Mercato dei libri in Polonia by lonyoo


									                       Trade section of the Italian Embassy


             Market report
     Nautical sector – Yachts and
            super yachts

Macroeconomic country data ....................... 1
Sector definition ............................................ 2
Market assessment........................................ 2
Competition and Italy’s market standing..... 7
Distribution channel ...................................... 9
Sector related media and trade fairs .......... 11
Market forecast ............................................ 13

                                                                                                                   March 2010

                         EAU ICE Office                        ICE Istituto nazionale per il Commercio Estero
P.O. Box 2411                                                  via Liszt 21, 00144 Roma, Italia
Dubai Internet City – ARENCO Tower – Office # 506_508          T +39 0659921
 Dubai, UAE                                           –
 Tel: +971 4 4345280                                                                       Cod. Fisc. 80069170589 Part. Iva 02120151002
 Fax: +971 4 4220983
                    Trade section of the Italian Embassy

Macroeconomic country data

 Population, million                                               2008: 4.7
                                                                   2009: 4.7 (e)
                                                                   2010: 4.8 (f)
                                                                   2011: 5.0 (f)
 Gross Domestic Product (GDP nom.), US$ billion                    2008: 245.5
                                                                   2009: 230.6 (e)
                                                                   2010: 266.3 (f)
                                                                   2011: 291.1 (f)
 GDP per capita, US$                                               2008: 52068
                                                                   2009: 49410 (e)
                                                                   2010: 55946 (f)
                                                                   2011: 58796 (f)
 Real GDP growth, % change y-o-y                                   2008: 7.4
                                                                   2009: -2.9 (e)
                                                                   2010: 2.8 (f)
                                                                   2011: 5.2 (f)
 Consumption growth, %                                             2008: 10%
 Inflation rate                                                    2008: 12.3%
                                                                   2009: 1.56%
                                                                   2010: 2.5% (f)
 Prime rate, % (16.02.2010)                                        1.00%
 Goods Exports, US$ billion                                        2008: 239.2
                                                                   2009: 189.5 (e)
                                                                   2010: 223.1 (f)
                                                                   2011: 243.2 (f)
 Exports, % change y-o-y                                           2008: 30.7
                                                                   2009: -20.8 (e)
                                                                   2010: 17.7 (f)
                                                                   2011: 9.0 (f)
 UAE Exports (non-oil) to Italy, in thousand Dh. and kg            2008: 102,899,641 (Weight)
                                                                   2008: 477,278,020 (Value)
 Imports, US$ billion                                              2008: 176.3
                                                                   2009: 149.8 (e)
                                                                   2010: 157.3 (f)
                                                                   2011: 169.9 (f)
 Imports, % change y-o-y                                           2008: 33.4
                                                                   2009: -15.0 (e)
                                                                   2010: 5.0 (f)
                                                                   2011: 8.0 (f)
 UAE Imports from Italy, in Thousand Dh. and kg                    2008: 845,357 (Weight)
                                                                   2008: 21,759,907(Value)
 Trade balance, US$ billion                                        2008: 62.9
                                                                   2009: 39.7 (e)
                                                                   2010: 65.8 (f)
                                                                   2011: 73.3 (f)
 Trade balance between UAE & Italy, US$ billion                    2008: 62.9
                                                                   2009: 39.7 (e)
                                                                   2010: 65.8 (f)
                                                                   2011: 73.3 (f)
 Unemployment, % of labor force                                    2008: 4%
                                                                   2009: 4.5%
 Exchange rate AED/USD (16.02.2010)                                3.6720
 Exchange rate AED/EUR (16.02.2010)                                4.9948
 Salary, monthly average for Emiratis, EUR                         2009: 7,775.00
 Household income, monthly average, EUR                            2009: 3,894.00
 FDI, annual growth                                                2008: 29%
Source: IMF, UAE Central Bank, Ministry of Economy

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                                1
                    Trade section of the Italian Embassy

The United Arab Emirates (UAE) is made up of seven emirates and is part of the
Cooperation Council for the Arab States of the Gulf (GCC). The fallout from the economic
crisis is also felt in the business environment, although the impact should be largely
positive in the long term. After a precipitous drop in economic growth from 7.4% in 2008 to
an estimated -2.9% in 2009, real GDP growth is projected to climb to 2.8% in 2010 and
5.2% in 2011. In 2009 the UAE had a GDP of US$ 245.5 billion, composed by the
following sectors: Agriculture (1.1%), industry (48.6%) and services (50.2%). Main trade
partners of the UAE are China, India, USA, Japan, Germany, Italy, UK, and Saudi Arabia.

