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Superyachts for Everyone

Superyachts for Everyone

Grandpa and Nanna help the young boy work on his Lego City in the lounge. One of the crew serves up glasses of orange juice for the grandparents – no, not for the young boy, according to Nanna. Up on the deck, Mum and Dad sit at a table for 8, with a spread of a few loaves of bread, half-full jug of orange juice, with unfinished slices of fruit on some of the plates. Serviettes and cutlery are all out of place, like how it is when people eat. The young girl runs back to the room to change into her swimmers, while Nanna helps prepare the young boy for swimming. The sun is setting, and Mum and Dad spend time with the boy on some writing. Nightime comes, and the young children are in bed, with Dad reading a bedtime story – about the ocean of course! Next scene: the adults just chilling out with wine and cocktails. Nothing special in these scenes – except that all these happened in a superyacht. 

The video captures one’s imagination. Its message: This is how people are like in a superyacht – a real family enjoying their holiday in Spain. And the staff and crew doing what they would normally do in a yacht on a cruise. Nothing looks contrived, nothing that looks cliché. A vicarious experience for the rest of us as we watch the Princess Yachts M Class video.

If we are able to place ourselves in the shoes of these characters, which one would we be – the boat crew, the service staff, or the owners? Or maybe we are the characters behind the scenes who work on the boats to make these ultra-high net worth (UHNW) individuals enjoy their pride and joy safely and in extreme luxury? Or perhaps we are just one of the members of the community who chance upon talking to one of the owners or crew in our local coffee shop, and proudly telling him or her of what life is like in our own town or city? There is a network of people who make this industry work, and it is not just the builders and the owners. And it even includes you and me, the non-UHNW ordinary person, whose hometown or city may be visited by these superyachts.

Superyachts are defined in Australia as luxury vessels with a master and crew, carrying 12 guests or fewer (not including staff), and with a minimum length of 24 metres, not carrying cargo, and are used for sport or pleasure.

After years of campaigning to encourage growth in Australia’s superyacht market, many collaborative engagements have grown that help in increasing the country’s share of the global market, and assist in improving the superyacht services and infrastructure to attain global standards. This year, three superyacht events were held on the Gold Coast – Trade 2018, Australian Superyacht Rendezvous, and the ASMEX Conference.

How is this relevant to us, you ask? When you live in an area where tourism plays a big role in the economy, it is inevitable that the luxury travellers will be one of the target markets. Unlike the cruise ship sector that relies on mass tourism, the superyacht market measures the economic value based on how much the UHNW persons will spend in one location and how much money will be spent on servicing the yacht per year, which on average would be around 10-20% of the value of the yacht – a significant value that will benefit the locality’s service providers and related businesses.

SUPERYACHT DESTINATION: AUSTRALIA

Australia is a dream destination for many. To the rest of the world, we are an exotic destination, blessed with the perfect climate, clean air and waters, rich natural offerings, and lots of “elbow room”. The infrastructure is modern and of global standards – for both the resident and the visitor. And while the country offers the modcons for the visitor, there is also always the option to go “off the radar” and be in an isolated area, and still have the ability to enjoy the remoteness without security issues. All these are very attractive to the superyacht customers, whose privacy and sense of “being the first (or one of the very few) who have been there” are essential to the experience.

The Australian Superyacht Rendezvous 2018, organised and hosted by the Gold Coast City Marina, became an opportunity not only to showcase the many participating superyachts, but also for stakeholders to hold an open discussion on the goals of the Australian superyacht sector, and the issues and challenges that accompany them.

One of the key points that were highlighted during the discussions involves the marketing of Australia as a superyacht destination. The consensus is that Australia is a good location for superyachts. “We offer clean, healthy, green natural environment. We are sustainable, and the visitor can easily be among the local community.” Australia’s point of difference or uniqueness is the clean and healthy marine life, and security on the water.

While Australia currently only has a 1% share of the international superyacht market, the domestic fleet are strong players in the charter market and provides significant contributions to the future of the growing sector. Jo Howard, managing director of Ocean Alliance explained, “We’re seeing quite a number of 30m+ yachts on the charter market every year here in Australia. We have already seen some this year, so that growth will continue and then we will have the largest permanently based fleet in this whole region.”

If we are able to entice these UHNW individuals to visit Australia and charter one of the domestic superyachts, there is a greater chance of them coming back with their own superyachts. If they are also made aware of the superior quality and high calibre of services that the domestic marine industries are able to offer, then they will come to visit because they believe that their vessels will also be given luxury treatment. That is the goal.

The superyacht sector’s proactive approach has already gained momentum in the tourism sector. There is now collaboration between Tourism Australia and Superyacht Australia and other stakeholders. This partnership aims to integrate the yachting sector into the Signature Experiences of Australia program, a program that packages and promotes Australia’s outstanding tourism experiences within a variety of niche areas and special interest categories. Through the collaboration of these relevant sectors, Australia can reinforce and enhance its position as a travel and exploration destination for the superyacht customer.

ECONOMIC SIGNIFICANCE

According to the City of Gold Coast, the superyacht industry attracts a significant maintenance market. In South East Queensland alone, the industry accounts for 32% of the total national contribution of the superyacht industry to gross domestic product (direct and flow-on). The Queensland government recognises that the state “has excellent maintenance and refit facilities that service the superyacht, recreational, defence and commercial maritime industries, particularly in Cairns, the Whitsundays, Brisbane and the Gold Coast.”

