Business | Shipping

55,000 new berths to boost leisure boat market

There are an estimated 46,000 yachts in GCC worth $4 billion

  • By Deena Kamel Yousef, Staff Reporter
  • Published: 00:00 March 14, 2012
  • Gulf News

  • Image Credit: Oliver Clarke/ Gulf News
  • Shaikh Majid Bin Mohammad Bin Rashid Al Maktoum, Chairman of Dubai Culture, tours the 2012 Dubai International Boat Show held on Tuesday, along with Saeed Hareb, managing director of Dubai International Marine Club.
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Dubai: The Arab marine industry is calling for the easier sailing of leisure boats from one Arab country to another, but security issues in the Gulf and slow paperwork are preventing smooth sailing, a senior industry representative said.

"Our aim is to facilitate how to move a boat from one part to another. This will change the demand needed to make this industry grow faster. We have some restrictions. We understand that security-wise, the Gulf area and what is going on has affected that," said Mohammad Shamaa, President of the Arab Marine Industry Association (AMIA), at the Dubai International Boat Show on Wednesday.

"Hopefully with more security in the region, we will be able to create this Arabian Gulf as a big lake and people can have the pleasure to go from one place to another with very easy paperwork like what we see in Europe. We hope for growth."

There are currently an estimated 46,000 pleasure boats in the GCC alone worth $4 billion (Dh14.6 billion) to $5 billion, according to Mike Derrett Marine, a market research firm.

Saeed Hareb, managing director of the Dubai International Marine Club and a consultant to the Dubai International Boat Show, said 55,000 berths are in various stages of planning and development that could be delivered in the next couple of years.

The stormy waters of the economic global recession have steered the regional boating industry into difficult territory, but demand from Europe and the Far East has compensated for some losses, according to industry insiders.

The slowdown has meant more available berths and a drop in rentals, they said.

"This is the worst crisis we have had in this business for some time. There were some crises before in the beginning of the 1990s, late 1970s and 2001, but nothing like what we have seen," Shamaa said. "The magnitude of the crisis is huge." Buying a luxury boat may be on the bucket list for some, but is not top priority for most. "People actually want first to eat and then to have clothes and then we come at the end of the list and we're the first to go when there is a problem," he said.

The proximity and growing demand of the Far East have provided relief for the regional industry. "The problems in the United States and Europe were somehow subsidised by reasonable demand to sustain the industry. The ones who reached the area before were able to take the orders."

Expected to double

With the industry set for some recovery now, the focus is turning towards Dubai and the UAE where the infrastructure is ready to accommodate the needs of the market, he added.

Demand in the Middle East and North Africa for marina berths is expected to more than double by 2015 to about 82,000 berths, according to a Booz & Company report. Developers in the region will have to invest $200 billion to $300 billion in the next 15 years to meet growing demand.

‘Historical opportunity'

"We believe for this region industry is the most important thing we need to develop because industry is the future and it's our way to acquire technologies and create our own philosophy in doing it," Shamaa said.

The local boat manufacturing industry should not depend on government support but rather the government should plan industrial strategies for the country, according to Mohammad Al Sha'ali, chairman of Gulf Craft, a UAE luxury yacht manufacturing company that recently celebrated its 30th anniversary. "Industry should not live on charity… It should make its money," he said.

"The UAE and GCC have to invest in industry. In 20 years they may not be able to, now is the historical opportunity. If they miss it, it won't come back again," he said.

Shaikh Majid Bin Mohammad Bin Rashid Al Maktoum, Chairman of Dubai Culture, opened the 20th edition of the Dubai International Boat Show on Wednesday.

It showcased 430 yachts valued at Dh960 million, according to the show organisers.

It also featured more than 20 super yachts, 33 regional launches and nine global premieres. This year 186 new exhibitors joined the show.

The Dubai International Boat Show 2012 will run until March 17 at the Dubai International Marine Club, Mina Seyahi.

Fittings demanded by the super-rich

Fancy a view of the marine life while you lounge in a jacuzzi aboard a luxury yacht? It will set you back about $30,000, according to the manufacturers.

The see-through jacuzzi fitted on the back of a 22-metre boat is just one of the off-beat requests from customers in the region, said Sultan Al Sha'ali, deputy Chairman and Chief Executive of AS Marine, an Ajman-based boat manufacturer. "You can see under you and all around... it's made of acrylic."

They have also made on-board interior design from exotic leathers of snake and alligator skin provided by the customer, he said. One customer asked for a customized spa with a treatment area and sauna.

Gold plating and fittings are also popular in the region, with customers also asking for marble fittings in the kitchens and bathrooms, he said. Others want to enjoy an art collection in their yacht, which is either provided by the company or the customer, Al Sha'ali said.

The company sells about 25 to 30 yachts a year, he added. The smaller 45-foot yachts go for about $500,000 (Dh1.83 million) while the mega-yachts measuring 135 feet cost $12 million.

Luxury at a price

Besides sailing into the sunset, buying a boat takes some serious financial commitment. Boat manufacturers and suppliers review the costs of buying, registration, maintenance, crew and insurance.

A 36-foot boat could cost $100,000 (Dh367,800) to $150,000. Maintenance and insurance eat up seven to ten per cent of the boat purchase value per year and hiring a skipper amounts to about Dh5,000 a month, according to marine consultant Mike Derrett. A super yacht measuring about 85 feet could be in the region of $4 million with the same ranges for insurance and maintenance.

A 38-foot luxury boat of Japanese make can cost Dh1.4 million as the yen increases in value, said Eqbal Al Yousuf, President of Al Yousuf Group.

The owner must register the boat with the coast guard, he said.

Docking the boat at a berth is another Dh30,000 a year and a captain's salary is about Dh6,000 a month, he added.

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