Insights & News

Marine Industry organisations and companies: Make sure that your board is correctly motivated | Dr Jouko Huju, GMBA – Finland

To begin with it is important to understand that above all a board membership means responsibility, not power. The board is the guardian of the organisation’s mission and it needs to make sure that the organisation lives up to its mission and appraises its performance. The board members should internalize the feeling of responsibility rather than that of power.

Motivation of people still happens through Pavlovian carrot-and stick incentives. 2500 years ago, the city of Athens gave its citizens a direct voice and an active role in civic governance. The city rose to an unprecedented political and economic power. The system succeeded in bringing individual initiative and common cause into harmony. Some may claim that the Athenian model does not provide a simple set of prescriptions for modern managers. It does, however, offer a window into how sizeable groups of people can successfully govern themselves with dignity and trust and without resorting into a stifling bureaucracy. Being able to contribute to the success of an organisation/company or a whole industry is seen as the most important reason for a board memberships.

The ethics of work motivation theory are important because motivational efforts can exert control over individual moral autonomy. Among other things, motivation usually involves the manipulation of values that motivate individuals to work for organizational ends. In other words, factors that individual workers regard as valuable need to be channelled or redirected to augment organizational productivity. The phenomenon behind high level of motivation is the sense of responsibility.

The ethical issue regarding the motivation for work concerns the moral status of the worker (board member). Is he or she an instrument for organizational ends and/or an end in himself or herself? On the former view, the worker’s values are important to management only insofar as they can be channelled in productive ways. For example, an individual who is driven by material wealth can be motivated to produce more of what the organization wants him or her to produce with pay-for-performance incentives, whereas another individual to whom recognition is important may be enticed when he or she is offered an impressive title and opportunities for greater managerial responsibility. On this view, the worker’s values are not important because they are individually valuable; they are important because they are organizationally valuable.

The concept of motivation is invariably linked with the notion of reinforcement or reward. It has been noted in the literature that rewards can come from sources external to the organisation as well as from within. The value and impact of variables like autonomy, satisfaction, the feeling of being in control, and making meaningful contributions, can all come from within, and may serve as powerful reinforcement or rewards for an individual, making him or her sustain the motivated level of work performance. Recognition is considered a reward which comes with successful contribution and active participation to the work.

Motivation can also come from the fact that board members receive an opportunity to serve an organization they believe in, a chance to learn new skills, an opportunity to be with people that share the same values, and the opportunity to forge strong personal and professional connections. In return, they offer the organisation their time, skills, knowledge, and commitment. Burnout and lack of direction, however, can lead to a lack of productivity, a misalignment of board actions and board member values, and general dissatisfaction on the board. For the health of the organisation, it is critical to create an environment that fosters and maintains a high level of board member motivation and accountability.

There are several strategies that can be used to maintain and even increase commitment and performance and thus increase motivation:

When building a board, align the interests and expectations of board members with the organization. Understand their interest and motivation in serving, and be sure that they understand the challenges and requirements of board service.
Show appreciation often, in both formal and informal ways. Recognition of board members encourages commitment and high-performance.
Involve board members in areas where they feel they can use their skills and knowledge and add real value. Make training opportunities available to increase their skills and knowledge.
Institute an annual board self-evaluation program that allows members to step back and reflect on their own performance as well as that of the group. This can provide feedback on performance and help develop corrective actions.
Develop individual accountability contracts. Use these contracts to determine strategies for holding board members accountable for attendance, contribution of expertise, willingness to make constructive comments during meetings, etc.

Just a few though to start a thinking process.

Dr Jouko Huju, GMBA Finland
Tel: +358 40 5509310
Email: jouko.huju@gmba.blue

Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA

Elitism is killing boating in Asia | YP Loke, GMBA – Singapore

In developing markets, early adopters to boating are typically the well-heeled. It’s no wonder then that in these countries, boating is promoted as a luxurious and exclusive lifestyle for the wealthy. The promotion of boating as an elitist activity is a worldwide phenomenon, but developing countries take it to the extreme.