Sector definition

This report provides a comprehensive overview of the sector “Yachts and Super yachts”
within the nautical sector of the United Arab Emirates. The focus is on the local production
as well as local trade of imported yachts and super yachts.
Generally yachts can be sub categorized as follows:

 Size                                  Product description
 Under 20ft (6m)                       Day sailing yachts, no cabin, trailer yachts
 Under 30ft (9.5m)                     Weekender yacht, generally basic cabin, basic appliances and plumbing,
                                       often trailer yachts
 25 to 45ft (7 to 14m)                 Cruising Yacht, sufficient amenities to live aboard, berth space required
 82ft+ (25m)                           Luxury yacht, luxurious finishes/amenities to live aboard an extended
                                       period, berth space required
 150ft+ (50m)                          Super Yachts, high end finishes/ nautical technology /many cabins, berth
                                       space required

A distinction can further be made between sailing and motor yachts.

The key information in this market report is supported by findings from secondary literature
and selected interviews.
This report focuses on the following sub sectors:

 HS CODE                             PRODUCT
                                          Cruise ships, excursion boats
 89011000                            Excursion boats and similar vessels in principal
                                   Yachts and other vessels for pleasure sports
 89039100                            Sailboats, with or without auxiliary motor
 89039200                            Fiberglass boats with mobile outward engines
 89039910                            Motor boots from fiberglass other than out boarder
 89039920                            Fiberglass boats without engines

Market assessment

International production

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                                                   2
                    Trade section of the Italian Embassy
The global demand for private (luxury) yachts has been increasing over a five-year period,
until 2009.
An immense growth in recreational boat ownership took place in 2005 and order books
grew by 28%. A further global growth of 8% in 2006 and 10% in 2007 created an
international industry, worth US$25 billion in 2007.
The customization rate in the global yacht industry is, with 76% of yachts being custom
ordered and only 24% of yachts being built with no prior customer, very high. Thus globally
on average customers often accept lengthy production processes of up to 36 month and
tend to hold on to their yachts for years.
In addition to yacht ownership, yacht chartering, topping the 2006 list of the most popular
and most expansive activity for millionaires with a net worth of more than US$ 10 million -
with a private yacht charter costing an average of US$200,000-250,000 per week - created
additional demand for the yachting industry.
As with many industries, the global yachting industry has seen consolidation over the last
years. The takeover of Italian Ferretti Group by UK buyout house Candover in 2007 was
one of the most prominent ones. More consolidations are expected due to the current
economic environment.
Over the past years until 2009, the yachting industry became a popular target for
investment funds, with increased buying power in the developed world, as well as in
emerging markets, such as the UAE, promising huge potential for further growth.
Italy is dominating the yachting industry, with Azimut-Benetti topping the list of leading
shipyards, Feretti Group, Rodrigues Group, FIPA Group, Perini Navi and Hatteras being
constant Top 20 shipyards, as per yachts produced worldwide.
The yacht industry is affected by the global economic downturn after the financial crisis
with a global negative growth of 30% to 35% in yacht orders in 2009. Prices have fallen
ever since, to meet the reduced demand.
Until the last quarter of 2008 the super yacht market seemed to be not affected by the
global economic slowdown. Very high net worth individuals, that had the wealth to spend
many millions on their yachts, were hoped to still have enough resources. The tightening
of credit however brought cancellations of orders in this sector alike.
Next to the slowdown in the manufacturing of yachts, the 2008 charter market reduced in
volume, with many yachts’ running costs no longer funded by charted income, being made
redundant. Similar to the property market, the concept of owning a super yacht and
making a profit on sale, changed in 2008.

