YP Loke

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is Thailand, where boat tax was introduced soon after the 1997 Asian Financial Crisis (although the tax has since been repealed).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

 

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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

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.

 

1. 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.

 

2. 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.

 

3. 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.

 

4. 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.

 

5. 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.

 

6. 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

 

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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

In Asia’s relentless march towards economic prosperity and its bid to catch up with the developing world, many fundamental values important for evolution of the human condition and wellbeing are often cast by the wayside. This includes (amongst others) the arts, preservation of natural capital (the world’s stock of natural assets, which makes life possible), culture and heritage. Asian parents – pushier than their western counterparts – besiege their children to eschew the liberal arts and social sciences in favour of the hard sciences. Assigning monetary value to the former is difficult but not impossible. Their exclusion from the gross domestic product in measuring economic development is a serious shortcoming. In this article, my focus is on just one small part of this broad spectrum of fundamental values – maritime heritage. It is a subject I am familiar with, given my background in the maritime space, and the fact that I live in Singapore – a modern bustling port city that grew from a sleepy fishing village when the British came here and claimed it as a colony some 200 years ago. While our journey of economic progress is often envied by others, our record on retaining our culture and heritage has been wanting.

The ideology and relevance of heritage in the search and articulation of identity is not new. The noted eighteenth century Danish philosopher Søren Kierkegaard was quoted to have said “life can only be understood backwards; but it must be lived forwards”. In the case of Singapore, it explains the genesis of our multicultural past and forms the cornerstone of a multiracial identity which engenders social responsibility, inclusiveness and a common sense of place. Weaving our maritime heritage into other cultural and economic aspects of our society enables us to resonate with our past and gives us a compass for moving forward as a community.

One would have expected that with maritime trade so firmly entrenched in Singapore’s economic lifeblood from ancient times until today – Singapore remains the world’s busiest port when measured by shipping tonnage – that some sense of maritime or seafaring ethos would become embedded into our cultural DNA. Sadly, this is not the case. While the body of knowledge and public policy involving heritage and conservation on terra firma is generally healthy, thanks to agencies such as the Singapore National Heritage Board, the state of its maritime cultural landscape is in desperate need of a makeover.

Our maritime heritage warrants effective management at a national level. Industry laments young people aren’t interested to come into the maritime workforce which is in dire need of manpower. To be sure this isn’t the kind of cushy industry typical Singaporeans yearn to be in, but the lack of strategic overview and public policy surrounding the maritime cultural landscape certainly does not help. This lack of a maritime identity in the Singaporean cultural psyche is a stumbling block to its stated goal of becoming an international maritime centre.

Witness the other end of the spectrum, where Scandinavians (Norwegians & Danes in particular) have a clearly engendered maritime cultural identity rooted in their Viking past, which they proudly articulate. That these great seafaring nations can maintain a dominant position in global shipping up to today is due in no small measure to the link with their maritime cultural heritage.

Singapore’s predicament of getting young people into the maritime workforce can be neatly summarised in the following quote by Antoine de Saint-Exupéry “If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea”.

YP Loke | GMBA- Singapore
+65 9736 1819
yp.loke@gmba.blue

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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

Recently, the High Commission of Sri Lanka in Singapore contacted the Singapore Boating Industry Association to assist in the organisation on an online workshop to promote Sri Lanka ‘s plan to develop its recreational marine sector.

There are strong political and cultural linkages between Sri Lanka and Singapore. Both are small island states with a British colonial past. Diplomatic relations go back over 50 years, but this is pre-dated by strong people-to-people ties underpinned by the mutual understanding and respect for shared cultural values dating back to the beginning of the medieval Maritime Silk Road. The 2019 trade statistics show Singapore as the fifth largest investment partner for Sri Lanka with close to USD100 million in investments, while bilateral trade amounted to almost USD900 million.

