Dubai
What do millennials and ultra-high net worth individuals (UHNWI) from the Asia-Pacific region have in common? Not much, but a dislike for yachts seems to be one of their shared disinterests and its causing some concerns among boat makers.
“The Asia region has the lowest propensity to buy yachts,” Farouk Nefzi told Gulf News at the Dubai International Boat Show on Tuesday. While “millennials have undergone a change of attitude in terms of ownership.” Nefzi is the marketing and brand director of Feadship, a major Dutch shipyard.
This presents a problem for yacht manufacturers, who have seen the Asia-Pacific region bloom in the number of wealthy individuals who can afford yachts, while the appetite for yachts has remained flat.
As a result, “the number of deliveries is down, and the sales of superyachts is not growing as fast as the growth in UHNWI, at 6 per cent a year,” Nefzi said.
Conversely, the Middle East has the highest propensity to buy a yacht of all regions globally, even greater than the US, and Europe, according to Feadship.
“The Middle East has always been keen on buying and spending time on the water. When wealth came to the first generations [of the Gulf countries], they were out there [purchasing yachts] to give special gifts to their families,” Nefzi said.
That first generation had different motivations to buy yachts, he said, whereas the newer generations had been education abroad so have “different tastes and so on.”
But the purchasing power hasn’t changed, Nefzi added.
He continued: “And it’s not traditional locals buying yachts here. Indians, Pakistanis, Chinese, they’re all buying yachts here in the Gulf.”
Regarding sales in the region, he added: “It’s a good market at the moment in the Middle East. There’s lots of interest for Feadship.”
Nefzi says that Feadship has the best order book in its history, despite the dwindling numbers of people buying yachts.
Yacht manufacturers are still witnessing a downward trend in sales, which began in 2008. That markets the end of a buying frenzy that began in 2004.
“It was the best time ever,” Nefzi said.
“The market [for superyachts], has been declining since 2008. It’s gone down since then,” Nefzi said, adding that despite this, demand was still strong for the top shipyards.
Other trends that have impacted the sales of yachts include the current global geopolitical situation, the preference of wealthy individuals to spend their money on charitable causes, and concerns over the boats’ impact on the environment, Farouk Nefzi told Gulf News on Tuesday at the Dubai International Boat Show.
Currently, the top 10 yards do around 60 per cent of the work, according to Nefzi, leaving a “lot of room for a leadership opportunity in this industry.”
Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates airline and Group, officially opened the 26th edition of the event, held from February 27 to March 3 at the Dubai Canal.