Local production
Due to the Emirates waterfront location and culture, the local nautical sector is vast,
featuring a multitude of companies working in the maritime industry. Seen as a key
industry to the UAE, the inflow of FDI is seen as critical to further develop the sector, thus
Free Trade Zones for the maritime sector have been created all over the Emirates.
The Middle East has about 150,000 yachts in total, including 12,000 in the Arabian Gulf.
About 80 factories across the GCC are in the nautical industry, accounting for 8% of world
production. Most of these companies however are specialized in fishing boats, smaller day
sailing yachts and modern dhows. Kuwait has the largest number of boats per capita; most
are however trailer boats, since the berthing capacity of Kuwait currently lies below 1,800.

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                             3
                    Trade section of the Italian Embassy

Critical for the development of the yachting industry in the UAE was the creation of
marinas and expansion of berth capacity from practically zero in 1990 to 2,500 berths in
2010. This has been fostered by public and private entities alike and today, the UAE have
the biggest number of marinas in the GCC, with three new Municipality marinas to be
opened in 2010 in Dubai alone, in addition to eight existing ones in the Emirate. Abu Dhabi
opened one of the UAE´s biggest marinas last November, YAS marina, and further plans
to expand its currently limited berthing capacity over the next years.
The UAE sector of yacht and super yacht builders is fairly small, with only about ten
companies that can compete, in terms of product quality and design, on an international
level. One company specializing in the production of super yachts is in the market. Further
three yacht builders that compete globally are based in Qatar and Bahrain. Local
shipyards however offer their customers good products at a much lower price than
imported products. Margins for local producers are by trend shrinking; since today’s local
clients require higher technological standards and quality.
Dubai has been the main trade point for yachts within the UAE in the past; local production
however often takes place in other Emirates.
Dubai is home to the world’s largest super yacht; furthermore a total of eight super yachts,
cruising under a GCC flag, currently rank amongst the TOP 20 of the worlds longest
The global economic crisis has led to a negative growth of the nautical industry in the
UAE, mirroring the global industry decline, with 30% to 35% less orders having been
placed in 2009. Prices are falling in the UAE, however not as much as elsewhere, due to a
still relatively small number of pre-owned yachts on the market, since the UAE is such a
young market and other reasons to be elaborated upon later.
A finding from the field research conducted for this report is that there has been almost no
sales movement in the local industry 2010, both for new and pre-owned boats.

Import/export data
The following statistics are unfortunately only available for Abu Dhabi and over a limited
period of six month.
Between January and July 2009, yachts worth of 12,193,027 AED have been imported to
Abu Dhabi, most of which are sailing boats and fiberglass boats with outward engines. It
has to be noted, that since yachts are high value items, the sale of one unit can distort
statistics. Hence, the conclusion, that sailing yachts are traded locally above the global
average of 8% sailing yachts versus 92% motor yachts, would be wrong.

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                           4
                    Trade section of the Italian Embassy

             EXP, IMP & Re-EXP YACHT & SUPERYACHT SECTOR JAN-JUL 2009, Abu Dhabi





                                                                                                            IMP VALUE AED
                                                                                                            EXP VALUE AED
                   1.000.000                                                                                RE-EXP VALUE AED


                                    Excursion    Fiberglass     Fiberglass    Motor boots   Sailboats,
                                    boats and    boats with   boats without   from fibar with or without
                                 similar vessels   mobile        engines      glass other auxiliary motor
                                   in principal   outward                        than
                                                  engines                     outboarder

The export rate of the UAE´s yacht and super yacht industry is estimated to be around
25% of production in 2009. An important fact is that almost all exports have taken place to
other Gulf nations with Iran, Oman and Qatar topping this list.
No reliable export data is available for other years; the research conducted for this report
suggests that exports were at a peak in 2007, with for instance Gulf Craft, as a premiere
local producer, delivering a record of approximately 500 units into other Gulf nations.
The main importer of yachts into the UAE is the USA with 47% of all imports coming from
the United States, followed by Italy, accounting for 14% of all imports. The Netherlands
ranked third, with the import of one sailing yacht accounting for 6% of all imports during the
first six month of 2009,
17% of all imports were re-exported primarily to other Gulf nations, such as Iraq, Oman,
Qatar and Saudi-Arabia.

