Yachts last forever. Or at least that's what their builders and dealers would have us believe. At a time when all kinds of luxuries are being shunned by the larger market, this could be the boating aficionado's golden opportunity to nab a bargain or two, they are saying.
"It's a buyers market now and currently there are very interesting price ranges, which are different from when demand was high," says Erwin Bamps, the executive manager of Gulf Craft Inc, an Umm Al Quwain-based yacht builder.
"Luxury remains an essential need for some people, as a reflection of their success and for businesses to profile themselves as successful. So the desire for those basic needs have not diminished. That's why there are people still willing to buy boats and other luxury products."
Gulf Craft Inc recently organised its first Arabian Luxury Yachting in Dubai, a showcase of the company's latest offerings.
While the size of the leisure marine industry in the region remains difficult to gauge, Wael Juju, the CEO of Knotika Holding, organisers of the recently concluded The Emirates Boat Show International, says his company estimates that there are more than 60,000 boats in the Middle East dedicated to leisure boating alone.
"The GCC is the fastest growing marine market in the world by a wide margin. It is one of the only markets left in the world today that is still showing positive growth," he says.
Juju, whose company also owns and manages the Abu Dhabi, Bahrain, Kuwait and Jeddah boat shows, says the US continues to be the biggest marine market in the world. "There are over 17 million registered vessels in the US and this market is valued at $40billion (Dh146bn) per annum," he says.
According to Mike Derrett, owner of a UK-based consultancy firm for the marine industry, the region's massive marina developments will ensure its status as the new focal point of the world.
"There are more than 100 ongoing property projects with marinas attached in the GCC and they will continue to bring people in," he says. "And there are about 50 to 80 boat manufacturers, some capable of building world-class super yachts. So you can imagine the scale."
Both Bamps and Juju have no doubt the yachting market in the region will ride out the global economic gloom.
"If major marina construction works are delayed, it will naturally have an effect on the growth prospects of the industry," says Juju.
"But it is important to note that boating is a passion and boaters will continue to partake in this activity through good and bad times."
Gulf Craft Inc's Bamps agrees. "People don't buy boats like coffee," he says. "It's for the long term and our clients know they do not depreciate. Even in times like these, they know it is important to profile yourself as still strong, still standing."
How to buy your dream yacht
No minimum quality
The first thing to realise is there is no international standard, says Erwin Bamps. "If you're buying a car, you can't really buy a bad car these days. Every car on the market now meets minimum quality standards. It's the opposite in the yacht industry," he says. "It's self regulating so someone who's just getting into yatching needs to know whom to trust. Ask for product quality, delivery time and check the seller's ability to understand your requirements. Seek referrals, check with friends and colleagues. Just like an investment consultant, your peer's experience is essential."
What's your budget?
"Determine what you want before you set out," says Bamps. "Do you want a small boat that you can take around like a trailer or do you want a super yacht that almost never docks, with a helipad? We have boats that start at $14,000 (Dh51,000) to super yachts that cost $30million."
Functionality and utility
"Decide what you would like to do with it. Do you want to take your family out on a regular basis or entertain friends? Is it just for fishing? How far offshore do you wish to go? Is it more of a status symbol? Where do you want to keep the boat? Knowing the exact function of your boat will help you make a quicker decision. Then there is the utility. Are you going to drive it yourself? Do you need crew? On bigger yachts, it's a whole different management issue. There are cooks, nannies, mechanics, captains and stewards to be hired. There are companies that will outsource crews to maintain the generators and ensure cleanliness etc."
After sales service
"French car sales in the Gulf for example, are relatively low because of lack of proper representation. Most of our sales are also due to our extensive dealer network," says Bamps. "Find out which brand is properly represented in the country you wish to keep the boat in."
Financing
Boat financing in the last six months has become a bit of a problem thanks to the global financial situation, with boat sales particularly in the US having been hard hit, says the executive of Gulf Craft Inc. "Banks such as HSBC offer various options," he says. "But the UAE is a cash-rich economy and of the 20 boats sold in the Gulf in the past year, only two have asked for financing."
Long term investment
The difference between ships and a yachts is that ships are specifically built for their functionality while yachts are for luxury, says Bamps. So it will help to know whether you want one for investment purposes or purely for leisure. "Most of the yachts appreciate in value because of their uniqueness. I recently found a yacht we sold for $7m going for $12m," he says.
"That's because they stand the test of time. And with proper maintenance can last 30-40 years. Like a luxury apartment, a yacht has an investment value. It's a bit like a limited-edition Ferrari."
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