From a marketeer’s perspective this positioning in the marketplace is what the customer wants. From a public relations perspective, this is disastrous. This elitist posture is ammunition in the hands of politicians pandering to the popular vote. There are many examples. One close to my home is Thailand, where boat tax was introduced soon after the 1997 Asian Financial Crisis (although the tax has since been repealed). Another is China, where a luxury tax has been introduced and is still in place. When capitalism replaced egalitarianism in China, it unleashed a pent-up demand for those who could afford it, to stand out from the crowd. Boats were sold as trophies for their owners to show that they were the alpha players in the new social order. This conspicuous display of ostentatious wealth highlighted the wealth gap and was clearly unacceptable to government.

Even World Sailing acknowledges the dangers that elitism poses. It started life as the International Yacht Racing Union (IYRU). Changing with the times, it rebranded itself as the International Sailing Federation (ISAF) in 1996. Then in 2005 it had another makeover and re-morphed as World Sailing. With each transformation, the association had repositioned itself to be more inclusive to represent the broader base of sailing rather than just the elite sports aspect. In doing so, it acknowledged that if the broad public appeal and participative base in sailing diminishes, sailing as an Olympic sport could eventually be side-lined in favour of other competing sports gaining popularity.

The issue – the perception that boating benefits only the few – is prevalent not only in new markets. In developed countries, where the waterfront is invariably a scarce resource with multiple stakeholders, marinas often have the perception of being exclusive, limiting public access to the waterfront. Locals often have a say in how their town develops, and if misinformed about the benefits of boating to the community, vote down marina developments at town hall meetings.

What can the boating industry do to help themselves combat the negative public perception of boating?

Firstly, waterfronts should not be totally exclusive. The right of public access to the shoreline is legally enshrined in most countries (The Public Trust Doctrine), but in developing countries it is not always enforced. Public access to the waterfront, with views of boats in marinas, help mitigate the perception of exclusivity. Club buildings can be private without impinging on the right of public waterfront access.

Clubs can introduce public participation programs and introduce sailing to schools, support local youth groups, and work with volunteer organisations to bring under-privileged or physically challenged groups sailing. Sailability, a sailing program for the physically challenged, is organised worldwide. Marinas and yacht clubs need to make the effort to be part of the local community. A positive public image does not come automatically – it needs to be nurtured.

To promote industry outreach and engage government, industry needs to get organised. It takes collective effort to organise a voice for industry, which governments take seriously. Individual companies battling alone are a lost voice in the wilderness. In Asia, few countries have marine industry associations (only Hong Kong, Japan, Singapore, Sri Lanka, Taiwan and Thailand and are full ICOMIA members).

To be sustainable and to engage government effectively, boating needs to be branded as an affordable healthy outdoor activity for the whole family. This is especially so in markets where boating is sold as a luxurious lifestyle few can afford. Governments need convincing that boating development does not run counter to the egalitarian ideals it is expected to uphold.

YP Loke, GMBA Singapore
Tel: +65 9736 1819
Email: yp.loke@gmba.blue

Sustainability – the real story | David Lewin, GMBA – United Kingdom

Our world is facing two existential crises at present. The first immediate concern is to prevent further global warming and to do that we have to cut down on ‘greenhouse’ gases – fast. That means reducing the liberation of stored carbon in the form of carbon dioxide from fossil fuels and the even greater threat from other hydrocarbons such as methane and the chlorofluorocarbons.

The rush to electrification is therefore welcome but only if that electricity is produced with zero emissions. Batteries and their associated electronics use a lot of rare metals and energy to produce so unless it can be proved that that energy has been produced emission free over a sufficient period to provide a payback, the move to electrification is pointless.

Of course there are other emission free energy sources such as hydrogen which in many ways makes a lot more sense than electrification. Many would argue that in the time available to save the planet from catastrophic warming we don’t have time to install enough charging points and create enough infrastructure as well as build and sell the vehicles. We have been building internal combustion engines for 150 years and their use is ubiquitous. Taking everything into consideration, it would be a lot more cost effective if we could convert them to run on hydrogen even although it requires electricity to produce. A hydrogen infrastructure would also promote and sustain the use of fuel cells.

