Hong Kong sales of luxury yachts buoyant, but lack of spaces to moor them is holding the market back
City remains the boating capital of Asia, despite a shortage of parking spaces in private marinas and reluctance of bigger yacht owners to trust their craft to public moorings, say industry players
The yacht business has not been buffeted by the headwinds affecting other segments of the luxury market in Hong Kong, but it has not all been smooth sailing. Business is being held back by the city’s growing shortage of places for owners to tie up their boats.
The overriding theme at last year’s Hong Kong Gold Coast Boat Show, the largest such event in the city, was boating as an affordable luxury pursuit. The organisers, mindful of the slowdown in economic growth, were at pains to show that boating wasn’t just for the elite and that owning a vessel was well within the means of Hong Kong’s middle class.
Fast forward a year, and the Gold Coast Boat Show organisers needn’t have worried so much; the evidence from boat builders and brokerage firms is that demand for luxury yachts and humbler boats has held up in Hong Kong. However, industry players are in agreement that the industry is hamstrung by infrastructure issues.
“The biggest problem we have in Hong Kong is parking spaces. We just don’t have any left,” says Gordon Hui, the chairman of luxury-boat maker Sunseeker Asia. “The demand was strong up until two years ago, but then the spaces started to run out and the market slumped. When there are no parking spaces, the customers can’t buy.”
Hui’s view is echoed by Olivier Besson, chief executive of Asia Yachting, a firm that offers sales, brokerage and management services for luxury yachts.
“There is a lack of local infrastructure,” says Besson, although he stresses his company can “still guarantee a berth to all our clients”.
That Hong Kong’s private marinas are full is nothing new and not likely to change, according to Hui. There is some capacity at government-owned marinas, but it comes with caveats. Hui says the difference between private marinas like those at Marina Cove and Clear Water Bay in Sai Kung district, and Gold Coast in Tuen Mun, and government-owned typhoon shelters at Aberdeen and Causeway Bay may confuse new buyers.
“Private marinas use the pontoon system, whereas typhoon shelters use moorings. People worry that moorings are not as good at protecting boats, so people buying new boats, especially the expensive ones, are reluctant to use moorings.”
Despite lobbying from boat makers and owners, the situation is unlikely to change.
“The government is not very keen on giving private companies more space for marina development. There are bigger priorities and I agree with that, as private yacht spaces are not really a priority,” says Hui.
Tentative plans have been aired to develop a marina at the Kai Tak cruise terminal, but so far there has been little appetite for this from the government and the idea has yet to gain traction.
Still, the quest to attract people besides the super rich hasn’t been abandoned, and indeed Hong Kong has seen a small increase in the number of 30- to 40-foot self-piloted boats, which are more likely to find space in typhoon shelters than at private pontoons. Affordable boats range in price from HK$1 million to HK$4 million, about the same as a luxury European sports car and, like these, attract young professionals and families.
For Sunseeker and other luxury-boat builders the affordable market has become less important as the customers they target looks for ever bigger yachts.
“Our boats start at HK$8 million and measure in the 50- to 130-foot range. Four of five years go, we sold 60- to 70-foot, now it’s 80, 90, 100 foot and above. We’ve gone to the top end of the market rather than affordable,” says Hui.
In spite of infrastructure issues and the waxing and waning of the economy, Hong Kong retains its place as the centre of the boating industry in Asia, and is the largest market for luxury yachts, says Asia Yachting’s Besson.
He says the long-established yachting culture in the city will always underpin the market, but that fondness for the new also keeps demand high.
“Hong Kong often sets trends when it comes to new models,” says Besson, and points out that, in such a brand-obsessed place, the first models from international boat builders are often destined for Hong Kong.
The Gold Coast Boat Show was on hiatus this year, and will also take a break next year as the marina there is developed, but Hui says that might be a blessing in disguise. “It’s a buoyant market, but there are no parking spaces. We’d like to sell more if we could,” he says.