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News: The Real Truth – Are India and Dubai the Emerging Yachting Markets?

March 11, 2010 by Superyacht News
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Mike Derrett from the yacht fraternity is one person who is almost present at every significant yacht event. He had made suggestions to the Korean government and provinces, discussed with the Middle East and many other boat show organizers. Recently, he has been in association with the Indian organization formed of 80% of its recreational boating industry. Today, it is very difficult for any one person to explain the real state of affairs of the developing markets and the main players in yacht construction.

Despite a fall in the number of exhibitors by 5-10%, the Dubai Boat Show had been highly impressive with the presence of almost 24 superyachts. According to Mike Derrett, though India has high potential and wealth for the world’s biggest democracy, it has chances of obstructing the progress of the yachting industry by way of resistance from different community organizations who prevent marina development at every stage. Even though there is a rich market division buying boats and water craft of all variety and thousands of kilometers of Indian coastline and waterways are worth visiting, the development in the country might be hindered by bureaucracy in government circles and in the industry itself.

India lacks real marinas. Mumbai is the only major point of boating for people who buy boats. In front of the Gateway of India, there are close to 150 moorings. However these are generally full of big luxury pleasure craft. Goa devoid of the world class amenities fails to become a permanent marina. Though officials have been striving to make it a viable option for yachting, several obstacles have hindered their progress.

The option of waterfront real estate becomes very costly where major part of it is government owned. In addition to this, there are multiple objections raised whenever an investor sets plans for a grand project, leaving all in the boating industry dismayed.

Even the latest Mumbai International Boat Show which functions with assistance from the government support was not a success owing to the political scenario of the nation. Only a few exhibitors were present at the event which created unnecessary furor and local hype – boasting it to be the ‘explosion’ of luxury yachting in India. However, no post show information was disclosed to the media.

It is a long way before India can stand as a powerful competitor for its Med and Caribbean counterparts as a superyacht location. Close to 30 dealers, brokers and marine businesses, who felt isolated and ignored by the organizers of MIBS dispersed and made their own group by name of the Indian Marine Federation. Derrett directly consults with this group. IMF has just recently come together with ICOMIA to plan many events to reveal their members’ products.

This aims to hold ‘IMF Boating Days’ to give the Indians a feel of the boating lifestyle of this region. In spite of experiencing difficulties due to the organizers of MIBS, they are determined to finalize on the venue for conducting the upcoming IMF ‘Boating Days’ program on 19th – 20th March.

On the flip side, the six Gulf nations have witnessed a tremendous development in their yachting markets in the last five years. In fact they have been financially strong due to the high revenues from oil for investing in substantial infrastructure projects in all of the countries.

Off lately, everyone in the world believed that the Gulf didn’t have to face the wrath of the global financial downturn. But if reports are considered, across the UAE Emirate of Dubai and in Kuwait during 2009, business confidence significantly plummeted with an all time peak in late November 2009. It was during this phase that it was declared that Dubai World, the investment group held by the Dubai Government had asked for a deferment of 10 billion US$ bond payment due on December 14th.

As a result, this developed an ambiguity on the financial stability of Dubai across the world although it was only partially improved when Abu Dhabi, the UAE capital Emirate, assisted Dubai to make the payment on time. Dubai is highly financially leveraged with borrowings totaling up to 80 billion US$ to sponsor the once rapidly growing real estate market. The probable reason in the fall in the economy of this nation had been the diminishing volume of leisure boat which is also apparent in some other Gulf countries. Kuwait at the other extreme of the Gulf from Dubai is traditionally the finest market in the Gulf for small boat sales but has had slow sales in 2009.

This region comprising of the six Gulf countries was touted to be the richest in marina development in the world with more than 100 marina developments underway. The future of several of these projects will have to stand the test of time and wait in this short term, at least for the upcoming two to three years to see the real estate markets pick up in the Gulf.

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