Of course when thinking about emissions we tend only to think about what comes out of the exhaust pipe of an engine and thankfully we see much less now of people starting up their boat engines with clouds of black smoke. However if you are a boat manufacturer or refit yard, what about the volatile organic compounds (VOCs) being released from moulding, glueing and painting in the workshop? Are we fitting air filtration systems to our factories? Most of these compounds are ‘super-insulators’ and score double points against CO2 in terms of global warming!

A production process can only be said to be sustainable when it is economically sound, emission free (with or without treatment) and has no negative environmental impact on the surrounding area and population.

It is often said that we come into this world with nothing and that we should go out with nothing. By that we should not leave behind something that will negatively impact the planet. So, if by chance we should be regarded, by current thinking, as successful and amass enough wealth to buy and run a boat, in theory it should not create greenhouse gases in its manufacture or in its running and all parts should be capable of being reused and returned to their natural state. Only that way can the world be sustained. It would be interesting for our industry to reflect on the products they produce, maintain, store or park as to how close they currently come to that theoretical norm. Not very close I would suggest.

Sustainability therefore is an all-encompassing state of mind. If we are producers, then how is our factory powered, heated and operated? Are we minimising VOC emissions? What powers our forklift trucks and any other equipment? Banning plastic drinking straws and charging for plastic bags may all be very admirable but cleaning up our industrial infrastructure would be a major advance and one we often overlook.

As an example, Baltic Yachts in Finland has been working for some time on reducing its environmental impact. As a low volume builder of high quality large sailing yachts in a very cold country, it might be thought that controlling waste and emissions from heating might be difficult but it is forging its way to a zero emission future.

All the electricity used in the production facilities is locally produced, sourced from nearby windfarms or hydropower, fossil fuels for heating the production facilities have been replaced by organic, pellet-fuelled furnaces as well as reducing energy consumption throughout the operation to reduce the environmental impact even further. Since 2017, they have been tracking production-related waste, reducing unsorted waste to zero, and waste produced per labour hour by more than 10%.

They have even started a project to improve the impact of their labour force travelling to work with an environmentally-geared ‘mileage race’ – where all commutes to and from work by bicycle are logged. This is then converted to CO2 equivalents saved. To help promote this initiative, there is a friendly competition with other companies in the region. In addition to being good for the environment, it helps the staff stay physically fit!

And then to the product. Can, or should we still be producing boats and equipment that can’t be recycled? Is old-fashioned GRP still acceptable or should we now only be using bio-resins with natural fibre reinforcement? Just think of all those hulks in the back of boatyards and on foreshores that will not break down like the wooden hulls of old. They will be a blight for a long time to come.

Take Baltic Yachts again. Most production tooling is made from organic and recyclable materials as is the move to organic build materials such as flax and bio resins. Producing sailing yachts also brings the possibility of building zero emission boats with electric drives and solar and hydro-regeneration.

As we’ve discussed earlier it’s great to see technology being advanced through the use of electric power but is it so ‘green’ when that motor and its batteries are little used – as on inland waters or as auxiliary power, yet the boat is made of non-recyclable elements and the energy expended, VOCs released and rare metals shipped from around the world greatly overwhelm any idea of eco-friendliness.

It is for that reason it is often said in the automotive trade that the most environmentally friendly car is the one you currently drive! Perhaps the same could be said for boats and with companies like Setag Yachts, you can have your boat refurbished and restyled without having to build a new hull, superstructure and the basic engineering – a considerable saving in money and resources.

Reducing the environmental impact also starts with design. Because marina fees have traditionally been based on overall length, boats have become ever wider with chines for more buoyancy outboard and fuller bows for larger fore-cabins. These boats then require more power to make them go faster. If parking your boat was based on displacement or a formula based on length times beam we might see the development of boats like Clara Belle, a Nigel Irens design, built in ‘renewable’ cedar strip construction – long and thin, easily driven and now recently converted to having an electric pod drive built into the rudder.

