Companies in the yachting industry are split on how the slowing expansion of Gulf Cooperation Council (GCC) economies is affecting demand for yachts from Gulf buyers, boat owners said on Tuesday as the five-day Dubai International Boat Show opened.
Francesco P. Lo Monaco, chief executive of Safwa Marine, a subsidiary of Abu Dhabi Ship Building, said that he currently sees lower demand from customers from the region for the company’s luxury yachts. These vessels are normally above 20 metres in length.
“Ninety per cent of the demand [from Gulf buyers] is for small boats and 10 per cent is for yachts,” he said.
Low oil prices are expected to continue weighing heavily on the GCC economies with the average weighted real non-oil GDP (gross domestic product) growth moderating to 2.2 per cent in 2016, down from 4.1 per cent in 2015, according to the latest economic forecast from Abu Dhabi Commercial Bank (ADCB). The price of a barrel of oil has collapsed by more than 70 per cent since June 2014.
And then there are companies that are seeing stronger sales of luxury yachts from Gulf customers.
“At the moment we are not seeing any effects from [the low oil price]. What we are predicting this year is an increase in our sales in the Middle East,” said Kiran Jay Haslam, marketing director of UK-based yacht manufacturer, Princess Yachts, adding that he expects the Middle East to account for 13.5 per cent of its total revenue in the current year, up from 11 per cent last year.
“We have launched a few new big boats — a 35 metre, a 40 metre and a 30 metre product. We have already had customers from the UAE come to Dusseldorf to see the boats when they debuted and have already started discussions about the next product,” he said.
Greg Stinner, chief executive of Art Marine, a yacht dealership and marina operator in the UAE, said that his company has sold more yachts than mid-sized boats so far this year compared to the previous year, adding that the majority of its customers are Gulf nationals.
“We have not seen an impact [from the low oil price], reason being our business model has matured … we have at the moment in production a 100-foot Riva and a 30-metre Custom Line,” he said.
The show has attracted more than 800 companies from 55 countries and features 450 boats of different sizes. There are 39 boat launches at the show, including 16 global and 23 regional launches.