Economic development in Sri Lanka was stymied by internal strife for many years. An insurgency in the north, led by the Liberation Tigers of Tamil Eelam (LTTE) resulted in a civil war which ended in 2009. With peace came relative calm, resulting in much needed economic development. Among other economic sectors, the Sri Lankan Government paid particular emphasis to the development of a leisure marine sector where it felt the Country has a natural competitive advantage. A new State Ministry – the State Ministry of Boats & Shipping Industry – was formed to oversee the national effort to develop the Country’s marine manufacturing capabilities and promote it as a yachting and nautical tourism hub. To encourage investment, new ventures in marine manufacturing are entitled to a seven year tax break.

Sri Lanka has been a commercial boatbuilding centre for 50+ years, building for the domestic market and exporting mainly to regional and new world markets. It hopes to move up the value-added chain by building for the recreational marine sector. Despite the pandemic – of rather because of it – boating activity has increased globally, resulting in a shortage of boat production capacity. This surge in global demand represents an opportunity that Sri Lanka’s boatbuilders hope to capitalise on. Manufacturers will have to acquire new technical knowhow and market knowledge to cater to this market. The exacting demands and building standards in recreational boat manufacturing is a challenge they need to address and overcome.

On the domestic front, the civil war had in the past hindered investment and development. The result is that the Country’s unspoilt beaches and varied coastline are a treasure trove of natural beauty preserved in a time warp. The Government is now looking at developing nautical tourism to untap this vast potential. A string of marina sites has been identified around the island, waiting for the right investor. These include a mix of greenfield sites and existing fishing harbours. The Colombo Port City Marina which currently has a temporary marina and is a base for whale watching activity is a specific investment opportunity currently being promoted. Whale watching and surfing are on-going nautical tourism activities at a nascent stage of development. With investment and government support, the sector is set for dramatic growth with much more varied and sophisticated tourism product offerings. When in-bound travel resumes post-pandemic, many more visitors will seek to reconnect with the great outdoors and commune with nature. This makes the demand for authentic, unspoilt, and natural destinations – of which there are many in Sri Lanka – far outweigh that of overpopulated cities with jostling crowds.

In consonant with the development of nautical tourism, Sri Lanka plans to capitalise on its strategic geographic location in the Indian Ocean region and cater to long distance blue water yachtsmen and superyachts. Its position between Europe and East Asia makes it the ideal stopover for those plying this route.

The 3-hour online workshop took place on 11-May 2021. Presenters at the workshop included high level government officials, Mr. Harsha Pathberiya (Acting Director, Industrial Exports Division, Export Development Board) and Mr. D Mataraarchchi (Secretary of the State Ministry of Boats & Shipping Industry Development), who outlined the Government’s plan to develop the export and domestic sectors.  The full programme (PDF file) can be seen here.

A panel of subject matter experts was assembled to discuss the topics presented. They included GMBA Advisors David Lewin and Oscar Siches. Lewin spoke about the need to develop a boating culture within Sri Lanka to build a local market as a foundation for an export industry. He said that partnering with overseas builders in the manufacturing of series production boats is one way to fast track the development of the industry. It is an area where GMBA with its vast overseas connections can assist.  Siches said that the great strength of Sri Lanka lies in its cultural authenticity and geographical advantage. In keeping with this thought, simple moorings buoys at some locations may be more thematically aligned with the local environment than a spanking new state of the art marina.

The workshop closed with a roundtable discussion moderated by ICOMIA’s Secretary-General Udo Kleinitz. Sri Lanka recognised its potential in leisure marine as far back as 2014, when the ICOMIA Marinas Group met in Colombo at the invitation of the Boat Building Technology Improvement Institute in Sri Lanka (BTI). It is now the ICOMIA member for Sri Lanka.

The development of Sri Lanka’s recreational marine sector bodes well for the whole industry in Asia. Its success in this endeavour will be closely monitored by industry watchers and marketeers looking for new markets to distribute their product. A rising marine recreation tide in Asia will float all boats.

YP Loke | GMBA- Singapore
+65 9736 1819
yp.loke@gmba.blue

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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

As I write this, Chinese New Year is upon us. It is a big occasion (more so than Christmas or Thanksgiving) not just in China but with the Chinese diaspora around the world. In the Chinese zodiac, it is the Year of the Ox. The fengshui experts will have you believe it is a favourable year for economic recovery and consolidation – a year to review our finances, and take a longer term view with regard to investments. They may not be wrong. The impact of the Covid-19 vaccine rollout is still far from certain, and predictions of a recovery of the global economy vary widely.

