Despite the predictions of big sales and profits, Asia’s yacht market is spluttering. But market watchers still hope that the habit will take hold.
The Singapore Yacht Show provides a curious scene. There are the Singaporean families with golden retrievers; delegations from Thailand, China and Indonesia shuffling along the piers, removing their shoes to step aboard yachts; and, of course, a strong expat contingent – although mostly on the sales side. Oh, and there’s a lot of Taittinger being handed around.
Perhaps part of the reason that it feels like a slightly odd gathering is that although this is one of the biggest pleasure boat shows in Asia, the yacht market here is still very young. While the proportion of sales to locals rather than western expats is rising (estimates suggest about 70 to 80 per cent of sales in the region are to Asians), the predicted explosion of new yacht owners hasn’t yet materialised. Instead growth is occurring in fits and starts and it’s still hard to predict which country will boom next. The usual way to understand the market is to follow the money but a lot of this money doesn’t want to be followed. Instead, the next best thing is to look at the professional shippers: firms that ship yachts from Europe on the four to six-week journey to Asia.
Amsterdam’s Sevenstar Yacht Transport is such a company. At its stand, co-founder and sales manager Peter Staalsmid talks about how promising the Asian market is. “Last year we doubled our numbers to Asia,” he says. “We see bigger boats coming this way. We’re also seeing people who we have shipped back and forth to the Caribbean for years, thinking, ‘Hey, let’s go east’.” Most boats are headed for Hong Kong, Singapore, Vietnam and Phuket, he says, but there’s also been a surprising uptick in Japan over the past five to six months. As for China: “It’s not really happening.”
Ask anyone at this show about mainland China and they’ll have a lot to say – but most paint a picture of great expectations that have so far been unrealised. “It’s difficult to buy a boat in China, even if the potential is massive,” says Vianney Guezenec, Asia-Pacific director for Beneteau-Lagoon. Despite much talk about opening up the country to yachting and marine tourism, the Chinese government has not made things easier, with obstacles including complex bureaucracy and high taxes. The country’s anti-corruption drive isn’t helping its cause either: the wealthiest buyers are still buying superyachts but they’re keeping them in Europe where no one asks questions, according to Guezenec.
As a result, Beneteau’s story is a familiar one among yacht-builders: it initially opened an office in Shanghai and then a few years ago, acknowledging that sales weren’t shaping up as hoped, moved the Asia base to Hong Kong and began broadening its focus. Luckily, there are plenty of other countries to focus on. The Philippines and its thousands of picturesque forested islands are a boat-owner’s paradise, although it struggles with a lack of yachting infrastructure; Indonesia is a similar story. Vietnam has more than 3,000km of coastline speckled with idyllic beaches and a number of new marina projects either underway or recently completed, arguably making it the most promising growth area.
Yet for the traditional boat-makers to crack the Asian market there will have to be a shift in the types of yachts being built. There’s a clear sense of frustration among manufacturers and brokers that customers here haven’t quite come around to their most impressive – and most profitable – superyachts. These are boats that can cross oceans but the average buyer here apparently prefers to simply go out for an evening and throw a party close to shore. Plus, marinas often don’t have a lot of space for massive yachts.
“The culture and mentality here is very different,” says Kristie Chan, Asia-Pacific sales and marketing manager at Australian superyacht outfit Silveryachts. “Most people just don’t like to go out in the sun. The Chinese, for example, don’t like to go swimming. They prefer to buy for investment, like property. And with a yacht they buy it and lose money.”
Beneteau-Lagoon’s Guezenec adds: “This market is still so new. We have to build the sailing culture here. It’s like the chicken and the egg. We’re building an industry from scratch.”
What Asian buyers look for in a yacht:
- Shelter from sea and sun: Buyers here want to be as comfortable as possible, so they want hard tops on the roof deck to block the sun and big sturdy hulls to minimise the effect of the waves. They also want plenty of space – and to feel like they’re in their living room rather than at sea.
- High-end European furniture: The Asian market tends to love western luxury brands so the higher-end yacht companies work closely with the top interior design and furniture firms in Milan to offer just that.
- Value for money: Despite their desire for brand names, buyers will often opt for cost-saving options.
- Entertainment rooms: Day cruises mean lower decks are filled with entertainment parlours instead of bedrooms. Mahjong, lazy Susan dining tables and karaoke rooms are all popular. If there is a bed, it’s unlikely that anyone spends a night there. “This is more like a bed for, ‘Oh I got drunk and need a nap’,” says one yacht-marketer.
- A western captain: A yacht is an effective status symbol but even better is to employ a full-time captain from the West. When the boat’s price tag is north of €15m, why skimp on the driver? Captains attending the show included Europeans, Australians and a South African.