on 7 Sep 2020
Simpson Marine founder and managing director Mike Simpson gives his views on developments in Asia’s yachting scene
From dealing in custom-made Taiwanese yachts for expats in the early 80s to brokering superyacht deals for Chinese tycoons in the 2010s, Mike Simpson has seen sea changes before in the Asian yachting industry, including financial crises and political turmoil. With offices of leading Asian dealership Simpson Marine in many parts of Asia, Simpson has a unique perspective on the regional yacht market.
Today, the world is still confronting Covid-19, but Simpson remains broadly optimistic about the future. Hong Kong’s yacht dealerships enjoyed a springtime boom of orders and inquiries after two months of lockdown in March and April, as yacht owners looked to their craft as a social distancing measure. Simpson notes that Hong Kong owners, so used to using their yachts as day boats, were now overnighting and making full use of all the other features of their yachts.
“We’re seeing a rebound effect. Will it die out and will people go back to their old ways, or will this stimulate growth going forward? It will be interesting to see if other markets experience a similar rebound,” Simpson tells Asia-Pacific Boating.
The Asian yacht market (ex Japan) is led by Hong Kong, but it is by no means the only place for yachting in the region. In the wake of Hainan Island’s new free trade zone plan, hopes are rising that the island province will again experience a boom in yachting activity.
Simpson says the new plan, which eliminates taxes on imported yachts, is potentially a “real game-changer.” He adds: “They are trying to make [Hainan] business-friendly. The intention is to transform Sanya from a seasonal holiday resort to a thriving business centre and tourism hub.”
Simpson is hopeful that the new plan will help yacht sales and charter and open the way for yacht owners in Hong Kong and mainland China to enjoy cruising in the waters around Hainan without the restrictions which are currently in place.
Simpson Marine has maintained a large office in Sanya, despite the prolonged slowdown of yacht sales in China in the past few years. Simpson hopes that boat sales in Hainan, which suffered during the slowdown, will get a big boost this winter.
Hainan is set to be of strategic importance for the future development of yachting
“Like other players in the yacht industry, we’ve been waiting to see if the Central Government’s ambitious plans for establishing a free trade zone and developing ‘marine tourism’ in Hainan would finally materialise,” says Simpson. “The market down there has been very quiet for the past three to four years. I kept our office open because of the strategic importance of Hainan for the future development of yachting in China and in the hope that this free trade zone would finally happen and revitalise the market. It’s been a long wait, but now it has finally been officially announced. This winter, provided pandemic restrictions have been eased and travel within China is allowed, our China team will be down there to gauge the impact of the announcements and to see if we can get the market going again.”
The simplistic stereotype of the Chinese buyer only being interested in entertaining, playing mahjong and singing karaoke on board, is no longer an accurate profile of the Chinese buyer today.
Chinese yacht buyers are changing, and Simpson says they are becoming more attuned to water sports and having fun on the water. This has led to an increasing number of small runabouts and ski and wakeboarding boats. Higher up the scale, a lot of owners may have used their yachts for occasional local cruising and entertaining friends. But these days, more buyers are going further afield, sleeping aboard and using their yachts much more like their counterparts in other parts of the world.
Aquila 36 catamaran in Hong Kong. Simpson Marine represents Aquila Power Catamarans
“The simplistic stereotype of the Chinese buyer only being interested in entertaining, playing mahjong and singing karaoke on board, is no longer an accurate profile of the Chinese buyer today.” There is a growing interest in sailing throughout China, and China now has some world-class sailors competing in International regattas. For the very wealthy, owning a superyacht is now seen as a realistic ambition, Simpson says.
These days superyachts are packed with features, including beach clubs, swimming pools, health spas, water toys and diving equipment. There is also a growing interest in cruising to other parts of Asia and beyond.
In June 2020, Hong Kong emerged as the top market for Sanlorenzo
Expedition yachts are an increasingly popular choice, even in Asia. Simpson describes one Chinese client that built a Sanlorenzo 500XP Explorer yacht with a helicopter deck and storage space for a three-man submarine.
Around the region, Simpson points to taxes, overregulation and lack of infrastructure as the key impediments to growing the yachting industry in Asia. Cambodia currently has 145% tax on imported yachts. Indonesia has a generous three-year cruising permit for foreign-flagged yachts, however, these yachts cannot be chartered. To operate commercially, yachts need to be imported and fly the Indonesian flag, requiring a 75% tax. Myanmar has a 40% import tax on yachts.
In Vietnam, Simpson mentioned that the Ana Marina in Nha Trang is well set up and just the kind of facility that is needed to promote the yacht market there. Prior to the Covid-19 lockdowns, Vietnam’s economy was growing at record pace, and taxes on yachts in Vietnam are “realistic” at about 20%.
Asian buyers are learning fast about new trends in yachting, yacht design and water sports.
Thailand, which is trying to restart its tourism industry with a stronger focus on the high end rather than mass-market tourism, is still focused on expat yacht buyers rather than local Thais. “In ‘normal times’ Thailand is a great charter destination, and we have done very well with our Lagoon Catamaran charter fleet. In terms of sales volume, Thailand ranks third in Asia after Hong Kong and Singapore. It is an important market and it has a lot of room to grow,” said Simpson.
“Asian buyers are learning fast about new trends in yachting, yacht design and water sports. They are much more sophisticated and knowledgeable than before and want to take full advantage of all that the sea has to offer. On a positive note during the pandemic lockdowns, we have witnessed a growing appreciation of yachts and the yachting lifestyle.”