Local consumption
The main luxury yacht client profile is represented by individuals who belong to a high
social class in the world of finance and business, with high incomes and wealth, a medium
to high level of education and with behavior and interests evolving around the topics
entertainment and the beautiful things in life.
Due to a small number of marinas available in the UAE before 2006, only about 1,500
yachts have been owned in the UAE.
With projects like Dubai Marina having been under construction, new waterfronts under
development and more expatriates coming to Dubai, the consumption of yachts increased
and had its peak in 2007, by when berthing capacity had increased.

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                                                               5
                    Trade section of the Italian Embassy

Year              Before                2006               2007      2008      2009          Forecast
                  2006                                                                      2010
Number of 1500                              +100             +200      +100    +65 yachts    +35 - 60
yachts    yachts in                        yachts           yachts    yachts                  yachts

Further marina development enabled a slightly reduced growth in 2008.
With the financial crisis bringing a global economic contraction, the consumption in 2009
saw negative growth by about 35%. Until 2009, berthing capacity can be determined as
the limiting factor for the consumption, since the availability of berthing creates the
infrastructure critical to the yachting industry.
It has to be noted, that the local consumption has some aspects that go against global
consumption- and market trends.
The local culture is not a “cruising culture”. There is a certain affinity towards dhows, as
they present a local heritage to many in the UAE. Recreational fishing on modern yachts
furthermore plays a role; recreational yachting is still a minor leisure time activity.
By trend however especially local males are becoming interested in cruising, since it is
perceived as an elitist sport and owning a yacht brings a certain prestige. Yachting as a
family recreation is slowly receiving more interest, whereas yachting already plays a role in
the business world, with a number of companies in the UAE owning boats in order to
entertain customers on these.
In Europe, the Caribbean and the US, yachting is popular and often done as weekend or
holiday recreation. Various countries with many destinations can be visited comfortably for
instance within Mediterranean or Caribbean waters.
The creation of landing stages for visiting boats, which are practically non-existing today in
the gulf region’s marinas and yacht clubs, can be seen as critical, in order to increase local
consumption. The development of more offshore destinations for yachts in the UAE, such
as The World and The Palm Jumeirah, could further become a driving factor for the local
yachting industry.
Interesting is that about 80% of boat owners in the UAE are first time owners. As a result,
an unusually high number of boats are not moving out of the marinas. As there is no
license required to pilot a yacht in the UAE, other than a license that can be compared to a
First Aid course, some boat owners seem to be too inexperienced and insecure about
taking their relatively large boats into open waters.
Opposed to a global customization rate of 76%, local potential boat owners often want to
buy products on the fast track, which is why dealers in the UAE often keep stock locally in
the marina. Due to the high capital bound in a yacht, this is a custom that is quite different
from global ones. With yachts being capital-intensive products and the industry being one
of successive growth rates, investment companies got interested in the UAE´s industry in
the past. Exclusive dealership licenses were awarded to financially strong clients after the
acquisition of a number of yachts and thus, some UAE yacht dealers today are baked by
investment companies.

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                                        6
                    Trade section of the Italian Embassy
The acquisition of yachts on stock put Dubai in part falsely onto the map of the global
yachting industry, since many of these by investors bought yachts - imported mainly in
2007, when local berthing became available - are still docking unsold in the local marinas.
These companies thus have immense capital tied up in the yachts, while facing high
operating costs. Berthing costs alone start in Dubai at around 40,000 AED and can easily
cross 200,000 AED annually, depending on the marina and the berth location within a
Although prices for yachts have globally, as well as locally come down, with local margins
oftentimes being reduced from an estimated average of 45%+ in 2007 to a moderate
25%+ in 2010, entities that hold excess stock often try to keep market prices artificially
high and still offer their 2007 models at 2007 prices, not taking depreciation into account or
bringing prices in line with other drops in asset prices. They rather hold on to their stock,
than sell at market price. This development will be interesting to follow over the next year.
After analyzing the United Arab Emirates market it is interesting to note the direction taken
by certain banks in the area such as HSBC Middle East and the Abu Dhabi National Bank,
which have developed specific financial products for yacht purchases.

