Before the global financial crisis, locals say a penthouse owner in Monaco with a choice view of the Grand Prix Formula One race could command five months rent just by subletting it to a visitor eager to watch the popular one-day auto race each spring.

Now, owners of apartments along the racing course that runs the narrow streets of Monaco can be lucky to rent out their prime spots at all, and the inflated prices of the past are just a distant memory. In the Grand Prix that just finished in May, the locals say the rumor was that grandstand tickets were being sold at fraction of their face value minutes before the start. This had never been reported/rumored in previous years.

Like the rest of the world, Monaco as well has been marked by the collapse of Lehman Brothers in September 2008 and the subsequent global financial crisis. Of course here, it could come down to someone choosing a smaller yacht rather than losing their home or job.

The glitz and glamor of the constitutional monarchy and principality primarily inhabited by wealthy foreigners remains. Yachts, a couple that could rival the Staten-Island Ferry, line the sumptuous Bay of Monte Carlo, surrounded by heaving cafes, restaurants and full hotels. BMWs, Mercedes-Benzs and other luxury cars zip around the tiny roads dotted with labels such as Cartier, Gucci and Bulgari.

“People used to book a year in advance for four nights minimum, even five nights, now it’s shrinking,” said Michel Bouquier, the director general of tourism for Monaco of the Grand Prix race. “Probably over 2007 and 2008, prices went through the roof, everything was possible; demand was there, now it’s more demanding. People who are coming here are more selective. But also what we see is it’s last-minute bookings, which was not the case until now.”

Monaco is a draw for companies in Europe and elsewhere who want to reward employees for a job well done with a conference in a posh locale or even a few days in a hotel. But Bouquier said in the wake of the financial crisis, many companies didn’t want to be seen in the luxury destination as they cut costs and jobs back home.

So far this year, things are looking a bit better. He said business tourism is up 22% in the first quarter, which is above 2006, though still below the pre-crisis high ahead of the Lehman’s collapse. Leisure tourism, down 11% last year in terms of hotel bookings, is also coming back. “We’re not at full speed, but we’re catching up,” he said.

However, Bouquier said if the financial crisis facing European governments gets worse, business travelers and companies could curb plans again. “Cross fingers, but if we do have that, business tourism will be definitely affected.”

Doing without a yacht

Trevor Gabriel, a real-estate broker for Monaco Villas Real Estate, which sells top-end properties in Monaco and the south of France and yachts, recalls the boom years with Russians and high-earning U.K. individuals at the forefront. “A lot of people had a lot of cash and wanted sunshine and a nice life,” he said.

Since then, he’s noticed that in Monaco buyers and sellers have been trouble agreeing on a fair price.

“To a degree, sellers and the whole world are in a form of denial at the moment. They still think the world economy is chugging along, albeit at a low level,” said the 20-year resident of Monaco. “Many people reckon they’re more realistic and reckon it’s only bubbling along because various banks don’t want to foreclose and shut the whole thing down. There are few foreclosures so the myth carries on that the world is OK.”

As for the prices, they are definitely down; though still make the jaw drop. “Top-end properties pre-2009 were up to €60,000 per square meter and now it is hard to imagine anything selling at more than €50-55K/per square meter,” he said. Mid-range properties that were changing hands at €40-45,000/square meter, will now fetch closer to €25,000 to €35,000, said Gabriel.

Yachts are a slightly more telling story, as they tend to be financed, and that’s not as easy to do as it once was, even in Monaco, said Gabriel. “I don’t think the government themselves are concerned about foreclosures on yachts than real estate. But there are an awful lot of non closures where the owner says, ‘Keep the yacht.’

“In the yards (where boats are built), there are several yards of boats sitting,” he said. “Then you’ve got the other people who just refuse to take delivery of a yacht when it is finished.”

“It’s a windfall for the boat owners as the buyers have paid for most of it. All these yacht builders have done well over the last 10 years provided they haven’t blown it. They will have to withstand it. The longer it lasts, though, the more difficult it is to carry on. Order books are dwindling fast.”

A last-minute roll of the dice

At the Groupe Monte-Carlo SBM, the biggest and oldest casino and hotel group in Monaco whose main shareholder is the State of Monaco, CEO Bernard Lambert said the casino business took a hit after Lehman’s because customers did not want to be seen playing in the wake of the meltdown.

“Since 2008, we have had very, very little clarity on the outcome. We have no visibility. The clients, all the seminars and organizers really make their decision at the last moment,” he said, noting that July and August are the exceptions and months when high-end clientele continue to come.

The U.S. incentives market also plays a key role in earnings for the casino and hotel group. Locals in Monaco are not allowed to gamble.

“The little bit of hope we can see in last two months is we’ve seen number of requests to the U.S., which totally disappeared in the last two years, surged for 2011 and for 2012,” he said. He added that the desire to hide money is fading away somewhat, versus two years ago, when people definitely did not want to show they still had money in Monaco.

That reluctance to flash cash is a long-standing habit of many who live here, say Monaco Villa’s Gabriel. Luxury goods shops are curiously empty and he explained that that is not from the crisis, but merely from the fact high-earning locals or visitors don’t want to be seen sporting expensive shopping. If they want to shop, they have the hotel send goods to their rooms or their yachts.