Singapore is well into Phase Three of the re-opening measures introduced since our enforced lockdown, although there is some pre-emptive tightening up ahead of the Chinese New Year, to prevent large groups from gathering in public or in homes. Covid-19 cases have been zero or remained in single digits for some weeks. Given that most of the world is combating a rising Covid-19 caseload, this is a remarkable outcome. It has prompted the World Economic Forum, which usually hosts a glitzy annual meeting for political and business leaders in the Swiss ski resort of Davos, to move this year’s event to Singapore in August. It will be only the second time the event has been held outside Davos in its history. In 2002, the Forum was organised in New York to show solidarity with the US after the 9/11 terror attacks.

There are two main reasons Singapore has been comparatively successful in containing Covid-19. Firstly, the Government has been able to control the narrative here, with less distraction and dis-information than many other countries. Yes, Singapore style democracy is less liberal and falls short of the western-style democratic model that conventional wisdom holds up to be the best form of government. But when one studies the numbers, or asks its citizens, there is no doubt that Singapore’s government is delivering the results the people want.

Secondly, the concept of nation over self, a cultural value posited by Confucian ideology is generally in consonant with the predominantly Chinese majority. Ceding some individual autonomy to the state in return for the greater good, has resulted in growing prosperity since independence some five decades ago. It has served to strengthen the social compact in Singapore and the Government has called on the social capital built up over the this period to respond effectively to the health crisis.

History has shown that a major crisis can be a catalyst for crucial change. Some might say that the crisis presents us the opportunity to re-think society and make changes that would not have been politically feasible without an existential threat hanging over us.

Could we, perhaps, strengthen global partnerships, accelerate the shift to sustainable energy, re-evaluate the effort in tackling climate change, or forge a new sense of community that mends the fault lines in society that divides societies? While it is too much to conclude that free market liberal democracy has failed, it is clear the fruits of globalisation hasn’t been distributed as evenly as it could have been, resulting in a widening income gap and the ascent of the anti-trade movement.

How will all this impact boating the other side of Covid-19? By now, it has been drilled into us to expect a new post-pandemic normal. Covid-19 has affected every strata of society, re-focusing emphasis on personal health, resilience and well-being. There are many on-going conversations and predictions as the strategists (including us here at GMBA) among us glaze into our crystal balls.

The impetus for change – be it a return or a conversion to boating – might be more intrinsic than one might think. Research has shown that many health benefits are derived from being near the water, and being out with nature. Many countries have reported that boat owners have returned to the water with a vengeance after being closeted at home. The claustrophobic effects of a forced lockdown has led to a yearning for wide open spaces and a human reconnection with nature. Boating and watersports certainly deliver on both these fronts.

Many boating associations and communities around the world are initiating campaigns to capitalize on this trend and promote the safe return to boating. They are introducing measures not just to sustain but accelerate the growth of boating post-pandemic, given its new role as elixir for personal well-being and good health. The pandemic has brought out the best and the worst in local communities around the world. As has often been declared, we are in this together, and in playing our part, we the boaters, our families and friends can confidently return to the water, assured in the knowledge that we do so in health and in safety.

YP Loke | GMBA- Singapore
+65 9736 1819
yp.loke@gmba.blue

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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

YP Loke, Chairman of Singapore Boating Industry Association, says boat owners need to act responsibly as boating resumes with restrictions.

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As I write this, Singapore is in Phase Two of the re-opening measures introduced after the easing of our enforced circuit breaker. Boating activities can resume as part of this phase.

The Singapore Boating Industry Association (SBIA) has been making the point to our government agencies that seaports and sailing are healthy outdoor activities for the family that readily conform to Covid-19 safety measures. Indeed, MP Tan Bee Wah made this point in Parliament in her speech on June 4.

By now, it has been drilled into us to expect a new post-pandemic normal. So, it should come as no surprise that boating the other side of Covid-19 will come with caveats, as is the case of countries that have resumed boating ahead of us.

