Yacht makers concentrate on selling multimillion-dollar boats

Boat builders are switching their focus to high-end buyers to replace declining sales of smaller craft.

The economic crisis is affecting the boating sector by squeezing out the buyers who would be interested in smaller boats.

Yacht makers are switching their focus to high-end buyers as the credit shortage begins to squeeze smaller boat buyers out of the market, industry executives say. Most exhibitors at the Dubai International Boat Show said they were looking at marketing larger motor yachts valued at up to US$6 million (Dh22m) and ranging in size from 40 feet to 50ft, rather than smaller boats of 20ft. They said sales in this section were stronger. "The market has changed now and the only people who can buy a boat are the ones who belong to royal families, and they always look for the largest boats," said Mohammed al Mazrooei, the chief executive of Al Mazrooei Craft, a motor boat maker based in Dubai. Before the crisis, buyers of smaller boats relied on bank loans. "Right now, the banks are not lending money too easily and I don't think anyone would take out a loan to buy a boat when they are at risk of losing their job," said Mr al Mazrooei. A number of distributors at this year's show are also trying to boost sales volumes by introducing new brands to the region. "This year we have brought a new Turkish brand of motor yachts called Numarine," said Alessio Tumbiolo, the chairman of ART Marine, the largest luxury yacht distributor in the Middle East. Numarine prices range from ?900,000 (Dh4.1m) for a 28ft model to ?3m for a 60ft boat. "Our prices are lower than any other brand by about 30 per cent and since demand in Europe is so much lower right now, given the fact that not many berths are under construction, bringing this brand to the Middle East was a great idea," Mr Tumbiolo said. But a shortage of berths is also holding back the yachting business in the UAE. Dubai has about 3,000 berths but plans to increase that to 20,000 in the next five years. "I know a lot of people that want to own yachts, but the fact that so many berths are still in the construction phase is slowing our business," Mr al Mazrooei said. Island Global Yachting, the luxury marina developer and management company, is building marinas in Dubai, while Aldar Marinas, a division of Aldar Properties, recently announced it would build about 3,500 yacht berths in 14 marinas across Abu Dhabi. The first four marinas will be on Yas Island and will accommodate about 1,000 boats. Like many in the industry, Mr Tumbiolo fears delays in property projects in the country will cause some berth projects to be put on hold. "The berth projects are directly linked with real estate projects and right now there are no confirmed dates on when anything will be complete, which will impact on business here," he said. "But given the fact that the boat culture in the region is still only six years old compared to Europe, where yachts have been around for more than 40 years, people here are still ready to jump into this addictive lifestyle." The Dubai International Boat Show, at the Dubai International Marine Club, ends on Saturday. [e-mail]