Dubai misses out on luxury yacht market

A lack of infrastructure and restrictive maritime regulations mean other ports of call are more popular.

Owning a vessel like the $200m mega-yacht 'Dubai' may soon be considered an "essential luxury", according to a yacht distributor.

DUBAI // The luxury yacht-building industry may be buoyant in the UAE but restrictive maritime regulations and a lack of infrastructure mean you are more likely to see such boats in the Mediterranean than here, delegates at the Seatrade Middle East Cruise Conference heard yesterday. The UAE has great potential as a yachting destination but more money needs to be spent on berths, cranes and repair yards if a cruising culture is to grow, said Alessio Tumbiolo, chief executive of ART Marine, a yacht distributor.

"Many mega-yachts are built in the Gulf and owned by Arabs but are kept in Europe or the USA," he said. "It seems a waste because there they can only use the ships for the summer months and they have to be mothballed in the winter. If they stayed here they could use them all year round. "We are looking at ways of promoting a yachting culture in the Gulf. We intend to charter mega-yachts by the hour to give people a feel of the experience. We are confident that once local buyers are drawn to the sea they will consider a superyacht an essential luxury."

One of the obstacles to realising this dream is that under UAE maritime law, boats can sail through national waters only to enter or leave port. They are prohibited from cruising along the coast. That offers no incentive for local owners to base a yacht in the region, delegates at the Dubai conference were told. Industry representatives and the Government are negotiating to relax the regulations. Despite these obstacles, the Middle East superyacht market appears to be riding out the global economic crisis and looks set to emerge as a market leader. Sales this year topped US$685 million (Dh2.5billion) and five mega-yacht orders were placed.

With the UAE's love of expensive cars, helicopters and private jets it is perhaps surprising that more superyachts are not berthed alongside the Dubai Marina or Palm Jumeriah. They are one of the most expensive luxuries money can buy, stretching up to 160 metres and costing up to $200m. They take two and a half years to build and the backlog of orders means that one ordered now would not be delivered until 2014.

According to industry experts, Dubai is likely to become a leading destination for cruise ships. It is estimated that by 2010 the emirate will welcome 160,000 cruise-ship tourists a year. Michael Bayley, senior vice-president international of Royal Caribbean cruises, said the Gulf would become as popular as Europe and Latin America over the next decade. "There are many factors that make the UAE a popular choice for cruise holidays. The market size, sunny weather and quality of destinations make it an easy sell. The number of cruise-ship calls to the region is set to increase significantly in 2010 with several flagship ships launching cruises focusing on Dubai."

However, as with the superyachts, a lack of infrastructure and support from Government has been highlighted as an obstacle to development. Pier Luigi Foschi, chairman and chief executive of Costa Crociere, speaking at the conference, called for a permanent regional forum, involving operators, tourist agencies and the Government, to debate issues such as port infrastructure, shore excursions and immigration formalities.

"It is critical to the development of the industry in this region that all parties collaborate to ensure we can offer the best experience possible for guests." he said. Another initiative that could help is a Seatrade Cruise Academy, planned for Dubai next year, which will train local tour operators. A note of caution was sounded that while Dubai would always be the destination of choice, the industry and tourist boards needed to focus on the cultural heritage of the region, in order to make the cruises a viable alternative to popular routes in the Caribbean and Mediterranean.

Sebastian Ahrens, managing director of Hapag Lloyd, said: "The Gulf has all the right ingredients for cruises but a lot of work has to be done before it sees a boom as a premium cruise destination. The values and virtues of other countries in the Gulf need to be promoted to spread the appeal beyond Dubai and Abu Dhabi." [e-mail]