What effect is the war in Ukraine having on the yachting industry? What fallout will there be on the crews, yachts under construction and the charter season?

David Seal, well-known broker and blogger, with years of experience in the industry, tried to answer these questions in a video which he published on his YouTube channel,  “What effect is the war in Ukraine having on the yachting industry?“.

According to David Seal, since around 10% of super yachts around the world are owned by Russians, the war in the Ukraine will have an impact on the industry mostly for crews, yachts under construction, brokers and the charter yacht segment.

THE IMPACT OF THE UKRAINE CONFLICT ON CREWS

The crews currently working on Russian yachts are worried because of Russia’s exclusion from the SWIFT system, in effect removing Russian finances from the global bank payment circuit.

How will they get paid? How will yacht maintenance be covered? These are just some of the most common questions. According to David Seal, “we need to consider that Russian owners, especially the very rich, will have money not only in Russia but also in other countries like, for example, Switzerland, Monaco and Cyprus.”

This notwithstanding, sanctions from the European Union are targeting specific individuals with tailored measures to freeze their assets. The crews of Russian yachts are therefore worried not only about money, because they are afraid of not being paid, but also about safety and security on board. For example, the case in which a Ukrainian sailor tried to sink the yacht of a Russian billionaire.  

THE IMPACT OF THE UKRAINE CONFLICT ON NEW-BUILD YACHTS

According to David Seal, a considerable number of yachts currently under construction have been commissioned by Russian clients and this, “is a dilemma for yacht builders.” In this regard, the broker forecasts two scenarios. The first is dependent on a quick resolution of the conflict: in this case, shipyards would not be too heavily impacted.  If, however, the conflict is protracted, legal questions can come into play that regard not only maritime law, but international law as well.

THE IMPACT OF THE UKRAINE CONFLICT ON BROKERING AND CHARTERS

Regarding brokering, David Seal confirms that this is, “an interesting period for brokers working with Russian clients”. Today more than ever, it is important for brokers to know their clients and where their money comes from.

The conflict will also have an impact on the charter segment, because many of the charter yachts are owned by Russians, and at the moment they are no longer available. The market is therefore more limited and is not able to offer the same range. In spite of all these issues, the broker claims that the yacht industry is still active and, even with the current world climate, business goes on.