Have motor boaters ever considered that it might be nice to travel at 12 knots again? To my mind it is generally the most comfortable speed and one where it is still possible to hold a conversation and not be overwhelmed by the noise of the engine. With the right hull design, as in Nigel’s LDL (Low Displacement/Length ratio) series, it is also a speed easily attainable in displacement mode. This means that no extra energy has been used to drive the hull over the ‘hump’ and on to the plane – the power curve required is linear so the amount of fuel used is directly related to speed, rather than pushing a wall of water as does a planing hull at low speed. These designs again lend themselves to low energy density / high torque propulsion systems such as electric.

Nigel’s latest project is an 8m ‘LDL’ plywood launch suitable for electric propulsion but rather than construct it locally, he is supplying a total list of the requisite hardware plus a CNC programme to cut out all of the 800 parts so that plywood and labour can be sourced close to wherever the boat is being built in the world for a much lighter environmental footprint.

I have spent 40 years in the leisure boating industry and enjoyed all of it. Some of the best times have been spent simply cruising with family and friends and I still enjoy getting together to race a sailboat with the ‘boys’ but we must always remember, the products we produce are not essential. No-one needs a leisure boat. Life will go on without them however much our life experience would be the poorer so from that base it is imperative that we clean up our act. We can’t leave a message for future generations that we are sorry that we left the world in such a mess but that was the only way open to us as people needed boats for their own gratification.

So let’s start thinking ‘cradle to grave’. We have no excuse. Bolting on some solar panels, banning the odd hazardous substance and installing an electric motor are all very admirable but done in isolation is simply ‘greenwash’. Banning plastic water bottles and installing ‘drinking points’ at exhibitions should be a matter of course, not used as an example of eco credentials

We must start now. The good news is that a lot of work has already been done to produce checklists and advice in how to achieve these sustainable aims. Walk into your business tomorrow and start looking around you and the building and then your product or service. Will you be able to leave a note for your great grandchildren to say you no longer contributed to the planet’s degradation?

David Lewin, GMBA UK
Tel: +44 7767 687 987
Email: david.lewin@gmba.blue

Tailwind in the Swedish Boating Market | Björn Ingemanson, GMBA – Sweden

Even though fuel prices are sky-rocketing we have seen an all-time high in the boat market in Sweden. It all started during the first summer of the pandemic when it was impossible to travel abroad for vacation. Instead many Swedes started to buy boats, both new and used, and much more time was spent on the water. The boat dealers and the manufacturers were more or less sold out and many buyers had to wait up to 12 months before their boat was delivered.

Sweden is besides Norway and New Zealand the country in the world with the highest number of boats per capita. It is estimated that the total number of leisure boats are around one million and every year 25 000 new boats are sold. The majority of the new boats are smaller boats with engines between 10 to 300 hp. The value of the total market is around 600 million Euro and during the pandemic the increase was estimated to around 30%.

One trend the last couple of years is that more buyers are looking for boats where the family can stay overnight which means that the average size of boat is increasing. We have also seen that the boating season has been longer compared to previous years. Nowadays, it is not only June and July that is popular, but families are also out boating in August.

The question is how long this strong market will continue given the high inflation, increasing fuel prices and interest rates? According to people that attended the latest Boat Shows, the number of visitors are still high and the exhibitors are reporting strong sales. My judgement is that we are coming closer to a more normal boat market and that we will see a decline in sales of new boats the coming years.

However, the trend to spend more time on the water will remain!

Björn Ingemanson, GMBA Sweden
Tel: +46 70 675 65 20
Email: bjorn.ingemanson@gmba.blue

Interview – Meet the Team | YP Loke, GMBA – Singapore

YP Loke, GMBA Singapore, was one of the founding members of GMBA. YP has extensive experience in marina management and is a member of the ICOMIA Marinas Group, serving as an ICOMIA vice-president until recently. He is an honorary member of the Hong Kong based Asia-Pacific Superyacht Association (APSA). On the recreational front YP is Vice-President on the General Committee of Raffles Marina, Singapore.

You are an avid sailor and sail regularly. How did you first get involved in the sport of it? Or were you involved in the industry and your love grew from there?

