How the super-wealthy stay afloat in stormy weather

The recession did not seem to be having an impact at the Abu Dhabi Yacht Show, where business was brisk.

Ali al Naqbi, left, the chairman of Emocean Marine, and Hamad Kassab Bachi, the managing director, at the Abu Dhabi Yacht Show.
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ABU DHABI // The rich may not be getting richer as a result of the recession but they are still buying boats, or so it seemed at the Abu Dhabi Yacht Show yesterday. On the second day of the inaugural event at the Abu Dhabi National Exhibition Centre, one UAE company had already confirmed the sale of a multimillion-dirham vessel to a GCC national.

Erwin Bamps, the executive manager of Gulf Crafts, one of the UAE's largest boat and yacht manufacturers, would not disclose what the boat had sold for nor who had bought it. However, the company has two yachts on display at the show. They are privately owned and valued at Dh19 million (US$5.2m) and Dh32m. The yacht and super-yacht market has a peculiar customer base, he explained. "It's very high-end. These people are born rich. They are affected by the recession, but not so much as the middle class."

Notwithstanding the news of the deal, Mr Bamps said no company expected to go to a yacht show and "sell three boats". It was "basically a place to network". On a considerably smaller scale, Emocean Marine was attracting attention on the marina with the Voodoo27 family day boat, which sells for between Dh190,000 and Dh280,000. Emocean was officially launched only on Wednesday, then sold seven boats on the first day of the yacht show, according to Hamad Bachi, the managing director.

Although it might seem like the wrong time to get into the boat business, the partners behind the company actually accelerated their business plan as the economic downturn picked up speed. "Thinking short-term is what got the entire economy into trouble," said Mr Bachi. "You've got to think long-term. If there was one lesson out of the whole situation, it should be that, and if you're thinking long-term, then the current challenges present a huge opportunity of access to resources, talent, capabilities, supply."

Joseph and Patricia Dobie, who moved to Abu Dhabi from Liverpool, England, were among those checking out the sleek 8.2-metre model. Mr Dobi, 56, is retired and his wife, 43, is a nurse; the economic situation is not a factor in their search for a simple, easy first-timer boat. "We have security where we come from," said Mrs Dobie. "We are here now, we're here to enjoy ourselves ... we're going to have fun."

Saeed al Suwaidi, the 34-year-old Emirati owner of Aldar Motors, was at the show to gather ideas for his own boat. It is not going to be a super-yacht, but Mr al Suwaidi has a fair amount to spend - "between Dh300,000 and Dh600,00". Abu Dhabi Mar also looks likely to weather the economic downturn. Another new venture, the company was launched to convert two retired UAE navy frigates into 142-metre and 136-metre yachts for two clients at an undisclosed cost.

As that work continues over the coming months, the company expects to take on new clients despite the recession. Jack Somer, the marketing director, said: "We haven't seen a direct impact in the Middle East, on the very largest yachts." One of the vessels drawing attention yesterday was the Dubawi, a 90-metre yacht owned by Dubai royalty and the largest on display at the show, which finishes today.

Kostis Antonopoulos Rothschild, managing director of Dubai's Platinum Yachtsz, which converted the Dubawi from a cruise ship, said since the downturn began they had one European client default on a plan to build an 88-metre yacht. "The client lost a large part of his wealth on the stock exchange and it was impossible for him to continue," he said. But for those who still have most of their assets, and there seem to be more of them in the Middle East, Mr Rothschild said a super-yacht was still seen as not only the ultimate luxury, but as a solid investment that would appreciate over time.

"I think we are in a region where we can really meet potential clients," said Mr Rothschild. "A broker was telling me the only people with money in the world right now are Middle Eastern people, Greeks and maybe some Russians."