Widespread regional government indifference to the marine leisure industry and yacht tourism and the subsequent lack of “Mediterranean-standard” marinas and other infrastructures in South East Asia (SEA) is something that we at Verventia have been trying to change for the past five or six years through all our lobbying efforts that go on in the background while we are organising the Singapore, Thailand and Hong Kong Yacht Shows.
Our efforts to encourage governments and yachting’s major players to invest so that the area can open its doors to international yachting have gathered pace over the last decade since we launched the region’s main industry sales and marketing platform, the Singapore Yacht Show (SYS). And despite the COVID-19 crisis, which has seen the 2020 edition of SYS delayed from March to October, we are still confident that change, while not immediate, will eventually come.
Despite our best efforts, there is still nowhere near enough business being done in this region. It’s true that, while the number of marinas in Asia has barely grown, boat buying and the number of people who are attracted by the idea here has increased significantly. In a global context, the Asian market is estimated to account for only 10-15% of new business globally, so, given that roughly a third of the world’s private wealth resides here in Asia, there is unarguably a huge potential.
In that sense, we are still at the very beginning of the development of the market. It may have more than doubled in the last decade, but it could grow an awful lot faster if two things happened: first, all the key governments would have to fully buy into the idea and be prepared to change prohibitive tax and visa regulations; and second, the industry should also buy into the idea by uniting and collaborating, with key stakeholders prepared to invest.
Neither of those are easy to achieve but we remain optimistic that we will keep making progress, and we can foresee some good things happening in the next year or two, post-COVID-19.
The senior team at Simpson Marine, one of the region’s most established players and a founding partner of every single edition of each of our shows since the beginning, concurs with our optimism for continued growth in the sector - they have sold over 100 new and brokerage yachts in the last year.
"The Asia brokerage market is very active, particularly in Hong Kong, Singapore and Thailand/Phuket," says Group Marketing Manager Ewa Stachurska. "There are some great options for clients looking for quick deliveries. Currently, the most active market size is 40-60ft flybridge yachts and 40-60ft catamarans. Since starting our business in 1984, we have sold over 3000 yachts, from 5m to 70m plus, most of them to Asian buyers."
It’s encouraging to note that many others amongst yachting’s leading names worldwide are fully supportive in seeing a SEA expansion and are also nurturing new business in Asia.
"We’ve been working with Asian clients and expats living in the region for over 15 years, so it is by no means a new market for us," says Y.CO co-founder and chairman Gary Wright. "We are seeing an increase in clients from the region across different areas of our business, including charter, purchase, yacht management and new build project coordination. Asian clients have specific expectations of their yachting experience and our team is skilled in meeting these and ensuring that both they and the onboard teams we work with are respectful and considerate to all aspects of Asia’s diverse cultures."
Cultural considerations have proved to be a major stumbling block as historically, local populations have viewed the ocean as a trade route rather than a recreational zone to enjoy with family and friends. There has never been much of a cultural affinity with the sea as a leisure playground in these parts in the past – the sun is too hot, the climate too humid and the seas in previous generations were seen more as convenient for transport, fishing and dumping waste. However, that’s changing rapidly, and we are really trying to drive that change.
The on-water lifestyle is one that Westerners have long enjoyed and there is definitely a growing appetite amongst affluent Asian lifestyle seekers to experience the thrills and adventures that come with owning a yacht or luxury boat. As wealth is handed down to younger, more adventurous and leisure-focused generations, we are starting to see more Asians buying big boats.
Ewa Stachurska agrees that attitudes towards yacht ownership are changing for the better: "In the past it was mostly for status and entertaining but that has shifted to genuine pleasure usage, enjoying with family and friends, fun with water toys and in an increasing number of cases, regional cruising," she says.
With Thailand welcoming almost 40 million international tourists last year, making it the most visited among all ASEAN countries, the big question is what needs to be done to further drive forward a marine leisure industry which could generate many hundreds of millions of dollars in income as well as local employment opportunities and technical progress.
At least part of the answer lies in enticing and attracting brokers to push owners and captains into considering SEA as a luxury superyacht destination. The more boats that come here, the more the latent market of thousands of potential charterers and eventual buyers would wake up and want to play too. However, existing owners – 90% of whom are based in the Mediterranean in the summer - are not going to be particularly motivated to invest in coming to Asia as a destination if punitive taxes and incohesive, unfriendly regulations are not changed soon
Despite the inherent problems and hurdles that inevitably lie ahead, there is much enthusiasm being generated by globally recognised brand leaders which already have a permanent presence in SEA.
