western Mediterranean.
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Superyacht sales surge in 2021
According to the luxury lifestyle publisher, Boat International, more than £1bn was spent on superyachts in 2021, with escape from Covid lockdowns and travel restrictions being a major driver of this surge. Statistics show in fact that 2021 is set to go down in history as the biggest year ever for superyacht sales, in particular second-hand vessels.
In this regard, data published by The SuperYachtTimes state that a record number of 381 pre-owned 24m+ yachts have been sold since January –twice as many during the first 6 months of 2020 and more than in all of 2019, where 261 yachts were sold. With regard to the new yacht market, boats are now selling in unprecedented numbers, with over 100 new 30m+ yachts sold so far in 2021.
This upward trend is going to stay with us for the rest of 2021, as strong levels of international activity and solid client demand for both pre-owned and new yachts show no signs of abating.
From the traditional yachting hotspots…
Along with this remarkable rise of sales, it is interesting to note the changes in usage and locations that have been happening for some time within the industry, and what that will mean for the Eastern Mediterranean and in particular islands such as Cyprus.
New research released by Bloomberg suggests that traditional yachting hotspots such as Spain and France are falling out of favour with the wealthy. According to the data, Spain welcomed 26 fewer yachts over this summer compared to last year, while France saw 16 fewer – equating to a near 25% decline of yachts mooring in Spanish waters and just under a 10% decline for France.
What has certainly impacted these figures is the fact that non-EU vessels no longer have such easy access to France and Spain, due to complex tax and VAT regulations and confusion around how they apply, as well as the ever-increasing costs associated with chartering in these historic key yachting hubs.
In addition, the recently introduced measures to protect seagrass meadows and marine life have brought in restrictions on the anchoring of vessels on large sections of the French Mediterranean coast, further discouraging yachts from stopping in the Western Mediterranean area. According to these latest restrictions, vessels over 24m (or 20m in some cases) are now prohibited from anchoring, mooring or otherwise stopping within protected areas and those who ignore warnings or otherwise break the rules can expect significant penalties, including a temporary or permanent ban on sailing in French territorial waters, up to one year’s imprisonment and a €150,000 fine. Over 70 vessels have been fined so far this year.
… to the rise of Eastern Mediterranean
All the above conditions have certainly been putting extra pressure on non-EU vessels and making them set sail for alternative European destinations – in particular, Eastern Mediterranean ones. The latest statistics show that the number of vessels operating in the waters around Croatia, Turkey and Greece is at a three-year high; Croatia is up 25 from 2019, Turkey is up by 12 and Greece is up by 10 – the totals so far for each country are 64, 63 and 145 respectively.
The rise of the Eastern Mediterranean is not a new phenomenon, but it is certainly more in focus than ever before. Croatia, Montenegro, Corfu, the Greek Islands, Cyprus and Turkey are all now on the radar – along with stunning scenery and modern infrastructures for yachts, they also offer the perfect gateway to the Suez Canal and key locations in Egypt, Lebanon and Saudi Arabia.
Among the numerous gems of the Eastern Mediterranean, many yacht owners have been choosing the vibrant island of Cyprus, the third largest island in the Mediterranean, as their new European yachting hub.
Cyprus in Focus
With more than 340 sunny days per year and a blissfully subtropical climate, Cyprus offers excellent year-round cruising with plentiful diversions on land and sea.
Not only is Cyprus one of the safest and most interesting yachting destinations in Europe, it is also an abundantly easy destination to get to, whether travelling from Europe, the Middle East or Asia. As a Middle East gateway, Cyprus is a core destination for Russian and Middle Eastern yacht owners, with Lebanese owners in particular using it as a home base for their yacht activity.
The Republic of Cyprus has a long history as maritime hub. Currently, the Cyprus Registry is the 3rd largest fleet in the European Union and the 11th largest merchant fleet worldwide, accounting for more than 1,000 vessels and 21 million gross tons. The city of Limassol is the largest third-party ship management centre in the EU and the Cyprus flag manages roughly 20 percent of the world’s third-party ship management fleet.
Recognising the significance of marine business activities, the Cyprus Government has been attracting entrepreneurs and new business on the island by investing in advanced infrastructure and offering the right legal and fiscal ecosystem for those choosing Cyprus for yacht registration purposes.
Cyprus has in fact invested in and developed some of the most luxurious new marinas in Europe; from the superyacht marina in Limassol, managed by Campers & Nicholson, which has berths for 650 yachts and superyachts up to 110 metres, to Cyprus’s new state of the art marina in Ayia Napa which can accommodate yachts up to 85m and offers dry stack storage, repair facilities, a VIP Beach Club, high-end shops, crew facilities and a host of restaurants and bars.
In addition, registering a yacht in Cyprus offers many advantages for the operation or management of vessels registered under the Cyprus flag, for example no tax on the operational or management profits on Cyprus-registered ships, no tax on income or dividends received from a ship management company, no estate duty imposed on inheritance, no income tax imposed on the wages of the officers or crews, low tonnage tax based on gross tonnage and no stamp duties for ship mortgage deeds or security documentation. Besides that, the country has a network of local inspectors for yachts with far-reaching services in significant ports all over the globe.
Moreover, there are currently significant refit projects happening and Cyprus has a highly educated and skilled labour force, well-known for their work in vessel operations and maintenance in both the commercial and leisure industry, and fully qualified to undertake extensive marine repairs and maintenance.