An Amazing ASEAN Opportunity
Martin H. Redmayne discusses the Asian superyacht market and outlines some of the positives to come out of the Singapore Yacht Show 2016, as well as exploring the key strategic areas of improvement still required.…
If you consider the thousands of small undiscovered islands of Malaysia, Thailand and Indonesia, and add into the mix the proximity of Australia at the very end of the Indonesian archipelago, you have some of the most amazing opportunities in the world for superyacht cruising.
Having listened to the various interested parties during the two days of the Asia Pacific Yachting Forum and talking to many of the key exhibitors at the Singapore Yacht Show, it is hard to imagine this region not becoming vital for the future of our industry. Quite when the region will reach maturity in terms of its yachting prowess is anyone's guess, but it is clear to me that one day it will become as important as the Med and maybe more important than the Caribbean.
This territory is both virgin and exciting, privacy and remoteness will become its calling cards and the sheer volume of wealth and client potential is incredible. However, there is an urgent need to create the right infrastructure.
Martin H. Redmayne speaks at the Singapore Yacht Show (Credit: Blueiprod)
During the conference, the Indonesian Deputy Minister suggested that the Government had pledged to work hard on making these incredible islands a focus of marine tourism and yachting, suggesting that they are making it easier to arrive and cruise, as well as encouraging external investment to build several marinas across the territory. The caveat however from Bill Green of Camper & Nicholsons Marinas, is not to go too fast and without a joined up master plan, marinas need to be the right size, scalable and in the right locations.
In addition to the need for marina infrastructure, there is also a lack of land based repair and maintenance services for visiting yachts in Asia, which is why Australia can play a huge role in joining up the dots. There are of course one or two yards that offer maintenance facilities, but with very limited yachting experience. Unfortunately it only takes one or two regional yards to conduct repair work of a low standard and suddenly the whole Asian market becomes labelled unfit for purpose.
Opening Ceremony (Credit: Blueiprod)
I often wonder if the governments in the region will ever speak to each other and create a strategic master plan as some were suggesting. The new ASEAN Economic Community (AEC) project, the concept of creating an EU style parliament, is a fascinating venture and one that, in an ideal world, may go someway towards remedying issues of policy. But, passing policy decisions on cruising and tax across multi jurisdictional regions made up of thousands of islands and regional governments seems like a bureaucratic nightmare.
It is conceivable that the 10 countries involved in the AEC do in fact have one joined up mission, but they still have a long way to go. However, if it gathers real momentum, I think this collective could make a serious contribution to the yachting master-plan - provided the right governments, associations and interested parties can sit down, discuss and agree.
The Singapore Yacht Show (Credit: Blueiprod)
The caveat is the fact that the nations of the ASEAN community still recognise the sea as a food source and means of transport and rarely understand yachting as a leisure activity. There are individuals like Mike Simpson of Simpson Marine who has made Asia their business for the past few decades. Simpson suggested that in the next decade we could see the emergence of the yachting lifestyle, with every social class seeing the value of messing about on boats.
The counter argument is that governments still see yachting as the domain of the rich and, while corruption and other wealth related issues are in the media, governments are relatively cautious about being seen to endorse a pastime that is considered to be the remit of the wealthy. In fact, as Mike Simpson suggested, many Chinese clients have decided to adopt the Mediterranean lifestyle and cruise or own in Europe - away from the eyes of their domestic authorities.
My little theory is that two things could be on the horizon. Firstly, exposure to the yachting lifestyle will primarily start in Europe and the global Asian clients will use the Med as their new holiday home, but as the Med gets more and more congested and yachts decide to explore or discover new grounds. Secondly, the bored owners and crew of the typical market may choose to venture further afield and benefit from the privacy and secrecy of these pristine waters.
Captivated delegates at the Singapore Yacht Show (Credit: Blueiprod)
It may not be measured in hundreds, but even if the number of large yachts grew from 70 to 140 in the space of the next 3 years, the region will benefit from 100 per cent growth in all areas and the bigger fleet will expose more of the regions wealth to yachting on their door step.
In addition to infrastructure and marinas, there are one or two other agenda items coming out of this week in Singapore. Firstly, the regions waters may appear pristine in all of the promo videos from the tourism bodies, but early reports from Captains who have visited suggest that in many areas, the trash and flotsam that litters the region is a major problem and will need some serious strategy to help clean up.
The concept of marketing and exhibiting to the market needs some joined up thinking. Over the years there have been yacht shows and events popping up everywhere, coupled with magazines galore, all promising the holy grail of virgin owners and potential clients. It is worth noting that some one like Benetti who has been in the market for many years, coupled with brands like Princess or San Lorenzo, all have limited production, measured in tens of units per annum coming to the region. The risk is that the media and show organisers all see this gold mine as an opportunity, however my advice is that we only focus on one or two key outlets in order to create a manageable and mature market.
A boutique show like Singapore is a good concept and one that we plan to support for the future. Luxury location, good infrastructure and easy access from all regions, including Europe and the Gulf. If anyone wanted to get some exposure to the Asian Opportunity, then this show has the potential to deliver it all. A Cafe Society style marina with excellent lifestyle, enough space to house a good cross section of yachts and toys and a proximity to one of the most powerful financial districts in the region and a short hop to some cool islands of Malaysia and Indonesia.
My instinct suggests that in a few years this show will remain and many of the others will evaporate. We have seen the show debacle of China over the years and we need the market to consolidate and control the outlets, so no one wastes money on unwanted events. We only need a few hundred wealthy clients from this vast region to fall in love with the lifestyle and the market will mature at the right pace. Don't expect everyone to love yachting, but let's make sure that when they do we have all of the dots joined up, specifically Tax, Charter, Government, Marinas, Service Yards, Visa Issues and Cruising grounds.
This region is very special and it will take time, but I am confident that it will become a fabulous opportunity with billions of dollars contributed in local revenues and infrastructure. Let's not make the same mistakes as other emerging regions with over investment in marinas or a lack of joined up thinking. ASEAN yachting will be big, one day.
Click here to become part of The Superyacht Group community, and join us in our mission to make this industry accessible to all, and prosperous for the long-term. We are offering access to the superyacht industry’s most comprehensive and longstanding archive of business-critical information, as well as a comprehensive, real-time superyacht fleet database, for just £10 per month, because we are One Industry with One Mission. Sign up here.