It might seem ambitious, but a mix of government incentives, restrictions on overseas vacations and an emerging middle class are fuelling potential

The value of Russian’s leisure boating sector could hit RUB 65bn (US$1bn) within the next six to seven years, thanks to the planned expansion of services aimed at attracting foreign boaters, an increase in domestic tourism, as well as the improvement of the country’s boating infrastructure, according a statement from the Russian Association of Yachting and the Ministry of Sport and Tourism.

The association claims that in Crimea and the Sevastopol peninsula alone, the value of the industry could reach as much RUB 30bn (US$460m) within the next few years. A significant part of these funds will be generated by the servicing of foreign yachts entering domestic territorial waters, the association claims.

The figures may seem ambitious, but the government is pushing to make leisure boating popular and more affordable for domestic and foreign boat and yacht owners, positioning it as an activity for the middle classes. Coupled to this, the government has also banned a number of well-salaried public sector employees, such as public safety officers and military personnel, from taking holidays overseas. Numbering in the several million, such employees of the state now need to look for holidays in the Crimea and the Caucasus region, and for many of them locally built boats and yachts are within their means – Russian built leisure boats range in price from around RUB 500,000- RUB20m (US$6-7000-US$310k). 

According to the Russian Ministry of Sport and Tourism, currently the share of domestic yachts and boat builders in Russia is estimated at 95% and growing. Among the largest domestic producers are Grizzly Technologies LLC, Saitov LLC (Bester boats), SPEV, Astron Marine, Kostroma Sudomechanical Plant JSC, NorthSilver and Alex Marin LLC.

According to Dmitry Makarov, exhibition director of the St Petersburg International Boat Show, in recent years the quality of boats built at the domestic shipyards has significantly increased, with builders expanding their ranges with more complex, technically sophisticated vessels.

In the case of imported yachts, according to Makarov, the biggest demand is currently observed for 7-12m Jeanneau boats, and Finnish brands XO and Targa.

For bigger 12-15m boats, the majority of sales have traditionally gone to imported brands such as Princess, Azimut and Polish yard Galeon. 

Infrastructure boost?

Infrastructure, or lack of, remains a major stumbling block. However, things appear to be changing. According to Maria Litovko, a project manager for Civil Development of the Balaklava Bay Area (where one of Russia’s largest yachting marinas is currently being built), the number of potential investors in Russian yachting has significantly increased in recent years, as Russian investors look beyond traditional boating infrastructure investments in the Mediterranean in favour of domestic opportunities.

She added that Russia hopes to replicate the experience of Turkey, where in recent years, revenues from yachting have reached almost 50% of the overall revenues generated by the country’s tourism sector.

At the same time, according to Aleksey Chernyak, chairman of the Committee on the Sanatorium-Resort Complex and Tourism of the Republic of Crimea, Russia has numerous shipyards which comply with the highest international standards, that are ready to provide yacht repair, refit and build services.

Chernyak says that yachting is no longer considered a leisure activity for the super-rich, as the middle class can now afford to buy a small boat, the cost of which is sometimes comparable to that of a car, while running costs, thanks to new technologies, are also on the way down.

Chernyak added that yacht and boat charter in Russia is also becoming increasingly popular particularly amongst the business community for corporate entertaining, and that in recent years the number of families renting a yacht during their vacation has also increased.

According to data of the Russian State Tax Service, at present Russian citizens spend over US$300m a year maintaining their yachts outside Russia – many are reportedly now considering returning their boats to domestic jurisdiction.