My family owned a small shipyard along the banks of the Kallang River in Singapore. My brothers and I grew up wandering around the yard and around ships. My interest in ships led me to study naval architecture in the UK. On return, I started my career on the commercial side with my first job at a local company, Keppel Shipyard.

In 1991 I learnt that Raffles Marina was being developed – then the first marina in Southeast Asia. I was employed as the opening general manager. I left Raffles Marina in 1998 to set up my own consulting company, Spinnaker International, mainly working in developing countries to set up marinas and boating facilities.

I had learnt to sail dinghies from my days in school, and at Raffles Marina I sailed with members. I co-owned a Hobie 16 when I was younger. I now have a Hanse 588 which I bought about a year ago when Covid restrictions were still in place (yes, one of the many who bought a boat during Covid!). With border closed I could only use the boat in local waters, which is congested as Singapore is a busy port. I only took the boat out of Singapore for the first time in September, to Tioman, a Malaysian island in the South China Sea. I’m planning to sail to Phuket at the end of the year.

What was the most interesting position you have ever held? What made the job so interesting?

Running my own company was the most interesting. It was a risky decision coming out of the Asian Financial Crisis, but timing turned out to be right as boating soon started in the Middle East & East Asia including China. My focused has been on emerging and developing boating markets where boats are used differently, and customer behaviour is different from developed boating markets. My work takes me to many to places I would not otherwise visit. Luckily marinas are always located at pleasant locations (unlike commercial shipyards which are usually in the worst part of town), and I often take a few days off from work to be a tourist.

Marinas in emerging markets are often the first part of the pipeline delivering the boating experience. In such cases, I end up advising not just the developer, but get involved in discussions to build up the supporting ecosystem to enable boaters to enjoy boating. This part is sometimes pro bono, but I find it the most interesting and fulfilling part.

How has yachting changed in Singapore over the last 30 years?

Prior to Raffles Marina’s opening some 30 years ago, boating facilities in Singapore were very basic – boat owners kept their boats on trailers in makeshift ‘boatels’ and launched them off the beach. The operation was tide dependent and environmentally unfriendly. After Raffles Marina came a slew of other marinas – among them One15 Marina Club, Marina at Keppel Bay, Republic of Singapore Yacht Club, Marina Country Club, Singapore Armed Forces Yacht Club and Changi Sailing Club. The latter has a mooring field instead of a walk-on/walk-off marina. Being a congested port, boating in Singapore is highly regulated. Both boats and skippers are licensed. We continuously engage the authorities to ensure regulations are as user friendly as they can be in a busy port.

And what are your predictions for the next 30 years?

Marina occupancy has been increasing, and the community is engaging the authorities to make new marina sites available. There are many competing users vying for Singapore’s waterfront. Ensuring new marinas are commercially viable will be challenging. Luckily, access to the cruising hinterland (Indonesia, Malaysia & Thailand) is not too difficult. We continue to work with our authorities and overseas partners to ease the burden & complexity of cross-border procedures.

You are one of the founding members of the Asia Pacific Superyacht Association and played a critical role in the destination marketing of the region. What was the single biggest challenge in setting up the Association?

APSA’s objective is to promote the Asia-Pacific as a single cruising destination, in the same way that the Mediterranean and Caribbean are perceived. There were some successes. The setbacks were mainly the economic and pandemic disruptions that had to be navigated and were beyond our control. I can think of the Asian Financial Crisis in 1997, the Global Financial Crisis 2008, the SARS outbreak and of course Covid-19. The setbacks caused by these global disruptions affect not just us but every business sector. But with every upturn, we have consolidated our gains. The opening of Indonesia for cruising was a major draw for superyachts. Indonesia is an archipelago with 16,000 islands and unparalleled marine biodiversity. Much of Darwin’s work on the theory of natural selection was based on observations in Indonesia.

What do you perceive as the biggest threat to the larger industry in the region at present?

Boating is promoted as an exclusive and luxurious activity in most of Asia. This is understandably so, as early adopters in emerging boating markets tend to be the wealthy. However, promoting boating as an elitist activity is not sustainable in the long term. It needs to be branded as an affordable healthy outdoor activity for the whole family. For governments to support domestic boating development, they need assurance it does not run counter to the egalitarian ideals they are expected to uphold.