The UAE is, second only to Saudi Arabia, the main recipient of FDI in the Gulf region. The
UAE received US$ 66.2 billion of FDI from 1998 to 2008, representing 19% of total foreign
investment in the region. In 2008, the UAE accounted for around 14.2 % of the total FDI of
about US$96.48 billion pumped into the Arab World. Most of the FDI in the UAE 2008
came from non-Arab nations. In 2009 and 2010 the FDI inflow is expected to decline due
to several factors, such as the slowdown or contraction in economies of the industrial
nations, which have been the major source of FDI for the Arab states in the past.
In the six-year period from 2003 to 2008, the UAE experienced its largest rise in 2008 in
terms of both, FDI project numbers and capital investment, with a 70% rise on project
figures, compared to 2007. In 2008, the UAE attracted 480 FDI projects, consisting of
US$4.8 billion of capital investment and the creation of over 87,000 jobs. This accounted
for a third of all project number, capital investment and job creation in the UAE between
Jan 2003 and Jan 2009.
FDI has taken place in the UAE´s yacht and super yacht sector, with about half a dozen of
international yacht builders having opened subsidiaries in the UAE, mostly catering to the
UAE, GCC, MENA and other African markets in the form of sales, marketing and service
centers. None of these international yacht builders however have invested in local
production facilities; few importers have set up service and maintenance facilities.

Competition and Italy’s market standing

Italy dominates the global yachting industry with 1,281 yachts having been built in 2007.
Italy is followed by the USA, having completed 787 projects throughout 2007.
Turkey is a newcomer amongst the Top 5 sourcing countries, while all other countries in
the chart below can be found in similar ranking positions in previous year’s statistics.
Germany is ranking sixth, with 233 units sold. China, ranking seventh is another emerging
producer in the marketplace, followed by established Taiwan and Denmark. New Zealand

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                             7
                    Trade section of the Italian Embassy
completes the list of Top 10 sourcing countries as per the 2007 statistics from industry
experts “Superyachtintelligence” (latest accurate available data).

           TOP 5 Sourcing countries of yachts 2007

                 UK                 255
                 263               yachts
                  s                                                ITALY
       NETHERL                                                     yacht
        ANDS                                                         s


                ITALY        USA         NETHERLANDS         UK       TURKEY

Italian yachts have an excellent positioning in the local market, especially thanks to their
contemporary design and luxurious, often minimalist, yacht interiors.
Italian products generally are associated with luxury. “Made in Italy” stands for well-
designed products; Italian fashion, leather accessories, jewellery, furniture, Architecture
and Interior design are successfully marketed worldwide.
Many Italian luxury brands are well represented, well known and liked in the UAE. These
positive associations towards Italian products and the prestige they bring reflect on the
yachting industry. Italian yachts are often first choice for a potential boat owner, even if
yachts from other countries may be first choice in terms of construction quality or
The positive standing of Italian yachts in the local market can be partly attributed to the in
terms of design, performance and thus local units sold, benchmarking brand Azimut. ART
Marine, founded only in 2005 and today one of the main yacht dealers in Dubai, represent
Azimut locally.
Successful Italian yacht designs are sometimes copied by local yacht builders, with
intellectual property rights locally not always protected, as they should be.
Local manufacturers furthermore often work together with Italian yacht designers, who are
based mostly in Italy.

Two major factors limiting local sales and success of Italian products are first of all, the
premium price of Italian yachts. Unfortunate for the pricing of Italian yachts were currency
shifts in 2008 and 2009, which made European yacht builders face stiff competition from
yacht builders with US$ pricing, since the international yachting brokerage market’s
dominant currency is the US$. A strong Euro makes sales of new yachts more difficult to

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                             8
                    Trade section of the Italian Embassy
Italian and other European yacht builders, as their product is automatically overpriced.
With currency shifts bringing uncertainty for 2010 as well, more European market
participants could be failing.
Local yacht builders can offer lower prices, since they have a competitive advantage
towards European manufacturers, thanks to manufacturing in a US$-pegged environment
as well as by having less total manufacturing costs of about 40%, mainly due to the
abundance of low cost labor in the UAE.

