Are Superyachts Ditching St. Tropez?

10 August 2017

Is St. Tropez losing its dazzle? This French Riviera favorite is mourning a decline in visitors — specifically among the superyacht set.

According to local media, revenue at St. Tropez’s marina has fallen by 30 percent, while Toulon has witnessed a 40 percent decline. Instead, superyacht owners are opting for the likes of Spain or Italy, which offers similarly stylish resort towns where berthing fees, fuel, and crew costs are lower.

France’s strict enforcement of EU regulations regarding diesel fuel and higher costs are reportedly to blame. A new requirement raising French taxes and a decree that social benefits should be paid to crewmembers was introduced in March. Port Vauban Manager Franck Dosne has stated to the media that these national insurance, health, and other compulsory contributions to crewmembers increased from 15 to 55 percent of their wages.

“The immediate consequence of the enforcement of this decree and a sharp increase in employers’ contribution rates is that French residents working as crew are now unable to find work, and French residents already employed as crew are losing their [jobs],” says Thierry Voisin, a Nice-based broker, former president of MYBA, and current president of the European Commission of Professional Yachting (ECPY).

He adds that since the law now extends to all vessels whose crew spends more than 90 days in France, French shipyards are now liable to lose business to neighboring countries. He cites an example — Monaco Marine and Compositeworks lost a six to seven million-euro contract.

To add to this overall malaise is a de facto increase on diesel tax, which Voisin says is not evenly applied in other European countries. Charter yachts in France had lost their exemption from VAT and the national TCIP tax — a 50 percent tax on diesel fuel. ECPY has worked with a panel of experts to come up with a new charter agreement that has restored the exemption.

Voisin also notes there has been a drop in fuel sales in France. Local news source Le Figaro notes the four biggest gasoline distributors in the area lost 50 percent in sales for the 2017 summer season.

But, with the situation garnering attention in the press, the new government is taking notice. “Two days ago, we visited the new minister of transport and as a result of this conversation, the matter was directed to President Macron,” says Voisin. “Yachting only helps bring revenues, it helps build ports, and the only thing it needs is to be left alone.”

In an open letter to the media, three French politicians urged President Macron for “urgent harmonization of tax and social regulations at the European level.”

“Refueling a 42-meter yacht in Italy (instead of France) gives a saving of nearly €21,000 [around $25,000] a week because of the difference in tax . . . while the additional cost of maintaining a seven-person crew in France is €300,000 [around $356,000] a year,” they wrote.

Voisin is hopeful that action will remedy the situation, but as he puts it, “How long will it take to regain the trust of people the new law has scared away?”