While others in the region were partnering with subcontractors, Gulf Craft is currently celebrating 30 years of crafting boats from scratch. COO Erwin Bamps talks to GN Focus about the UAE-based brand's journey and how it sailed through the recession.
Congratulations on completing 30 years; tell us about the celebrations?
It's great to be 30 years young, and we're exceptionally proud to be a UAE-based international brand. We kick-started our celebrations in October and took our boats to Qatar, where we created a little boat show of our own. Last week, we hosted a private VIP preview of the superyacht Majesty 135, which debuted at the Dubai International Boat Show (DIBS) yesterday. Over the next few months we will take private shows to Australia, France, China and the rest of the GCC. We've also flown in clients from all over the world to celebrate with us. There's a lot of cake to cut!
What new boats are you unveiling at this year's boat show?
To start with, we have new superyacht concept designs to showcase this year. The Majesty 105 (30 metres) and the Majesty 135 (41 metres) reflect Gulf Craft's continuous investment in hull and interior designs to meet the demands of the international superyacht market. The headliner, our 2014 superyacht, will be much bigger than the 135, but unfortunately is a secret [at the time of doing this interview]. You'll have to visit us to see it first-hand!
What challenges has Gulf Craft weathered over the years; what lessons have you learnt from them?
Being a pioneer has been exhilarating, but a real challenge as well. We make our boats from scratch and had absolutely no help when we started. Today we've gained invaluable experience and continue to make all our components locally, with only a handful of elements (TV sets, radars, engines, granite for interiors) sourced internationally. Another challenge was marketing ourselves as a ‘made in UAE' product. When you consider boats from other parts of the world, each manufacturer stands for something — Germany for engineering, Italy for style, France for lifestyle and Japan for reliability — but what did we stand for? We set about peeling back the layers and the government helped us with their destination campaigns and people slowly began to become more aware of the UAE and its growing importance. We leverage this extensively today for our brand. The third challenge is defining the sector's growth; it continues to grow fast and there is much more to be done. To put things in perspective, there are 13 million boats in the US alone — and 45,000 in the Gulf! The sector needs to be streamlined, from legislation to developing home-grown partners and a support framework. It takes time and a lot of effort, but we'll get there.
The UAE is now a force to be reckoned with in boat design, but why don't people know this outside the sector?
The UAE has a sea-faring legacy, yes, but as a marine business it is still nascent. If you look back the place to park boats was limited to the Golf Club and the Dubai Sailing Club. Today we have the Dubai Marina and the Palm Jumeirah. We've experienced amazing growth in the last three years, the region continues to develop its infrastructure and its knowledge base with great strides being made in terms of marine infrastructure development. Ironically, 70 per cent of the planet is water and yet our industry continues to be ‘niche'. This is an industry waiting to be found, and so needs to really hone its positioning and address new buyers.
Following the recession, the yacht industry was one of the hardest hit. Has the industry recovered?
When the economic downturn took effect super-luxury items were the first to be discarded. The issue was not about affordability; boating simply became a symbol for excessive luxury. The entire industry experienced a 70 per cent drop in business; financing was low and so a lot of boat companies automatically turned inward to address their financial issues.
Gulf Craft wasn't affected simply because we had no loans. We used the recession to invest in our business, focusing on improving our product and our customer service. We started to build the first Majesty 135 in 2008; it takes two to three years to build a boat, but we sold the 135 off-plan six months into design. For the rich, the recession was the best time to buy! We were able to increase our market value, keep our existing prices, but added value with semi-custom design options we didn't offer before.
The market is definitely seeing a recovery with an average of 20 per cent growth experienced by companies that invest in their business. While the cost of luxury items has dropped, we've never sold as many boats as we have in the past three years.
Have your growth numbers fared well between 2011 and 2012?
While we don't have numbers to share at the moment, in terms of dollar figures we've fared quite well. Our super-yacht division has doubled in size, while our 50 to 80 feet boats are selling a little lower in comparison. Interestingly our smaller boats of up to 45 feet are doing very well.
What growth do you expect in 2012? Is this in line with industry expectations?
We have been in the industry for 30 years, and based on the last three years of growth, we believe we're going to grow more. The world economy is slowly recovering, and as we slowly move along with it, our market share is increasing. In the Middle East, we're at 25 per cent and are looking to increase that between 5 to 10 points in the next couple of years.
What are the biggest challenges facing the industry today; how can they be resolved?
You'll be surprised if I told you one of the industry's biggest challenge is the people who are still afraid of water! Another would have to be battling the myth that boating is expensive — it isn't! Our boats sell from Dh120,000 up to Dh1 million and the maintenance cost is usually 10 per cent of the initial buying value per annum. Not everyone really understands how boating can elevate one's lifestyle; it is as good as investing in a floating property and is a legacy product.
What is Gulf Craft's biggest sale ever?
Our largest sale so far has been both of our Majesty 135 boats, which sold off-plan for $17 million each (about Dh62 million).
From helipads to on-board elevators — take us through some features the rich look for to set their yachts apart?
The most popular requests are always technology-driven or about taking the interiors to the next level. The Majesty 135's hull has been painted gold, and in 2002, we built a yacht that can fold 90 degree under water. Starry skylights to mimic the night sky are another firm favourite. While we try to accommodate all requests, we do not compromise on safety or performance of the vessel.