YP Loke, GMBA Singapore
Tel: +65 9736 1819
Email: yp.loke@gmba.blue

In the marina industry, data are the seeds of action! | Jean-Michel Gaigné, CMM, GMBA – France

Monitoring, recording, tracking. Then processing, data analyzing, even driving artificial intelligence… The more information we collect, the more efficient we can be!

Not so long ago, the marina industry was still in the Middle Ages and many marina operators were using a marina management software application like a simple spreadsheet. To list the boat names and characteristics associated with owner’s contact details and to charge the marina fees were the only functionalities commonly used. Thus, any refined analysis was impossible and statistics necessarily empirical. I remember a discussion that I had with the harbor master of a commercial port, about ten years ago. The Port Authority was able to report about the list of cargo ships that called over the year, with any detail of freight loaded and unloaded, while the marina manager in the same town was just able to give the number of yachts having a permanent berthing contract, and the number of visiting boats received with their approximative origin… In France, I have heard many times such a sentence: “The boats berthed in the marinas don’t sail more than 7 days a year!” And I have always replied what is the only possible answer: “This is stupid, no one has statistics about it, it differs from one location to another one, and you could say 10 days or 30 days that it won’t be more convincing. Absolutely no one knows!”

Marinas must make the leap to become responsive

Hence, how to convince an investor or a public authority to improve an existing facility or to develop a new marina if you don’t have any proven arguments, just rough approximation, and gut feelings? The result is that many decisions have been taken according to biased studies and political interests. Of course, until recently, there were few technical devices available to help decision makers to fine tune their strategies and to confirm their choice, but nowadays it should be unacceptable anymore to deal without such assistance. Of course, for a marina with a lock and access constraints, it was easy to register the boat movements, but this is not the general case. The boat owners themselves were reluctant, and sometimes still are, to give any personal detail and to know that a third party could have an eye on their boating habits. But the lack of information is finally negative for the marina operator, the yachtsman, and the public landowner.

Sensors give us the arms of Vishnu to control marina operations!

Fortunately, many technological tools are now at our disposal, leaving these times behind and giving us a precious help. I pass over the CRM functionalities of most management applications that allow the customers to upload documents, access to a private and secure space, pay bills and exchange with the marina operator. Most important are the wireless sensors and the smart meters that send real-time information to both the management and the berth holder. It is of particular interest for the boat owner to know that something is going wrong aboard, that a fire risk is detected, that the battery level is very low and will hinder to start the engine when coming for a day out, or that there is water in the bilge… This is equally significant for the marina operator to be able to prevent any fire from starting and possibly expanding to other yachts, or to avoid the risk of a boat sinking in the marina, causing pollution.

The wireless presence sensors allocated to each berth, the RFID chips put on the boats, the smart motion silhouette detection cameras situated at the marina entrance, even the floating or flying drones are all key allies to monitor real-time occupancy of a basin and to optimize the berthing management. Thus, a boat which is obviously used twice a year for a few weeks might receive a combined proposal of dry stack and temporary wet berth, and it becomes easy to know with accuracy how the resident yachts are used. The individual water and electricity metering is a good way to empower the boat owners, while it gives opportunities to save energy and resources.

French companies like Falco (Wattson Elements), also based in the U.S, or NGE Connect, Monthabor, Sense4Boat in Croatia, Marina Master in Slovenia, SaMMY in Greece with its pilot project deployed in Patras, are good but non exhaustive examples of what can already be provided to marina operators.

In a nutshell, there is no reason today for not having all the relevant statistics available to the marina operator except for unwillingness or a backward-looking attitude. Age distribution of the berth holders, home origin, frequency of yacht uses per day, month and year, comprehensive review of the boats condition, energy, and water consumption and so on. By cross-referencing all these data, everybody wins:

The boat owner who is notified if something happens on board can save money on its insurance policy, due to increased safety precautions, and can benefit from a tailor-made offer from his home marina. The management company which has the perfect knowledge of all operations can better serve the customers while maximizing profits. Our planet, eventually, with a better use of energy and freshwater, and little pollution hazard.

