The skyrocketing boat sales that U.S. dealers are reporting as a result of the Covid-19 pandemic are now also a reality in an increasing number of Asian markets. In Hong Kong, Thailand and Singapore, in particular, residents tired of enduring government restrictions on travel and many other activities are turning to boating as a way to escape and relax.
“What you’re seeing in America is happening in Asia as well,” says Martin Holmes, general manager of Asia Pacific for Northrop & Johnson. “There’s been a big uptick, a shift in people’s attitudes.”
China — long considered the biggest of the sleeping-giant recreational marine markets — is not part of the current surge in sales, regional experts say. The country’s high tax on boat purchases, along with an anti-corruption campaign that makes it unwise to display wealth in conspicuous ways, remain problematic for the recreational marine industry.
However, in places where recreational boating already had a foothold established prior to the pandemic, sales of boats — and a new appreciation for the boating lifestyle, including among first-time buyers — have been booming in patterns that mirror what U.S. dealers are reporting.
Hong Kong has, by far, the largest of those footholds. Before the pandemic, there were about 13,000 registered boats in Hong Kong versus about 2,500 in Singapore, says Ewa Stachurska, group marketing manager for Simpson Marine, which has multiple offices across Asia. Normally, her company would sell about 50 boats in Hong Kong annually. From January through the end of July this year, she says, that number was 65.
“It’s a lot of first-time buyers, people who know they might not travel for a year or two,” she says. “But it’s also people who never went boating before. They went to beautiful beaches and resorts. But now they see it is fun, and it is the way to go for the future to have a little bit of freedom.”
Adam Blackmore, a sales broker with Fraser in Hong Kong, describes the market there as “on fire.” He is selling surprisingly large boats to first-time buyers. “I sold three in the last four weeks,” he told Soundings Trade Only at the end of August. “One was a Sanlorenzo 106. The other two were Sunseeker 88s.”
The longer the pandemic’s restrictions keep people cooped up at home, experts say, the more people across Asia are realizing that boating is a fantastic option for enjoying time in the fresh air with family and friends. And this mental shift is particularly significant in nations where, historically, boating overnight for a few days to a week has not been the norm.
“The comment I’ve had said to me a few times is that they’re using their friend’s boat, but they’re starting to feel guilty,” Blackmore says. “They’re getting invited out on the boats, and now it’s been three, four, five times. They’re feeling like they can’t continue to say yes. They’re going to buy their own.”
Dwindling Local Inventory
Covid-19 first emerged in Wuhan, China, in late December, but the quarantine of that location and then other parts of China in January didn’t make a big difference for boat sales, which already had been slow across the country for a few years, Stachurska says. The big hit to Asia came in March, when a second wave of the virus overcame the entire region. That’s when all the other Southeast Asian countries banned travel and imposed restrictions on gatherings in public places.
It was soon after the March lockdowns that Hong Kong’s boat sales began to spike, she says. The timing was, in a way, fortunate, given that the Singapore Yacht Show had originally been scheduled to take place in March. That show is the region’s leading event, and dealers had big inventory stocks on hand, ready to capitalize on show leads. After the show was postponed, a lot of that inventory was diverted to Hong Kong, where boats could still be used even as restrictions on other activities tightened.
“They never closed the marinas or said you cannot be boating,” Stachurska says. “People may not be able to enjoy the parks or restaurants, but they can still take their boats out. So we started to see the boom in March, and that boom is still happening now.”
Also still happening, though, are restrictions on port-to-port transfers among Asian countries, which means buyers who want to take immediate delivery are limited to shopping primarily for boats in their home waters. After the blistering pace of sales in recent months, this inventory challenge is now affecting sales of new boats as well as brokerage deals, Holmes says. Inventory keeps shrinking and shrinking, and dealers are unable to replenish it.
“No boats can move anywhere, and until that opens up, it’s a problem,” he says. “I was talking to [boat-shipping company] Peters & May, and they have a ship en route from Hong Kong to Phuket, but they don’t even know if they can go in.”
The shipping challenge, compounded by backups from manufacturers worldwide, is also creating long delays for buyers who say they’re willing to wait for the exact boat they want. Holmes has been a dealer for Riviera Yachts for 22 years, he says, and is now having to place orders for delivery from the factory in 2022. “I’m trying to order new Rivieras now, and they’re 18 months away,” he says. “People are snatching up those orders on new boats.”
All Types of Buyers
The pattern among Asian buyers, these experts say, is threefold. Current owners are looking to move up to bigger models, since they’re spending more time on board than usual; longtime fence-sitters are now willing to close deals, since they can’t travel for their usual vacations; and new-to-boating clients are stepping forward in unusual numbers, after realizing boating is a way to escape the pandemic’s restrictions.
“People who already have boats are thinking about changing — they’re actually starting to use the boat a lot, properly, overnighting on the boats and understanding the importance of having quiet hotel systems and generators, the importance of stability, the importance of having crew who know how to use a boat overnight,” Blackmore says.
“It’s not that the industry has been brought forward; it’s that the buying process of the customer has been brought forward three, four, maybe five years,” he adds. “I’m talking to clients who have chartered in the Med, and I have a viewing coming up with one of them on a yacht. Normally, that guy wouldn’t be buying. He has a young family, two daughters, and he’s a very young, active guy working in finance. His wife is in finance, as well. But they don’t want to be stuck in their apartment. Now they can’t wait to go boating.”
Stachurska says the way people are using boats in Hong Kong is affecting not only sales, but also charters — which traditionally serve as a pipeline for nurturing future buyers. “Usually here, people use the boats during the day and go home at night. Now they are staying overnight, so they are upgrading. They may need another cabin,” she says. “It’s not only the private people staying overnight; we now also have inquiries for overnight charters in Hong Kong. That never used to happen. It used to be charters from 10 to 6. Now we are starting to see people asking for overnights, so we created a product on Lagoon catamarans and some bigger boats.”
All the brokers are predicting that the sales boom in Hong Kong will continue as the pandemic wears on, and that similar, albeit smaller, booms will happen in some other Asian markets as well.
Stachurska says Simpson Marine foresees that by the end of the year, Singapore and Indonesia will also see surges in boat sales. Holmes says conditions in Thailand remain ripe for continuing growth, as well.
“What I see in our customers is basically that nobody is losing money,” Holmes says. “In Asia, we’ve had SARS, the tsunami, bird flu, the stock market crashing, you name it. Generally speaking, people fell out and sat on their hands for a bit and complained about whatever money they were losing. This time, that didn’t happen. I didn’t see any customers panic.”
And because clients are realizing that buying a boat can, over time, be less expensive than booking international vacations year after year with family and friends, he says, the realities of the pandemic have changed the perception that boating is too costly. Once the inventory stocks rebound and the international transport of hulls resumes to bring more product into the hot spots, the trends now extending from Hong Kong to nations like Thailand should coalesce into a perfect storm of sales.
“I’ve had people buying boats who feel that they are saving money,” he says. “All we need to really capitalize on all the interest is the ports to open.”
This article was originally published in the October 2020 issue.