The Asia Pacific superyacht market broke record yacht sales in the last year, this unprecedented performance has stemmed from an overall increase in yacht ownership and yacht chartering across the region. In this article, we analyse the current market and highlight the key trends that are painting a new era for the Asia Pacific superyacht sector.
The Asia Pacific Market
The Asia Pacific region offers one of the best coastlines in the world, stretching over 135,000 kilometres. Regarded as a yachting paradise, Asia houses thousands of islands in the Pacific Ocean, which are known tourist spots that boast modern cities with authentic culture, luxury beach resorts with white sandy beaches and luscious tropical habitats to explore. The Pacific Ocean is ideal for sailing and its rich marine life offers exceptional diving and snorkeling along the coral reefs.
As the recognised yachting hub of Asia, Hong Kong has been the most active country in the superyacht sector many years, with its maritime infrastructure and competitive fiscal regime attracting many leading global yacht brokers to set up regional offices. However, more recently there has been a surge of growth in the yachting sector across the Asia Pacific, which has led to a development in shipyards, new builds, manufacturing partnerships and sales offices across the region.
Yacht brokers have begun targeting less developed countries in South East Asia, including Laos, Thailand, Cambodia and Vietnam. It seems this strategy is proving successful, as yacht brokers in Asia have reported record sales in the last year. An example is one of Asia’s largest yacht brokers, Boat Lagoon Yachting, which holds offices in Singapore, Indonesia, Malaysia, Thailand and the Maldives.
Another shift in the Asia Pacific superyacht market landscape that is showing promise is the developing yachting sector in China. Clouded with stringent regulation for many years, China deterred any attraction of foreign investment or supported development in its maritime infrastructure. Whilst its yachting sector is in its early life cycle, the country recently made many positive advancements, which has contributed to the yachting ‘boom’ in the Asia-Pacific.
In contrast to China, Hong Kong holds a rich maritime history and is excluded from heavy tax on luxury goods, which has been the main factor stunting China’s growth in the sector. Hong Kong proposes an attractive fiscal regime for yacht importation and VAT registration, which has strengthened its position in the sector.
In December 2016, the Hong Kong Marine Department relaxed the rules for visiting yachts and their crew, which boosted yachting in the country. Many leading global yacht brokers expanded to Hong Kong years ago to take advantage of the Asia Pacific market, including Simpson Marine in 1984, which has since expanded its presence across Thailand, Indonesia and Malaysia. Prestigious yacht brokers such as Azimut yachts, Camper and Nicholsons, Benetti and Burgess Yachts set up an office in Hong Kong, which have been very active in the market. It has been noted that there have been record sales across the board for yacht brokers in Hong Kong, which includes Azimut and Simpson Marine.
After the U.S, China has the second highest concentration of billionaires globally, as the markets target audience; this poses huge potential and a promising outlook for the regions superyacht sector. Industry statistics state the Asia Pacific yacht market is witnessing strong growth and by 2026, Global Industry Analysts have predicted China’s yacht market to be worth $1.2 billion.
A post-pandemic trend demonstrated an increase in yachting in the region, due to more locals choosing the isolated, luxury travel option, which led them to discover more of the beautiful landscape on their doorstep. As a result, there has been a spike in Chinese yacht ownership and even over the last decade; the interest in the local yachting scene has been gradually rising with Chinese sailing clubs popping up across the region, local regatta races and international sporting events attracting global attention. Shaping this trend is the consistent improvement of living standards, which has resulted in consumers purchasing more luxury goods, such as yachts.
The rise in yacht ownership has slowly increased China’s global yacht market share; to put this in perspective, according to the China Transport Association’s Cruise Yacht Branch, the total number of yachts in China will increase from 38,100 to 163,510 between 2020 and 2025. This clearly demonstrates the changing landscape in recent years, and a key factor driving this is China supporting new development in the sector, with the aim to boost the country’s consumption and attract tourism.
Examples include the construction of local shipyards producing new builds. There have also been amendments to the regulation in place including loosening the country’s yacht registration standards, the yacht ownership criteria, the entry/exit requirements and easing the requirements for traveling between provinces. They have also introduced non-resident yacht registration and reduced yacht importation tax by a further 5% to encourage new business to the sector.
In doing this, it has widened access to the superyacht market in China and encouraged yachting for both pleasure and commercial use. Yacht chartering has become more popular, which boosts tourism and allows consumers to explore the great destinations on offer. Industry research states that domestic chartering across countries in Asia is increasingly popular; Simpson Marine noted there has been unprecedented growth in this area, especially in Hong Kong and Thailand.
Many leading global yacht brands have invested into Asia by forming manufacturing partnerships, for example leading Asian superyacht broker, Simpson Marine and the prestigious Italian shipyard, Sanlorenzo. World-renowned catamaran manufactures, Lagoon and Aquila, have been very successful in the Asian market, with yacht sales spanning across China, Hong Kong, Taiwan, Thailand, Malaysia, Singapore and Indonesia, Vietnam, Cambodia and Myanmar.
Another is Ferretti Group, which set up 14 regional distributors and sold $70 million worth of yacht sales in Asia Pacific in 2020. They also demonstrated its commitment to developing the regions maritime infrastructure by signing a Memorandum of Understanding with the Sanya Central Business District.
As the recognised yachting hub of China, Sanya is part of the Hainan Province, which is set to become a trade free zone by 2025. The construction of the Hainan Free Trade Port will exclude import tariffs on yachts imported into the island for transportation and tourism, value added tax and consumption tax for foreign exporters. The number of registered yachts in Sanya has increased from 10 to 500 in the last decade, and in last year, apart from the surge in yacht registrations, the Hainan province accommodated 1.13 million tourists, which is only predicted to increase due to the potential the zone promises for the developing yachting sector.
It is obvious that the Asia Pacific superyacht sector is developing rapidly, whilst advancements in regulation in China provide new potential for the region, such as the Hainan FTZ, there are still barriers in the maritime infrastructure in place, including the less developed neighbouring countries. However, as the market trends suggest, yachting has become increasing popular in recent years , the shift in behaviour has created a new market for the Asian superyacht sector and this will only result in the sector maturing to capitalise on this growth. With more development in shipyards, suppliers and well-equipped marinas, plus the rising number of yacht sales across the region, the outlook only looks positive for the future Asia Pacific yacht sector, and the booming economic growth it will provide for the many countries it will bring with it.