And what about climate change?

This is another field in which the so-called smart marinas face a big challenge, and the prehistoric ones too: climate change and sea levels rising. Everybody knows that this is a threat for our infrastructure, even for the population, and that existing facilities will have to be adapted accordingly. The weather forecast state agencies and the most serious studies give us are predictions with a first estimation foreseeing a rise of about 20 cm in 2050. Geographical institutes have published maps showing the coast erosion according to the topography and the shoreline profile, using the Bruun Rule among other things. The marinas should be concerned in the first instance, but very few seem to have acted yet.

Indeed, it seems to be of utmost importance to consider the side effects on the weather conditions and to monitor them. In 2010, the cyclone Xynthia hit the south-west of France with battering waves, floodings and wind gusts around 100 knots. Even in the most affected areas, differences in the impacts were noticed. According to the exposure to wind, to the tidal range, to the currents, to the degree of protection provided by the sea walls, to the fetch, to a possible Venturi effect through a natural corridor… the consequences can differ greatly. Therefore, accurate data collected in each single marina should be the rule. Sensors to record the sea level and temperature, the atmospheric pressure, the wind force and direction, the tide conditions, the water quality, and chemistry would be advisable in each marina. The MarineLabs company, based in Canada, has started to deploy a network of such smart buoys, geared with various sensors. Within a couple of years, I am convinced that the data collected will provide crucial information to each port authority, to decide the relevant adaptation strategy to deal with climate change.

If the boat owner’s privacy is guaranteed and the data efficiently processed, there’s no reason to be cautious towards monitoring technology. Marinas must invest rapidly if they want to meet the customers’ expectations of today and the challenges of tomorrow!

Jean-Michel Gaigné CMM, GMBA France
Tel: + 33 682 112 524
Email: jm.gaigne@gmba.blue

Supply chain challenges continue….. Key Scandinavian builders are severely affected

Like the rest of our industry, It should not come as a surprise to anyone that also Scandinavian builders continue to be challenged by bottlenecks in the supply chain.

Whether building in their home country or having their production bases in Poland or Lithuania, the challenges remain and some of them are having a severe effect on timely production, deliveries to end clients and consequently to their bottom line.

The two most known Swedish builders are faced with increasing shortages in the engine supply and current imbalances between supply and demand have put tremendous price pressure on commodities and components in the supply chains on top of it all. For some builders, engines ordered in late 2020 have not yet been delivered making it close to impossible to plan and as one of the results; -putting their financial position at risk.

The backlog of engine orders is not improving, as promised. Consequently, there is a great concern amongst them all when this is going to turn around for the better as darker clouds are emerging over some market segments.

The softening of markets seems to be on everyone’s agenda and fuel prices alone are the direct reason for lower use of newly delivered boats and new boat sales in the lower segments. This is a common observation in all of Scandinavia.

Two builders we communicate with regularly, expect a plus 30 % drop in sales ( and production) in the coming 12 months period. These are dramatic figures for the industry but most of all for the builders who on top of it are battling tough bottlenecks in the supply chain, increased direct material prices, and higher absence due to new variants of covid.

Is it all going the wrong way? Absolutely not; – there is a strong undercurrent of interest and demand for boats and boating however the economies, inflation, energy prices, the pandemic, and the Ukrainian war have all unpredictable outcomes that need positive outcomes.

Boom in Eastern Mediterranean Marinas

It’s a few months now since the Covid 19 virus pandemic ‘ended’, was forgotten, or replaced by the war in Ukraine, so maybe it’s time to draw breath and think about how relatively recent events have affected our lives, behaviour and plans, especially related to our orientation towards the sea and the development of nautical-related businesses.

After the first major lockdowns against the spread of the pandemic – contrary to any expected reduction in consumption other than simple survival – we recorded a significant increase in the sale of pleasure boats, new and used. Reports of a ‘doubling’ of orders came from almost all markets: USA, UK, Spain, Malta, Croatia, Italy. Despite measures taken to suppress the pandemic and maintain stable production, the shipyards barely responded to the increased demands from their dealers.