An industry leader in pioneering unusual destinations all around the world, Fraser is keen to do the same for SEA. "Fraser has always championed new yachting destinations and we’re keen to see Asia develop and grow in popularity." adds Lisa Peck, Global Marketing Manager at Fraser. “We all hope therefore that the governments will make the necessary changes to regulations so that this can happen. There is already increasing quality infrastructure to support the needs of superyachts, which is a good sign. We are excited to see Asia flourish, creating a greater choice for charter clients to experience the exceptional cruising grounds on offer throughout the region.”
Lies Sol, Charter Manager at Northrop and Johnson in Phuket, is convinced that charter market growth will continue in the region. She cites US, Canadian, European and Chinese clients among the keenest charterers in the region with 30% of these being Chinese.
"The market is growing and the size and quality of yachts permanently based in Asia gets better every year," she says."For example, in Indonesia after Patty Seery started the trend of 6-star luxury phinisi - traditional sailing yachts - with SILOLONA around 2003, others saw that it worked and followed in her footsteps. Now I can easily count more than 20 luxury phinisis, each with their own style and niche market, but all catering to the top end of the market."
"In Thailand, the number of charter yachts of 30-45m has more than doubled over the past five years. Although many of the yachts are a bit older, they are usually extremely well-maintained with their interiors and furnishings regularly updated."
In sales terms, "consistent expansion" is the way Martin Holmes, Northrop and Johnson’s General Manager in Asia, describes the brokerage market, adding: "Asia is a fascinating market with a unique client profile."
"In the last two years, we have sold several yachts of between 24m and 35m to Asia-based clients and are actively working on two new-build projects. Right now, the 30-35m segment is interesting as many owners are looking for more range and stability. There is also considerable interest at 50-65m for some experienced Asian clients."
He believes Asian buyers are typically more interested in new builds, citing Feadship, Amels, Heesen, Cantiere Delle Marche, Benetti & Custom Line as the front runners for the sector. "Asian clients have high levels of expectation and prefer to avoid disappointment or too much risk," Martin adds. "A new build can help deliver this providing it is closely managed."
While government investment and co-operation, coupled with an overhaul of complex marine taxes and regulations is very much required - and will be examined in more detail in a forthcoming feature – one major advantage that Asia-Pacific possesses that is not in dispute is its abundance of pristine and largely uncommercialized world-class cruising waters.
The cruising grounds are spectacular, starting from Myanmar down to Thailand, through East Malaysia, the Philippines, Indonesia and all the way to Australia. The entire stretch is beautiful and uncrowded. Indonesia alone has over 17,500 islands, many of which are completely untouched. The culture and biodiversity of Asia-Pacific is its single biggest strength; it's a region unlike any other and this should be both celebrated and cherished.
Clearly identifying its cruising season and position within the global calendar would really help to establish this region as the world’s third – and in our view, the biggest and best – destination for cruising and charter yachts of all sizes.
SEA is not in any way attempting to compete with the Caribbean. On the contrary, we are just trying to grow the whole market. The Caribbean is the best place for wintering in the world at the moment - but they are running out of clients, as is Europe. We could foresee maybe 10% growth in Europe of the number of owners and charterers, and perhaps 15% growth in the US, too - but with a third of the world’s wealth in Asia, yet less than 1% yacht ownership here, this is undoubtedly where the potential for global growth will come from.
When thousands of new Asian clients start trying the yachting lifestyle, which they would do if their governments allowed us to bring yachts here for them to charter, they will want to explore regions that are new to them - the Caribbean and the Mediterranean. Some of the clients who have been sailing the Caribbean for the last 40 winters – and those numbers have halved in the last 10 years - will want to come to Asia for a change. Every sector can benefit but for that to happen, governments here need to back us in our project to turning ASEAN destinations like Thailand, Myanmar and Indonesia into the Mediterranean of Asia.
When those governments realise that the liberated yacht tourism we are pushing for is good, high-spending, yet sustainable tourism, and they change the regulations accordingly to allow yachting to happen here, the sky is the limit.
Meanwhile, as COVID-19 continues to dominate, we remain positive about progress continuing to be made in SEA once the crisis becomes more manageable. We were sadly the first international boat show to have to postpone, and we may well be one of the first to open again. We believe there will be renewed interest in boating generally after this horrible period is over. Being away at sea together with one’s close friends and family is likely to be an ever-more appealing idea for those who can afford to take up this lifestyle – and there are boats available for sale now that would meet any budget, large or small.
The huge latent market in Asia, coupled with the surge in interest we have seen over the last few years, has convinced us that, provided even just one of the more far-seeing governments here decides to open up their waters, the market will really start to take off in the region.
Despite the current chaos, we have at last been able to launch the new Hong Kong Yacht Show, completing the vital northern point of the Asian yachting market "golden triangle” and we are hopeful that the rescheduled Singapore Yacht Show in October, closely followed by the new Hong Kong Show in November, will give the industry the boost it will badly need by then. https://sgmarineguide.com/