The second factor limiting the success of importers versus local producers is that
relationship building and management is crucial to be successful in a high context culture,
such as the UAE. Local yacht builders, mostly employing local and Arabic nationals, are
oftentimes successful by selling into their strong social networks.

It has to be noted, that the number of Italians working in the local industry, is exceptionally
high. Many management positions of local subsidiaries as well as local yacht dealers and
local manufacturers are filled with employees, holding an Italian passport. High quality
service and maintenance of yachts seems furthermore to be a downstream industry
dominated by Italian freelancers.
Major local manufacturers of yachts are Gulf Craft, Al Sayer Yachts, Emirates Boats and
Al Hareb Marine; major importers of yachts are ART Marine (Azimut, Benetti), Al Yousuf
(Yamaha), Luxury Sea Boats (Sessa Marine, Carnevalli Yachts), Leisure Marine (Princess
Yachts), Macky Marine (Formula Boats, Monterey Power Boats), Sea Pros (Ferretti Group
with Riva and Perching; Regal, Itama), Emirates Yachting (Bayliner, Trophy). Importers
with a local subsidiary are for instance Sunseeker Middle East and Hatteras Collection
Middle East.

Due to the current economical environment, the local industry has seen some reduction in
workforce in 2009. The local premier producer, Gulf Craft, made 300 employees redundant
in 2009. Local yacht dealers and subsidiaries of importers are expected to further scale
down the local workforce.

Distribution channel

Import and distribution of yachts and super yachts is carried out in the UAE by the private
sector. Most yachts arrive with yacht shipping companies that organize and manage the
project of shipping a yacht, thus yachts enter the gulf nations primarily via seaports.
The UAE regulates, that boats imported are subject to a 5% import tax. Further indirect
taxes within the licensing processes however easily double costs for importers above the
5% import tax.
The vast majority of the international yacht builders operate in the GCC via yacht dealers
and brokers. Often, these dealers are licensed for a couple of international brands. With
some yacht dealers owning exclusive dealerships in the neighboring countries, the re-
export rate of yachts in the UAE is quite high.
Only a minority of agents, that trade international brands, also trade local products as part
of their product portfolio. Almost all dealers however sell pre-owned yachts from their

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                              9
                    Trade section of the Italian Embassy
portfolio, as well as from outside their portfolio, since per trend yachts in the gulf region
have been upgraded more frequently, than elsewhere in the world, due to the local number
of high net worth individuals.
It is very likely to sell a second boat to the same customer within a couple of years, given
that the boat quality, the dealer performance and service are satisfying. Thus dealers are
working in the pre-owned business, in order to make new sales. Many agents offer “one
stop shops”, officially selling new and old yachts, taking care of financing a boat, offering
boat charters, handling the registration of the boat, offer service and maintenance
contracts and oftentimes sell the berth along with the yacht. It has to be pointed out, that
most yacht dealers subcontract a lot of the activities above and local subcontractors,
especially in the service and maintenance area, seem to not always have best reputations.
Local manufacturers have the competitive advantage of offering a much more
comprehensive after sales service, which in turn oftentimes generates new sales.
Since good agents and distributors seem to be in short supply in the marine industry of the
gulf region, good quality management in assessing possible dealers needs to be done and
manufacturer support needs to be budgeted for, when importers want to be successful in
the market. After sales service, relationship management and product support is a most
important aspect and a good reputation is seen as more critical and can give more in
return than any amount of promotion, as per findings from interviews held with local
industry experts.
Next to direct sales via dealers and direct distribution from local producers, some co-
brokers can be found in the market. These are mostly companies that are in the chartering
business or have other business in the nautical sector. Since the UAE regulates the
competition by allowing only exclusive dealerships, these co-brokers can only import via
the brands official dealer and thus are generally not competitive enough to generate a
considerable number of sales.
In the pre-owned yacht market, homepages, such as or, are
further distribution channels. Recently however, even dealers are trying to use these
portals in order to generate interest for new yachts. Publications, such as the “Boat trader”
(UAE) in print and online versions furthermore are used as distribution channels for new
and pre-owned boats alike. In order to market new yachts, these trading publications and
Internet pages can however rather be seen as marketing activity to create interest, give
information and enable comparisons to other yachts, than a distribution channel. As
elaborated upon earlier, relationship building and management plays the vital role locally in
order to sell capital-intensive goods, such as new yachts.
The chartering market in the UAE is, unfortunately for the local industry, highly regulated
and restricted and thus plays, opposed to past years’ trends in Europe, the US and
Caribbean, almost no role to promote sales in the local yachting industry. As chartering
brings growth potential for the local tourism industry, the government is currently reviewing
regulations that could liberalize this market.

