As we have been reporting in these pages for some time now, Asia has rapidly been becoming a major yachting hub for that part of the world and beyond. The biggest growth recently in the Asian yacht market is in the countries of Southeast Asia – Malaysia, Thailand, Indonesia, and the Philippines – which have all been experiencing major growth in the motor yacht industry.
In fact, according to a recent report in the Business Review, 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 the emerging markets of the Asia-Pacific, an area that like the Middle East, has recently been benefiting from a growing trend towards marine tourism and water-based sports and leisure activity. “The business has generally grown as buyers have become more appreciative and attracted to the lifestyle pleasure and benefits that yachting brings,” says Vrit Yongsaku, Group Managing Director of Boat Lagoon Yachting, one of Asia’s largest yacht importation, and distribution centers. “As their experience grows, the trend also moves, towards the bigger yachts [from 60ft to 130ft].
This trend, toward bigger and bigger yachts, has led to what has been described as a “superyacht boom,” in the Asian market, not only in the purchase of these fabulous luxury motor yachts, but in an ever increasing demand for superyacht charters. Another recent report, this one created by Transparency Market Research (TMR), suggests that the yacht charter industry in particular, is poised for significant growth between 2017 and 2025. The report states that much of this growth is coming from the Asia-Pacific Regions. According to the report, “The market in the region is receiving a major boost from the rising number of charter destinations, increasing wealth of people, and greater availability of yachts. Thailand, Australia, Singapore, and Malaysia are some of the popular yacht chartering destinations in Asia Pacific. The market in Asia Pacific is slated to expand at an 8.0% Annual Growth Rate from 2017 to 2025.”
Commenting on the TMR Report, Scott Walker, co-founder of Asia Pacific Superyachts and director of Asia Pacific Superyachts Singapore, said, “Asia Pacific is considered a lucrative market that will likely outshine all others in terms of growth rate.”
Will this rapid and expanding growth in the Asian-Pacific spread to other, perhaps better known yachting regions in close proximity, such as Australia and/or New Zealand?
According to British real estate mogul, Richard Pope, the answer is “yes.” Speaking to the Australian Financial Review, from the recent “Superyacht Rendezvous,” a three-day event held at his own Kata Rocks Resort, in Phuket, Thailand, Pope said, “The superyacht world has traditionally been about the whole Mediterranean and the Caribbean thing. We created this event last year to encourage more superyachts to come down from the Med and spend a few months in Asia, then go onto Australia – it has great potential for Australia as many of the yachts will continue down your way.”
CEO of Queensland’s Gold Coast City Marina, Trenton Gay, was so impressed when he visited the inaugural Kata Rocks Rendezvous last year, he created a similar annual event on the Gold Coast this year.
“We are right behind what you’re doing in Thailand, because we know that once the big boats start coming here, they will also carry on down to Australia and New Zealand,” Mr. Gay has said. “Down Under, we too have hundreds of miles of beautiful cruising grounds, and we also have phenomenal first class refit and repair facilities.”
What Is Driving the Asian Yacht Market?
On the one hand, the economy is driving the boom in the Asian yacht industry. While shipyards in the states continue to flounder, and are seeing a significant number of closings and acquisitions, their Asian counterparts thrive simply because their costs of operation are so much lower. But, the industry is being driven by more than just the economy. For one thing there is a growing number of high net worth expats moving into the region, and taking to the water. Furthermore, South East Asian destinations continue to flourish, as Asia is slowly realizing its full potential with the market experiencing a healthy level of demand for yacht charters, as clients look for an exciting alternative to the Caribbean.
Beyond all that, over the last few years, there has simply been a change in attitude toward boating in the region that is picking up steam. We see people beginning to move away from the purchase of smaller boats and lower quality production yachts, and becoming more interested in custom built and higher quality luxury yachts and superyachts. There is a growing understanding of pleasure yachting in the area.
While much of that change in perspective is being driven by emerging wealth in China, it also has much to do with what the region has to offer as a yachting destination.
Southeast Asia abounds with islands known for their exotic beauty, which are also a source for some of the best SCUBA diving and sport fishing in the world. That is creating major opportunities for charter yacht businesses. A recent report by the World Travel and Tourism Council said that Southeast Asia is expected to be the fastest growing global sub-region over the next decade.
Not All Smooth Sailing
Despite steady and predicted growth, there are still many issues in Southeast Asia that stand in the way of the region achieving its full potential as a motor yacht hub — infrastructure and lack of marinas are two of the biggest issues. However, this is steadily improving, together with governmental support of many countries, particularly Indonesia, Singapore, Malaysia and Thailand.
While the Asian market continues to grow, still, Yongsaku is quick to point out that there are significant differences between Asian motor yacht buyers, and their European or American counter parts. “Chinese ultra-high-net-worth 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 superyachts, 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.”
Taiwan Continues to Set the Example
Much of the growth in the southern regions of Asia, began with their more notherly neighbor, Taiwan. What started in Hong Kong and Taiwan is now spreading throughout the region, yet Taiwanese shipbuilders continue to set the bar for carving out new markets, and how to become more competitive with the West. On a recent trip to the region, we have seen firsthand how the quality of these Taiwanese boats continue to not only improve, but evolve to meet the needs and desires of today’s yacht buyers.
Moving ahead, I anticipate Asian yachts, such as those currently being built by Horizon Yachts, Dyna Yachts and President Yachts to continue to take on a leading role in the 70 – 140ft range.
It’s not always easy to stay on top of what’s new in motor yachts. If you would like to benefit from our expertise in these areas, or if you have any questions or comments about this blog post, do not hesitate to contact our Sales Specialists, or call us at 954-900-9988.