Starting in late February 2022, stricter sanctions were imposed on Russia in response to Russia’s illegal annexation of Crimea and invasion of eastern Ukraine alongside various other serious allegations.
The Central Bank of Russia was blocked from accessing more than $400 billion in foreign exchange reserves held abroad. Plus, the EU inflicted sanctions on a range of Russian oligarchs and politicians.
Some of the world’s largest and most expensive superyachts are stuck at ports and shipyards due to the US, the UK and the EU imposing sanctions on Russia. These sanctions were put in place to pressure Vladimir Putin’s invasion of Ukraine.
In his previous State of the Union address, US President Joe Biden said, “We are joining with our European allies to find and seize your yachts, your luxury apartments, your private jets.”
This tremendous turn of events shook the yachting industry, which had been skyrocketing with demand over the last few years (even during the outbreak of Covid-19)! The once booming industry has now been left in rocky waters with uncertainty ahead.
“We’ve had a phenomenal couple of years in the industry,” international luxury business strategist Alice C. I’Anson Widdows (tells CNN Travel). “Demand has been outstripping supply. Then suddenly we’re being halted mid-production.”
Buyers abroad are hesitant, to say the least, and have been holding off making any purchases. This hesitation has a massive impact on sales, especially in the short term.
The yachting industry is famously known to be the most attractive to Russian consumers. Sales have been dropping, affecting even the most prestigious brokerages. Not only have the sales of yachts been declining, but the chaos has increased the number of checks onboard the yachts by local customs.
With unsanctioned ships being allowed to move freely and sanctioned ships not, this has caused turmoil for the yacht crew, who is also greatly affected by this current climate.
However, the growing industry is still prevailing; although there is scepticism, the demand for yachts is increasing! The American buyers appear to be less hesitant than the European buyers. Thus, “In 2020, US and Canadian buyers jointly made up 24% of all new-build sales of yachts over 40 meters to buyers whose nationality was known, according to data from intelligence platform SuperYacht Times iQ.” CNN Travel, 2022.
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