GMBA’s YP Loke highlights key yachting topics
In a Column for Yacht Style Issue 65, Singaporean YP Loke recaps his visit to Spain for Global Marine Business Advisors’ first in-person meeting, as the worldwide network of industry veterans tackled key issues facing yachting.
Real Club Nàutico de Palma hosted the GMBA meetings
I have the honour and privilege of being counted among the founding members of Global Marine Business Advisors (GMBA). It’s an international network of recreational marine leaders – a reverent who’s who in the industry – who have stepped back from the leading edge of their area of speciality but are not quite ready to call it a day.
Founded in February 2020, just as the Covid pandemic hit, the Group could only have virtual meetings until earlier this year, when we convened for a few days in Palma de Mallorca. While most of us know each other or have crossed paths before, this was the first time we had gathered formally under the GMBA umbrella.
Hosted by our Spanish representative Oscar Siches at the prestigious Real Club Nàutico de Palma, the two-day agenda was designed to pack in the most likely items that would influence the long-term outlook of our industry, and to scan the horizon to try to forecast how the business environment will change as the industry moves forward.
Although many manufacturers are posting record sales arising from the pent-up demand generated as people emerge from post-Covid lockdown to embrace the great outdoors, there’s much uncertainty how long this will last and what the industry can do to sustain this period of exceptional growth.
GMBA members flew in from around the world including Singapore
Following is a snapshot of what the group felt were factors that will shape the boating industry in the years ahead.
UKRAINE AND RUSSIA
The situation in Ukraine and Russia and the fallout from this situation for the marine industry, particularly the builders and the refit yards, were high on the agenda. The meeting was joined by virtual participants in Russia and Ukraine who provided updates of the situation on the ground.
Exports of marine products to Russia have been all but halted and with the summer season coming, this will severely affect the operation of many Russian businesses. The full impact of sanctions is still to be seen. Mass unemployment and a collapse of the Russia economy is predicted. Worldwide sanctions have led to soaring oil prices, inflation and supply-chain disruption, which was already impacted by Covid but has been made worse.
Russian-owned superyachts have been seized or issued ‘stop work’ orders in several countries. This has caused a conundrum for builders, refit yards and marinas, as these yachts continue to occupy docks and berths that can’t easily be vacated for work on other paying customers’ yachts. In many cases, the legality of the seizures is being challenged (ownership is often obscured and tracing the ultimate beneficial owner requires exhaustive investigation) and responsibility for the yachts’ maintenance remains unresolved.
Shipyard visits included a tour of Pink Gin, the Baltic 175 sloop undergoing a refit
While charter-season bookings look very positive this year, there appears to be growing uncertainty in the European market given the negative publicity surrounding yacht seizures and the situation in Ukraine.
Many economies already weakened by the Covid pandemic are having to deal with a double whammy as the economic environment becomes further weakened by the Russian invasion of Ukraine. Economic indicators point to inflation rising globally, caused mainly (but not entirely) by the rapid rise of global energy prices. Many countries are expected to raise interest rates to control inflation, which could in turn bring about deflationary pressures. All this, with declining consumer sentiment and supply-chain issues, will invariably have a negative impact on recreational marine.
With ESG (environment, social and governance) investing coming into the forefront globally, the group discussed the implications for the boating industry as sustainability becomes an increasingly important consideration for consumers. The move toward sustainability cascades down the equipment-supply chain, involving investment in production methods and product innovation.
Sustainability comes under discussion
In consonant with the automobile industry, there has been much research and development in alternative fuels to replace or augment internal combustion engines. Guided by Albert Willemsen, GMBA’s environmental lead, the group discussed creating an approach to sustainability that demystifies it and focuses on an approach that businesses can use to practically address issues. The need to address sustainability has grown in urgency for all businesses, big and small.
As many boat shows were cancelled or postponed in the two years following Covid, the group discussed the changing role of boat shows and how this affects the marketing mix for manufacturers. It was generally reported that most shows that resumed were well received and that the networking component of physical shows remained a key draw that can’t be easily replicated in a virtual setting.
However, with order books full and limited inventory available, many boatbuilders have little to exhibit and what they have is being focused on the major international shows. Deciding which shows to participate in is far from straightforward and those who were venturing to shows felt it critical to get tangible outcomes.
Harbour view of Palma de Mallorca
Some are taking a more quantitative approach to evaluating their show participation. Others who have channelled their boat show dollars to other areas of their marketing mix are still evaluating the effectiveness of their new marketing strategies. It is a marketing maxim that half of all marketing is wasted, but knowing which half is the tricky part!
Since GMBA’s formation in early 2020, our advisors have been effective in helping recreational marine companies with their international growth strategies. The group’s local knowledge and embedded networks on the ground in many international markets have made it more affordable for many marine businesses to gain entry in new markets to expand their global footprint. It has assisted several companies in identifying new distributors, agents, boat builders and outlets for products, so if you’re looking for advice or even a sounding board, feel free to reach out.
Loke is a founding member of Global Marine Business Advisors (GMBA), the long-time Chairman of the Singapore Boating Industry Association, an honorary member of the Asia Pacific Superyacht Association (APSA) and a member of the ICOMIA Marinas Group. A Certified Marina Manager and naval architecture graduate, he owns Spinnaker International, which consults on boating and marina matters.