So the question arises, why do people buy yachts in times of crisis? In particular, there was an increase in orders for boats of 15-20 metres in length. Perhaps the best analysis of this behaviour comes from one of the biggest dealers in Malta, known for his very friendly relationship with his customers. The closure affected people, especially senior management, forcing them to work from home, thereby spending more time with their families. Instead of working away for 10 – 12 hours per day, managers, doctors and business people discovered the possibility to slow their pace and realize that it is possible to be successful with a little less dedication to work. They simply turned to their families, and liked it! They soon discovered an active and quality way of life that could be shared with family, away from large groups of people, on their own yacht.

Increased boat sales logically influences the demand for new moorings in marinas, as well as all other services related to marine businesses.

Along almost the entire Mediterranean, the construction and reconstruction of new and existing marina projects are being started and completed. Even the ‘big players’ recognize the opportunity for investment, so we are witnessing an attempt to consolidate marina capacity by major investment funds and groups. The largest chain of marinas in the Mediterranean, ACI Club with headquarters in Croatia, together with new partner Lurssen Group, has taken over the concession for the construction of the new Porto Baroš luxury marina in Rijeka, a project that has been solemnly mooted for almost 15 years. ACI announces further expansion, both by increasing capacity and expanding services with two new members appointed to the board of directors along with investment in the development of hotels and accommodation. There is also the possibility of restarting the project of building a network of seaplane ports and transporting guests by seaplanes.

The Marina 21 group, with its initial three marinas in Croatia, has announced further expansion and acquisitions in the Mediterranean. The company’s vision is to expand its offer to users, especially offering high-quality yacht maintenance and refit.

Lürssen Group has become one of the most important investors in Croatia in a very short time. In 2020, a new yacht and patrol boat design and engineering office was founded in Rijeka, thereafter taking over the hotel company Liburnia, and building the marina in Rijeka in partnership with ACI. They continue to announce new expansions and new acquisitions in the nautical and shipbuilding sector.

After the takeover by CVC Capital Partners, D-marin does not disguise that it wants to become the largest and most important chain of marinas in the Mediterranean. D-Marin already owns or manages three marinas each in Greece, Turkey and Croatia, Portonovi in Montenegro, and marinas under management in the Emirates. Immediately after the takeover by CVC, they took over Tribunj marina in Croatia, and recently Punta Faro in Italy. New takeovers are planned, but also the construction of completely new marinas in Croatia, Greece and Spain.

In addition to the already mentioned and already established boating markets, the construction of new marinas and the significant expansion of existing capacity is being announced throughout the Mediterranean. Malta is in the process of awarding concessions for two new marinas. In Cyprus, new mega marinas are under construction in Larnaca and Famagusta. In Egypt the development of several marinas on the Mediterranean and the Red Sea are in the initial stages, and the construction of the first mega marina in Algeria is entering its final phase.

For years, Albania has been announcing a shift towards nautical tourism. The construction of modern marinas in Vlora and Saranda should start soon, and the mega marina project in Durrës includes the modification and development of almost the entire city waterfront. Israel has plans for marinas in Ashkelon and Tel Aviv, it is matter of time if and when they will become real.

There is every chance that in a few years the Eastern Mediterranean will soon reach the level of the developed Western European countries, but what does this mean for the average or new-found sailor?

An increase in capacity could mean greater competition and a possible reduction in prices but especially in the example of Croatia, we see that this is not exactly the case. All investors are promising significant increases in the quality and expansion of their service offering, as their business models count on significant increases in price to match the mooring rentals in top marinas in the western Med, but also to financially justify new investments. We are witnessing constant, and perhaps unrealistic, increases in the prices for standard services in Croatia and in Greece, where until recently local port authorities charged extremely small fees for yacht visitors in smaller towns, the government is (slowly) opening space for the construction of new, commercial capacities for yacht berths.

Regardless of the virus that is still quietly causing problems in tourism, the war events in Ukraine, and the crisis caused by the increase in the price of energy and disruptions in the supply chain, we are certainly expecting a significant growth in all activities related to the leisure marine sector and probably a realignment of relations in the entire Mediterranean Sea.