Financial storm hits leisure boat sales

March 29, 2009

, DUBAI, Mar 29 – Sales of luxury and leisure vessels are on the rocks in the Middle East, where owning a boat for cruising, entertaining or fishing is seen as a status symbol, industry officials say.

Marine consultant Mike Derrett estimates that boat sales in the Middle East will halve in the next one to two years, down from 1,200 boats sold last year and 1,500 sold in 2007, due to the global economic downturn.

Despite the market hitting the doldrums, however, the effects of the credit crunch will be gentler in the Middle East than in the United States or Europe, where sales are expected to plunge by 75 percent, he predicts.

"Things are more likely to bounce back here … There is a lot more growth potential here and in Asia," Derrett told AFP.

Luxury boats showcased at a recent international boat fair in Dubai drew amazement from spectators, but few were persuaded to dig into their pockets and splash out.

"Haven\’t you heard? There\’s a financial crisis going on," Max Wilchefski 30, an Australian construction design manager, told AFP at the Dubai International Boat Show — the biggest annual boat show in the Middle East and one of the top five in the world.

"We\’re dreaming. We\’d love two of these \’Out Of Limits\’ racing boats," said Wilchefski\’s friend Rick Vinantuono, 38.

Both said however they would stick to just "looking around" — which exhibitors said had been the gloomy refrain of this year\’s show.

After enjoying years of rapid growth as a business and tourism hub, Dubai, one of the seven emirates forming the United Arab Emirates (UAE), has been the hardest hit in the region by the global financial crisis.

At this month\’s boat show, 721 exhibitors from 50 countries displayed more than 400 boats on a sprawling space of 85,000 square metres, the size of about 17 football pitches.

However, the number of exhibitors was 11 percent down on the 810 who pitched up in 2007, according to show organisers, who added that around 26,000 people visited the exhibition this year, down from nearly 27,500 last year.

Saeed Harib, the chief executive officer of the Dubai International Marine Club which hosted the event, acknowledged that the global credit crunch had affected sales.

Among those who did attend, however, were a number of boat-loving royals from the UAE and neighbouring Gulf countries but whether they splurged out or not has not been revealed.

Glitzy leisure craft ranged from luxury yachts to speed boats, including the "Quantum of Solace" — the power boat featured in the latest James Bond movie of the same title.

Watersports and leisure crafts are popular in Dubai, which boasts year-round sunny weather and sandy beaches overlooking the azure waters of the Gulf.

This year\’s highlight was a super yacht pavilion, where mega industry names as Abeking & Rasmussen, Amels B.V and Sunseeker among others displayed their latest models, 19 pieces in all, compared to 10 displayed last year.

Ali al-Jafla, managing director of Sunseeker Middle East, proudly showed visitors around the lavish Sunseeker 38 Metre super yacht, which features neatly crafted bedrooms and bathrooms on each of its three decks, a lounge and a dining room with marble floors covered with fluffy rugs.

The price tag for such luxury yachts ranges from 22 to 24 million dollars.

"No doubt the economic downturn has affected business," Jafla said. "It\’s hard to judge what will happen next."

Sunseeker\’s sales at the show generated close to 20 million dirhams (5.44 million dollars), Jafla later announced.

Not everyone has been negatively affected by the economic downturn.

"On the contrary, we have benefited because the prices of building materials have dropped," said Sultan al-Naeimi, chairman of Premier Composite, a UAE manufacturer of sailing yachts.

"We have been affected by the crisis to a small extent, but we already signed contracts and we\’re doing fine," he said.

And interest in leisure boats is still strong, despite the lack of sales.

For the first time, the UAE\’s capital Abu Dhabi this month held its own boat show, with around 100 exhibitors from 26 countries showcasing 20 of the world\’s most luxurious super and mega yachts. And according to local media reports, the show drew good crowds daily.

For marine consultant Derrett, the leisure boat industry in the Gulf region is being becalmed not only by the financial crisis but also by a drastic lack of berths.

He estimated that between them the six Gulf Cooperation Council members — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — now have around 9,000 berths, providing only limited space for the estimated 44,000 boats needing mooring.

Plans are underway, however, to build another 7,000 berths by 2012, he said.

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