How are Houthi attacks in the southern Red Sea affecting the superyacht sector?

BOATPro investigates how the superyacht sector is being affected by Houthi rebel attacks on commercial shipping in the southern Red Sea. Make sure to listen to our BOAT Briefing podcast where we unpack the long-term effects of the Houthi attacks on the industry as a whole.

Last March, American automotive entrepreneur Bob Giles was busy making the necessary preparations to send his yacht, the 29.6-metre Nordhavn explorer VivieRae II, through the Red Sea to the Mediterranean in time for charter season. But Giles – and other yacht owners – would soon discover that what was once a fairly routine journey had become something of a nightmare.

In November, Houthi militants began a series of attacks on commercial ships passing through the southern Red Sea and Gulf of Aden, allegedly to pressure Israel into a ceasefire amid its ongoing conflict with the militant group Hamas in the Gaza Strip. In light of the raised security risk, private yachts have largely withdrawn from the Red Sea, deterred by not only the risk of harm, but also additional insurance premiums and security requirements.

“No one especially wants to go through the Red Sea right now,” Giles said in March. “If I didn’t have a pressing need to reach the Mediterranean this summer then I wouldn’t have considered it. But as long as the insurance comes through, our plan is to make the transit in May [2024]. If I can’t get the insurance, then I have to make a decision: do I just take the risk and go naked without any insurance through that area? I haven’t gotten that far because I haven’t yet been told that I can’t get coverage.”

A few months after our initial conversation, Giles received his answer, and it wasn’t as he had hoped. On top of the yacht’s annual insurance fee, additional premium, armed guards and $10 million kidnap and ransom cover per individual crew member – all of which he had been willing to shoulder – the insurance companies came back with a final requirement for a military escort. 

For Giles, it was the straw that broke the camel’s back. “I just couldn’t justify the cost and all the demands that they had. It was adding up to about $450,000 in insurance and fees, and even then [the transit] still would have exposed the vessel and crew to danger. When it got to that point, we ultimately made the decision to cancel going through the Red Sea.”

Giles’ account is hardly an isolated incident. Seeing as extended voyages are often built years in advance – with budgeted periods for cruising, maintenance and large passages all factored in – the sudden onset of disturbances in the southern Red Sea and Gulf of Aden left a number of yachts scrambling for contingencies.