Over the past seven years, during the economic downturn in the US and Europe, the developed and developing countries in Asia have continued to record growth rates of up to 10% per annum. During this period discretionary spending power has also increased, fuelling growth in the leisure marine industry.
New marinas have been developed and the boating lifestyle has become evident for the first time in places such as South Korea, Myanmar and Vietnam. There is now a shortage of marina berths in the established boating markets of Hong Kong, Singapore and Phuket.
Fragmented market in need of some joined-up thinking
While the Asian market has grown, it was evident at the start of 2015 that the brakes had been applied. Chinese policies, namely the anti-corruption drive, have influenced the slowdown right across the region and have affected most regional economies. With leisure boating a high-profile and very visible activity, it suffered disproportionately.
South East Asia’s boating waters were collectively named ‘Aseanarean’ by Singaporean Francis Lee, boating guru and president of Raffles Marina in Singapore. Lee pushed the Aseanarean name strongly in the late 1990s in a bid to create an image for the region similar to the Caribbean and the Mediterranean. it was unfortunate timing as it coincided with the Asia economic downturn of 1997, but over the latter years his vision has largely been fulfilled. Blessed with over 20,000 island destinations and generally good year-round boating conditions, the waters of south East Asia are undoubtedly some of the best and least frequented by leisure boats in the world.
Boating as an activity has existed in the region since colonial times. The Republic of Singapore Yacht Club, founded in 1826, is one of the oldest in the world and the Royal Hong Kong Yacht Club has a strong heritage stemming from 1894. However, boating only really started to grow in the region in the early 1990s with the development of modern marinas such as Raffles Marina in Singapore and ocean Marina in Thailand.
Despite economic knockbacks, the number of boats and marina berths has grown, but far from the extent predicted in the mid 1990s. at that time the industry was enthused with the growth potential as marina projects and clubs were the favourite of developers. This disappeared with the Asia financial crash of 1997, which caused the cancellation or delay of many projects. it took until 2005 for the industry to steadily recover in the region, but it is now on a more solid footing than 20 years ago.
Now that the region’s economy has been relatively strong for over 10 years, one of the major obstacles for leisure boating growth has been removed. However, several other underlying factors still have to be overcome to ensure a boating boom.
Note: This is an excerpt of the market overview published in the December issue of IBI magazine. Subscribers of IBI Plus can download the full report.