The rise of the Asian yachting industry
The Asian yachting industry is on the rise. With a growing expat community taking to the water, as South East Asian destinations continue to flourish, Asia is slowly realising its full potential with the market experiencing a healthy level of demand for charters as clients look for an exciting alternative to the Caribbean.
Southeast Asia’s yachting and sailing event calendar is reaching saturation point with the number of regattas and superyacht shows increasing exponentially year on year.
The global yacht industry is expected to reach US$74.7 billion by 2022, driven by the rising interest in luxury cruising among high-net worth and ultra-high net worth individuals particularly in developing regions of Asia-Pacific and the Middle East, richly benefiting from a growing trend towards marine tourism and water-based sports and leisure activity.
Vrit Yongsakul is Group Managing Director of Boat Lagoon Yachting, one of Asia’s largest yacht importation, distribution and after-sales service organisations, representing some of the world’s most prestigious yacht brands. “The business has generally grown as buyers have become more appreciative and attracted to the lifestyle pleasure and benefits that yachting brings,” Yongsakul explains. “As their experience grows, the trend also moves, towards the bigger yachts (from 60ft to 130ft).
“People are travelling further and longer on their yachts as well as enjoying customising layout and specification with the larger yachts to suit their needs. There is more corporate usage for entertainments as well, as private vessels, especially in destinations such as Singapore and Phuket where there is a growth in the charter market, as well as for pre-owned vessels.”
The growth can be attributed to a combination of things including better infrastructure and supply of services in the region, together with governmental support of many countries (especially Indonesia, Singapore, Malaysia and Thailand).
“The owners themselves are seeing and discovering the beauty and accessibility of our cruising around South East Asian water which is among some of the most unique and beautiful waters in the world,” says Yongsakul, adding, “often with new hotels, restaurants and clubs, unspoilt surroundings and safe anchorage to cater to every need.
“For Princess Yachts, we are lucky to be able to offer turnkey services for our owners, especially after-sales and technical support for these luxurious and advanced motor yachts that we represent, as well as additional services such as yacht charter and dedicated yachts management to make the boating experience as hassle-free and enjoyable as possible.”
Although the luxury yacht market is starting to take off, there are striking differences between the Asian and Western yacht markets. “Chinese ultra-high-net-worth (UHNW) individuals tend to require less powerful motors,” Yongsakul explains. “They want larger indoor areas for corporate entertaining activities with smaller outdoor decks and fewer sleeping cabins and they like to be part of exclusive marina clubs. Not many want to have to pay over the odds with regards to import tax from Europe, but they are willing to spend significantly to hire a crew rather than managing their yachts themselves.
“In the West, buyers tend to go for super yachts, which are faster and smaller in size; along with more toys. Additionally, because of affordability, a mid-size boat of 50ft to 60ft is always manned by an individual and his family. However, here in Asia, we are quite fortunate as having a full-time captain and crew is extremely affordable, so no matter the size of the boat, typically everyone has either a crew or a captain.”
Yongsakul continues to describe the nuances of the two markets. “In the West, in Europe particularly, they tend to go boating as a family or by themselves while here in Asia, people like to go boating in groups; they like to come together, raft up, make a meal and go diving or snorkelling together. The ethos of Princess Yachts is very family-oriented and so I think it’s fantastic that that’s within the framework of what we do. Having a full-time captain and crew is good because it allows the clients to enjoy their boating – they can socialise in the knowledge that someone is able to do the driving or mooring for them.”
The markets within Asia vary greatly as to the customer base, with some territories experiencing massive take-up amongst expats. “Our clients are a mixture of locals and expatriates,” says Yongsakul. “If you look at Thailand, certainly in Phuket, the market is almost 90 percent expats and 10 percent local. If you go to Pattaya or Bangkok, it is 70 percent local to 30 percent expatriate. Here in Singapore, there are a lot more Singaporeans buying boats as compared to expatriates. It’s really a case-by-case situation in the area. We sell to all individuals who are interested in boating and we have a variety of products we can offer them. We will always do our best to provide them with the right product to fit within their budget requirements.”
According to Yongsakul, Asians are more concerned about the price and the ‘value-for-money’ aspect to purchasing a yacht. “Princess is very efficient in their manufacturing and their philosophy has always been to try and build a boat that they can sell at a very competitive price, so you get a lot for your money. When you’re looking at a standard specification of a Princess Yacht, you’ll often find it’s a lot higher than our competitors. We throw in a lot of specifications that are standard and free of charge. We tend to keep our options very lean so when the buyers are looking at the base boat, they can see that they’re getting a lot of boat for their money.”
Of course, with growth in any market, challenges can present themselves. “We’re not quite there yet, but I think we’re getting close to lack of berthing,” Yongsakul warns. “Certainly, in Thailand, we have a problem. Obviously, we own our marinas so we’d always be able to find a berth for our clients, but here in Singapore you can sense that the berths are starting to fill up and we’re now having to look further afield in Malaysia, where Johor Bahru, for example, are expanding marinas there.
“I don’t think there are any challenges with the product, however. We can supply our clients with boats – it’s just whether we can find them a berth. Luckily, we’ve been around in the region for a very long time and so all the marinas know us. We are very well-respected and renowned in the region and thus, so far, we’ve never had an issue finding a berth. But that might be a problem in the future.”
Another consideration could see governments imposing environmental restrictions on boats. “It’s still very much open, but that could play into par. The shipyards are very environmentally conscious and many manufacture their hulls through resin infusion; it’s a cleaner manufacturing process as compared to the traditional hand-laid up method and so releases less emissions. Princess Yachts is one of the only few manufacturers that has a certification for compliance in EU emission regulation.