One of the milestones celebrated during the ASMEX Conference this year was the launch of the Queensland Superyacht Strategy 2018-2023. Cameron Dick, Minister of State Development, Manufacturing, Infrastructure and Planning said, “We are positioning Queensland as a key superyacht hub in the Asia Pacific by 2023, with 10 per cent more of the global market. We are seeking to reduce Federal Government red tape to expand the industry and create more jobs in our major maritime precincts of the Gold Coast, Brisbane, Cairns and the Whitsundays.” This institutionalised support from the State shows that there is great potential in the superyacht market in Queensland.

While we have been enthralled by the blitz and bling of the superyacht world, an aspect of the industry that does not get as much media coverage is how a superyacht contributes to the economy of a destination, and how it translates into jobs. As we begin to see dizzying numbers of how much it costs to build and maintain a superyacht, we can perhaps divert our attention to how these translate into economic benefits.

To illustrate, in a recent economic impact study on the superyacht industry in Australia, released in April 2017, it reported the economic benefits of superyachts to the Australian economy. These include:

• Local jobs – 14,500 full time equivalent (FTE) jobs, paying $1.2 billion in wages and salaries (2016)

• Tourism – near $190 million annually for the local tourism market

• Luxury goods and services – foreign guests and crew spend an estimate of $15,000 to $25,000 per day on land in Australia (in the days before and after their cruise), including an average $7,500 for luxury goods and services ( jewellery, clothes, food, drinks)

• Local maintenance and construction of superyachts – $400 million in gross product (2016)

In Australia, superyacht crew training is also an emerging industry, providing crew around the world in growing numbers. There are currently around 12,000 Australians who are crewing for superyachts internationally.

GOLD COAST: A SUPERYACHT HUB

The Queensland Superyacht Strategy establishes the Gold Coast as one of the hubs in Queensland. It states: “A conglomerate of more than 50 companies works collaboratively to attract international superyachts to Australia’s glamour city, which is renowned for its sun, surf, nightlife and shopping. These marine companies provide a range of capabilities and services including painting, refit and maintenance, and engine reconstruction and overhaul. The Queensland Government is committed to dredging the Coomera River and Broadwater on the Gold Coast to provide reliable access for large vessels such as superyachts.”

The establishment of the Gold Coast as a Port of Entry in 2017 has further provided ease of access to many Gold Coast services available for the superyachts. It is hoped that the Port of Entry will remain permanent on the Gold Coast. As a community of residents, who embrace a love for the water and the environment, Gold Coasters are able to take advantage of the benefits of this sector. The marine industry as it stands already provides almost 5,000 jobs in Queensland, and is continually growing. The promise of more jobs in a lucrative and sustainable industry requiring highly skilled individuals – both in the vessel service and in the crewing sector – is not just an empty one, but a promise that the State government will seek to fulfil. Further, businesses offering luxury products and services, gourmet food and drinks, will be greatly benefitted by the influx of superyacht activities in the region.

As Barry Jenkins, chair of Superyacht Australia, eloquently said, “From surf boards to superyachts, and everything in between, it all happens right here on the Gold Coast, no more than a few kilometres to the south, west and north. To the east as well, however, that is where the fruits of the labour are enjoyed – on the magnificent east coast cruising waters of the Pacific Ocean. The future of the industry is looking increasingly brighter as we move forward into what may well be the most exciting, productive and rewarding era in the annals of recreational leisure marine. The city prides itself in providing specialised training, stable jobs, and powering economic growth inspired by lifestyle and driven by opportunity which is accelerating the Gold Coast into a dynamic and world-class boutique city.”

MOVING FORWARD

While there is still the challenge from a federal taxation perspective, the network in the superyacht sector is definitely growing. The tourism, export and marine sectors are working together to package Australia as a superyacht destination – both for leisure and exploration, and for maintenance and re-fit works. The Queensland government has offered valuable support to the sector by coming up with a five-year strategy. The City of Gold Coast included support for the sector during the Commonwealth Games, through its Trade 2018 program. Tourism Australia is also now working with Superyacht Australia to establish a marketing program for promoting Australia to the global superyacht market. And while all these collaborations are happening, the marine industry players are working hard to improve their products, facilities, and crewing services to deliver high-quality services to the growing market.

The strong collaboration among various sectors to push forward a robust superyacht industry is great news for the stakeholders. In August this year, the state government, through Michael Healy, the state “superyacht champion”, and representatives from the Department of State Development, Manufacturing, Infrastructure and Planning (SDMIP), conducted information sessions in the four hubs – Cairns, Whitsundays, Brisbane and the Gold Coast – about the Queensland Superyacht Strategy, where industry players were provided a forum for identifying issues and opening the doors to funding projects, where applicable, and to provide support mechanisms for the Queensland stakeholders. While the lobby groups are currently working on the amendments to the Coastal Trading Act (2012) currently being deliberated in Parliament, the State government is assisting the superyacht industry to promote Queensland as a destination for refit and repair services. If the current prohibitive GST imposed on large charter yachts from overseas would be reduced (from 10% of the customs value of the yacht to 10% of the value of the charter), there will be generous opportunities to entice foreign-flagged large charter yachts to visit Australia for major events in the region in the next five years – the 2019 Rugby World Cup (Japan), 2020 Olympics (Japan), and the 2021 America’s Cup (New Zealand).

However, the challenges of “changing the game” also include creating a clear and realistic marketing strategy and plans for the sector, as well as building a strategy to engage with decision-makers (government and investors) as a united front. On the other side of the coin is the challenge of making the superyacht industry be “embraced” by the local communities. Perhaps, through an open acceptance by the communities, the policy-makers (who rely on the support of their constituents) will also be more open to consider the voice of the superyacht market as an invaluable factor in changing the game down under.

 

By Roselle Tenefrancia

*Cover image: Infinity Pacific Yacht Charters

 

 

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