In Singapore, the measures that boaters must follow can be distilled into four key areas:

1. Contract Tracing: Each boat must maintain a register to enable contact tracing if the need arises (for businesses, this can be a SafeEntry QR Code).
2. Safe Distancing: Not more than five people on board, excluding employees hired to operate the boat such as captain and crew. Where possible, practise safe distancing by following the 1m apart rule.
3. Personal Hygiene: Keep hands and surfaces sanitised. When practicable, wear a mask if there are guests on board who are not from the same household.
4. Boat Alone: Do not socialise on the marina pontoon or raft-up with other boats at sea.

An infographic has been developed to help promote this message, the full text of which is contained in the links provided by the QR Codes in the poster.

Many clubs are reminding members that BCPs (Business Continuity Plans) may mean that employees may be divided into teams and are therefore working at half the normal staff strength. This, in addition to health screening measures, puts a strain on operations.

At the same time, members must be patient and allow more time transiting from their club to their boat. Many marinas also require that boats leaving and returning to the marina call ahead, so that an orderly queue can be maintained and relieve congestion which could lead to the breakdown of safe distancing.

Many other countries have reported that boat owners have returned to the water in huge numbers after being closeted at home. The claustrophobic effect of a forced lockdown has led to a yearning for open spaces and a human reconnection with nature – boating and watersports certainly deliver on both these fronts.

It is not clear, however, how long this pent-up feeling to embrace the great outdoors will last. But it is a window of opportunity for boating to showcase and promote its healthy outdoor side.

Once past the immediate post-lockdown surge, the outlook might be less bright, reflecting the sentiments of the weak economy. We have seen in previous downturns (think Asian Financial Crisis or SARS), that conspicuous consumption was frowned upon.

For example, in Thailand, politicians pandering to the populist vote introduced a boat tax which dealt a crippling blow to boating businesses in the country. This time, there is the added complication of disrupted supply chains as manufacturers return to boatbuilding, which may have significant impact on new boat sales worldwide.

Despite many boat shows being cancelled or postponed in the first half of 2020, dealers in many countries including Singapore are reporting an uptick in sales and enquiries. The Singapore Yacht Show was – among many international shows – forced by the pandemic to be postponed (the new dates are October 22-25).

Boat shows are an important outreach by the industry to prospective buyers and the public. They generate interest and excitement, keeping boating top-of-mind. They are the industry’s shop window where consumers can feel and touch the product. Unlike the automobile industry where you can go into a showroom at any time, boats are on display only a few times a year in this part of the world.

Dealers depend on shows to build and update their database of prospects, which they then develop throughout the year to convert to sales. Having said that, the nature of shows may well change after Covid-19. The need for safe distancing and the limitation on the size of gatherings may lead to smaller “distributed” shows. Virtual boat showrooms have also sprung up in the online sphere, accessible globally and often on-demand.

The profile of boaters has also changed with the average age of the boater rising worldwide, as fewer young people take to boating. One key insight is that millennials are more likely to purchase experiences rather than product.

However, boat shows are slow to seriously embrace the selling of boating experiences rather than boats. With or without shows, the overall industry needs to strategise on how best to win over new converts and reverse this trend. Covid-19 may well be a catalyst that accelerates this change.

The coronavirus has undeniably affected every strata of society. It has placed great emphasis on personal health, resilience and well-being. The impetus for change, be it a return or a conversion to boating, might perhaps be more intrinsic as may be suggested by research, both previous and emerging, on the health benefits of being out with nature.

Many such studies have shown that people who reside near water fare better than those who stay inland. Author Wallace J. Nichols expounds in his book Blue Mind: “Simply the mere sight and sound of water promotes wellness by lowering cortisol, increasing serotonin and inducing relaxation”.

Around the world, boating associations and communities are today initiating campaigns promoting the return to the activity, governed by measures to safeguard the interest of boaters, service providers and the general public. Every individual has a role to play in keeping boating safe and accessible for everyone.

For enquiries, email: ypl@spinnaker.com.sg

YP Loke is the Chairman of the Singapore Boating Industry Association and serves as Vice-President on the Raffles Marina General Committee. A naval architect by training, he is part of the Global Marine Business Advisors alliance and heads up Spinnaker International, which consults on boating and marina matters. 