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                           10
                    Trade section of the Italian Embassy

Sector related media and trade fairs

a) Media

Title                         Boat International Middle East (Arabic)
Frequency                     6 p/a
Circulation                   10,000 copies, 27% of which are subscriptions
Target group                  Affluent super yacht owners in the ME, high net worth individuals with
                              high disposable income, including members of the royal family
Topics                        Onboard reports, luxury lifestyle, industry insights, destinations,
                              charter & brokerage
Boat International Middle East was launched in 2008 and is the only Arabic language
luxury super yacht magazine in the Middle East. Its sister magazine, Boat International,
was launched in 1983 in the UK and has established itself as the number one magazine
for the global super yacht market. Boat International is the globally acknowledged authority
in its field.

Title                         Boat Owner Middle East
Frequency                     Monthly
Circulation                   3,251 copies, of which 9% are subscriptions
Target group                  Males, average income of 40,500 AED per month, individuals that
                              take up to 4 holidays per year, majority owns their own boat
Topics                        International and local features, tests, awarding the gulf industry,
                              destinations, boat races
Boat Owner Middle East is one of the region’s leading leisure marine publications. The
magazine captures glamour, thrill and excitement of boating. It covers topics from dinghies
to super yacht, high octane racing to sail cruising.

Title                         Boat Trader (UAE)
Frequency                     Monthly, along with auto trader magazine
Circulation                   5000 copies per week for auto trader
Target group                  Male boat enthusiasts, majority owns their own boat
Topics                        Trade of pre-owned boats and new boats

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                                  11
                    Trade section of the Italian Embassy
Boat Trader is a sister magazine to Auto Trader and is published for the Middle East
countries comprising the UAE, Saudi Arabia, Oman and Qatar. Boat Trader has been
launched in 2006 and is attached with Auto Trader magazine every month. Boat trader
features articles on new boats, accessories and contains a wide variety of classifieds,
which include both new and used water vessels ranging from small jet-skis and
speedboats to large luxury yachts and liners.

b) Principal fairs in the sector

Name of fair                  Dubai International Boat Show
Place                         Dubai, Mina Seyahi Marina
Frequency and                 Yearly, 18th edition, 09. - 13.03.2010
next edition
Short description             The Dubai International Boat Show is still the most important and
                              established Yacht show in the Middle East. The exhibitor’s organizers
                              state to constantly experience a high volume of sales. Yachts of all
                              types and sizes are displayed; international manufacturers, yacht
                              dealers, fishing equipment, marine accessories and diving gear are
                              amongst the exhibitors.
Exhibition cost               281 US$ per square meter, 6,240 US$ for 12m berth

Name of fair                  Abu Dhabi Boat Show (ADYS)
Place                         Abu Dhabi, Yas Marina
Frequency and                 Yearly, launched in 2009, dates for 2011 edition to be announced
next edition
Short description             The Informa Yacht Group (IYG), the company that organizes the
                              most prestigious yacht show in the world, the Monaco Yacht Show,
                              organizes ADYS. ADYS is targeting the super yacht sector and very
                              high net worth individuals, such as the regions royal families. It is the
                              biggest gathering of super yachts between 30 to 100meters within the
                              Middle East.
Exhibition cost               500 US$ per square meter, 8,000 US$ for 12m berth

Name of fair                  Knotica Boat Shows
Place                         Abu Dhabi, Saudi Arabia, Kuwait and Bahrain
Frequency and                 Yearly, launched in 2008,
next edition                  Abu Dhabi: to be announced
                              Kuwait: 24. – 28. 03. 2010
                              Saudi Arabia;

