Boatmakers and brokers attending the Dubai International Boat Show are confident that rising house prices and growing consumer confidence will have a positive knock-on effect on boat sales this year.
One of the highlights of this year's boat show, now in its 22nd year, is the superyacht Nirvana, which at 88.5 metres long is the largest yacht ever to appear at the event.
"So far as being here this week with Nirvana, it's a good place for us to sell the yacht," said Nick Edmiston, the Monte Carlo-based broker selling the boat, which has a price tag of €230 million. "There is a whole hub of wealth here in Dubai."
The UAE economy grew at a rate of 4 per cent last year and house prices across the nation advanced more than 30 per cent. Consumer confidence reached a record high in June, with sentiment levels at 94.7, according to a MasterCard Survey.
Erwin Bamps, the chief operating officer at the UAE superyacht manufacturer Gulf Craft, agreed.
“Looking at any market here from real estate to the car market to anything that’s happening in Dubai’s malls and in retail – there is an definitely an upswing,” he said. “We are an emotional product purchase, we are an impulse-buying sector and so that always flourishes in situations of positive consumer confidence. I can say it has been going up consistently here in the past 12 months. If you walk around the streets of Dubai, any of the malls, you see the smiles are out.”
During the economic recession that resulted from the 2008 financial crisis, many boat manufacturers kept producing larger boats for the super-rich, who remained extremely wealthy despite the downturn. Indeed, Gulf Craft announced last year that it was making its largest boat to date: a 155-foot superyacht scheduled for completion next year.
This year, however, Gulf Craft introduced two smaller models – a 48ft family boat and a 56ft passenger boat. These are aimed not at the super-rich but at the comfortably well off who now feel more secure about their jobs and their prospects.
“That’s why we are bringing in newer releases now of a smaller size and that wasn’t the case two years ago,” Mr Bamps said. “We see not only a continued interest in those super-luxury bigger-sized vessels but we see an increasing appetite for the market in between Dh5 million and Dh6m.”
Executives at the pavilion dedicated to the UAE’s small boat makers also expressed confidence about their prospects for this year.
Hamad Kassab Bachi, the chief executive of Emocean Marine, a maker of sporty, luxurious boats, said sales in the first two months of this year matched sales in six months of last year. He added that his company and others had done well out of the recession because during that time they worked to improve quality while keeping prices low.
“People who were not necessarily short on cash but short on the desire to spend were willing to take a chance and test something local because it had a price advantage rather than being brand-oriented,” he explained.
He said those who bought boats in 2008 were now ready to upgrade and would be returning to Emocean for their next purchase. While the company had in the past produced only 27ft boats it was launching 38ft and 42ft boats this year, while 55ft and 60ft boats were “in the pipeline”.
“Usually what people do is upgrade,” he said. “So we are jumping up from smaller cruisers to larger cruisers. It’s paid off quite nicely for us since 2008.”
lgutcher@thenational.ae
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