In Monaco itself, the government depends on indirect income taxes, taxes on companies — there is no individual income tax, which is the biggest draw of foreigners who come to live here. Since the crisis of Lehman’s Monaco’s economy has slowed, said Jean-Francois Robillon, the president of Monaco’s Parliament.

He said the country’s fiscal income fell 17% to €774 million euros in 2009 against the prior year. The country derives all its revenue from indirect income taxes such as value-added tax and taxes on companies, because there is no individual income tax.

“I hope the crisis won’t get worse in Europe. We are going in the right direction,” he said, noting that the income figures are showing gains over the last two or three months, bringing them back up to levels of 2006 or 2007.

As for speculation that as taxes move higher in cash-strapped European countries, high-earning individuals may seek to relocate in Monaco, Robillon said he has seen no “economic refugees so far.”

“We hope people can find in Monaco a good place to live and make a job here. We don’t want refugees; we want people who want to live in Monaco.”

However, Monaco Real Estate’s Gabriel said undoubtedly, higher taxes abroad will make Monaco look better.

“We’re expecting more inquiries, but it hasn’t really happened yet to a great extent. Everyone in the services sector is expecting the enquiry level to increase. We’re sure it has. Banks, tax advisors, surely those guys are getting enquiries and it will filter down to more people like ourselves.”

Source : Marketwatch

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Guests and friends met at the Yacht Club de Monaco on June 27th to bid each other farewell at the conclusion of The Rendezvous in Monaco,builders)

For the first time in Rendezvous history, owners and guests of the 15 superyachts (from 39 to 75 meters, a combined length overall of nearly 700 metres) which have participated in the past four days of fun and friendship, enjoyed an elegant social programme along with on the water activities including cruising in company.

Along the greeting cocktail organized on the jetties of the harbor by the Direction du Tourisme et des Congrès the Oceana Ball, a gala diner in favor of the Oceans preservation as well as a “Diamonds & White” party. New nautical animations were organized all week long including a parade between Monaco and Saint-Jean-Cap-Ferrat and a Tender Poker Run, organized by the Yacht Club de Monaco and Société des Bains de Mer.

At the Sunday brunch, General Secretary of the Yacht Club de Monaco, Bernard d’Alessandri and Tony Harris, CEO of Boat International Media invited guests to The Rendezvous in Monaco prize giving. First awards were for the Concours des Chefs, in which the chefs of each participating superyacht had competed for the honor of impressing a panel of Michelin-starred chefs who judged the contest.

Head of the judges was head chef to Prince Albert of Monaco, Christian Garcia, who kept the audience in suspense for the final outcome, before revealing the winning chef, Michael Goller of My Petra, a 44-metre Heesen yacht. Mr Goller could not disguise his pride and delight at winning, as he raised his trophy aloft in triumph, along with a jeroboam of Moët & Chandon. “This is thrilling to win this prize,” said Mr Goller. “I knew I’d done a good job but then I knew all the other chefs would have done a good job too, otherwise they would not be working on a superyacht, so I can’t tell you how excited I am to win this award.” Craig Stevens, chef of the 62.5-metre Icon, won the Special Prize for Outstanding Dessert.

Final award of the prize giving was for the Prix “Art de Vivre La Belle Classe Superyacht Moët & Chandon”. Again this was judged by a panel of five experts, representing the Yacht Club de Monaco, Boat International Media and Moet & Chandon.

Since its creation in 2005 at the instigation of H.S.H. Prince Albert II, President of the Yacht Club de Monaco, “La Belle Classe” has established a code of good conduct and etiquette among members of the superyacht industry, with the intention that: “Today’s superyachts can survive the test of time to become the classic yachts of tomorrow.”

The “Art de Vivre” award pays tribute to the owners of superyachts’ way of “Living the Sea”, and the judges were asked to consider three criteria:

- The owner’s approach and philosophy of “Living the Sea”.
- Respect for Etiquette.
- Crew Behavior during the week and quality of greeting.

The judges agreed that the winners of the Prix “Art de Vivre La Belle Classe Superyacht Moët & Chandon” was Mr & Mrs Howard Meyers, owners of Ingot, a 47-metre yacht launched in 2008 by the American shipyard, Burger Boat Company. “It’s wonderful to win such an accolade, and we’re very happy,” said Mr Meyers afterwards.

Raffaele Costa, owner of the Amy Admiral 54 superyacht, Sea Force One, and a member of the Yacht Club de Monaco, said: “The Rendezvous has managed to bring owners and their guests together in a way that has never been done before. It’s a very unique event and more people need to learn about The Rendezvous and experience it for themselves. This year has been incredibly well organized, spot on with the weather. Going out to sea was great, and maybe next year we could even go out for one night on the sea. That could be extraordinary. But this year’s event is the result of a lot of hard work and we have enjoyed a beautiful time in Monaco. Looking forward to next year’s edition!”.

The next Rendezvous in Monaco will take place in June 2011.
www.superyachtrendezvous.com

Source: VisitMonaco

Photo Credit: SuperyachtRendezVous

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