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                    Trade section of the Italian Embassy

Exhibition cost               220 US$ per square meter, 6000 US$ for 12m berth
Short description             The Emirates International Boat Show, as well as the others are
                              organized by Knotica Holding in Abu Dhabi and are planned as a
                              “lifestyle experience” encouraging potential buyers to come. The
                              shows shall provide a platform for trade. Knotica wants to bring the
                              products closer to the home of high net worth individuals and thus
                              organizes exhibits around the gulf.

c) Other marketing instruments
As elaborated upon earlier, the way to success in the local yachting market is most
importantly done via relationship management. Thus one-on-one marketing plays a vital
role in the industry.
Additionally however, VIP events for product launches or to introduce facelifts of an
existing yacht are common in the industry. Print advertisings in local boat and luxury
magazines are further commonly placed.

Market forecast

The current market situation in the industry is very negative, with no mentionable orders
having been placed in the first two months of 2010 in the UAE. The Abu Dhabi Yacht
Show, catering to the high-end luxury yacht and super yacht market, and more importantly
the International Dubai Boat Show in March 2010, are seen as market indicators and are
hoped to stimulate the local market.
The market forecast of local experts ranges from as low as 30 units to be sold in 2010 to
up to 65 units possibly sellable in the UAE over the same period.
Also depending on when the global economy will recover, a forecast for the year 2011
offers many more uncertainties. Quantities of yachts to be sold however are expected to
exceed the 2010 ones in the UAE. A lot of 2005-2007 yachts are expected to be upgraded
and on the market by 2011, creating a relatively big pre-owned yacht market. With the old
yachts hopefully being sold, by 2012, local yacht builders as well as importers believe the
market to pick up again.
With infrastructure for the marinas in Oman, Qatar and Bahrain under construction,
moderate growth is expected in these regions, possibly before 2012. Kuwait as a more
mature market than the previously named is further expected to see upgrades creating
demand for new yachts.

Consumer trends and potential growth

As elaborated upon earlier, the local leisure culture sees a shift towards cruising, with
destinations such as The World or Abu Dhabi marinas creating interesting places to cruise
to. Young Arabs, as well as new expatriates are of all UAE residents, most likely to
become new boat owners.
The UAE´s and gulf region’s consumer want by trend well designed products, well fit out
interiors, latest entertainment technology on board, and most importantly, yachts that are

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                                13
                    Trade section of the Italian Embassy
easy to operate, since many first time boat owners are amongst the UAE´s. Local
consumers furthermore want good service and maintenance for their boats and expect
good service from the local marinas, to make their lives as boat owners as easy as
Rules and regulations in the UAE generally should be reviewed in order to help the
industry grow. The registration process for a yacht, especially for pre-owned boats, needs
to be simplified. Regulations to take a boat out of the marina and enter open waters need
to furthermore become less restricted.
The completion of the prominently in Jumeirah located municipality marinas in Dubai might
increase interest into yachting. Water based events, such as races and boat shows are
increasing by number and are being made more public by municipalities, which helps to
create more awareness of the yachting industry. A further increase in events could foster
the industry even more.
The creation of affordable berth facilities also could help the UAE´s market to grow,
especially the segment for smaller yachts, between 20 to 45ft length, offers potential.


    •    Personal interviews with:
    •    Mr. Toby Haws, Business Development Manager of Hatteras Collection and Ex-
         Editor of Boat Owner Middle East, Dubai (23.02.2010)
    •    Mr. Donald Starkey, Yacht Designer and Owner of Starkey Design, Dubai
    •    Ms. Hakima, Business Development Executive of Sayer Yachts, Umm Al Quwain

Statistics on UAE:
ract/Documents/group%202008/ch5-Industry2008.xls, 09.02.2009
stract/Pages/sa2008.aspx, 09.02.2009
109&language=ar-AE, 09.02.2009, 22.02.2010, 22.02.2010

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                        14
                    Trade section of the Italian Embassy,
630426a2.aspx, 21.02.2010, 22.02.2010, 22.02.2010

United Arab Emirates, Market report: NAUTICAL SECTOR, March 2010                          15

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