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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

Marina development is a risky financial undertaking. This is especially so in developing markets where the market is facility driven. In other words, a developer builds in the absence of local demand but anticipates that once the facility is completed, demand will be stimulated through proper management, marketing and promotion. Many countries including those in the Middle East, East Asia (including China) and Southeast Asia have been or are going through this phase of market development. Such a business strategy can only work where the regulatory climate is conducive and supportive of recreational boating.

Many communities worldwide have made recreational boating their economic lifeblood. These include many municipalities bordering the Mediterranean, the many countries that form the Caribbean, the Bahamas, and Florida, USA.

It is an undisputed fact that the rain forests of South-East Asia are the terrestrial home to the world’s highest biologically diverse eco-systems. It is the centrepiece of a highly successful and growing eco-tourism market, and its value as a tourism drawcard is widely recognised. What is less well known is that the coral reefs in the region are the underwater equivalent of their terrestrial counterparts, and is a biological reservoir of extremely diverse habitats, possibly even more so, than on land. Archipelagic South-East Asia – with over 25,000 islands – has all the geographic prerequisites and natural attributes for the development of nautical tourism, with the potential to eventually match the stature of the established cruising regions of the Mediterranean and the Caribbean. Aseanarean, a name coined by the boating industry to thematically brand the region from a nautical perspective, has gained some traction. The moniker used to describe the region a decade ago – Caribbean of the East – ignores the unique cultures and heritage endemic in Southeast Asia and does it injustice.

With collaboration among the governments in Southeast Asia, and the right policies in place, Aseanarean can become a global cruising destination where boating businesses flourish. Many other jurisdictions have found that fiscal and other measures that stimulate recreational boating eventually bring more to the community and government, compared with measures that stifle boating. Boats, ultimately, are movable assets, and owners are free to berth their yachts outside of an unfriendly regulatory or tax regime. This is particularly true in South-East Asia where countries are densely packed and within easy navigable distances from each other.

Marinas are boating gateways that provide access to the water. Marinas and a myriad of boating businesses work in partnership, as part of the recreational boating industry that creates employment, anchor real estate values, and generate taxation in various forms from which governments benefit. Studies in developed boating markets have shown that US$6.50 to US$10.00 is generated in the community for every dollar spent at the marina. There is no reason why this should be different in new markets. Other studies have estimated that a typical owner of a large yacht will spend an estimated 10% of its value annually on maintenance and upkeep. Many factors make up this figure, including payments to marinas, crew, boatyards, contractors, chandleries, victualers, bunkering and insurance companies. The ripple effect trickles downstream to hotels, shops, restaurants, bars, visitor attractions and travel agents, to name a few. These effects continue to multiply further downstream in the economy. As these businesses pay taxes and create employment, governments eventually benefit more than they would from direct boat taxation.

A weakness of recreational boating is that it is often perceived as elitist or expensive. Large boats tend to dominate the headlines, whereas the reality is that over half of the boat population comprises small craft under eight metres. This has made boating an easy target for politicians pandering to the popular vote. Contrary to this popular misconception, boating is not confined to the wealthy but extends across a broad economic spectrum. It is a healthy outdoor activity that bonds communities, and countries that do well in competitive sailing have kept the cost of boating affordable. This enlarges the pool of young sailors from which sailing coaches can talent pick and ensures that older sailors can continue to pursue their sport as a hobby in their post-competition years.

Boating in developing markets are at a stage where, in order to grow, national policies have to be adopted that will nurture the industry to bring it to a more mature level where it is self-sustaining. Many specialised marine businesses operate in niche sectors that cannot survive without a reasonably sized boat population.

Finally, the positive benefits of marinas transcend economics. Marinas provide a quality of life enhancement for both active and passive recreation. A modern marina anchors the aesthetics of the waterfront and immediate hinterland. It enhances the enjoyment of customers, tourists, and the public at large. Very often, there is an educational element where people learn to sail, are taught about the marine environment, the maritime heritage of their country and the need for their preservation. But ultimately, marinas only thrive where the regulatory and tax regime supports boat ownership, whether the boat population is home-based, transient, or tourism based.

 

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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