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THAILAND POISED FOR YACHTING BOOM
Phuket – Evolving into a Marine Tourism Hub |
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| By Grenville Fordham |
WHAT IS THE
BUSINESS OF YACHTING?
Not a single business, yachting encompasses a widespread range of commercial activities: boat building and sales; marinas, with their associated hotels, spas, condominiums, restaurants and shopping plazas; shipyards for major refits; construction companies to build marinas; yacht charter operations; yacht management; yacht repair and refit services; parts supply; sail-making; engineering. These are some of the obvious, direct businesses that make up the ‘business of yachting’. Add to that the impact on the local economy – restaurants, provisioning, laundries, vehicle hire, public transport and more – and the financial benefit of a booming yachting centre is enormous.
A report by Aseanarean Marinas Association shows that for every dollar spent at a marina, approximately $10.00 is generated in the community. Similar studies show that a typical owner spends around 10% of the value of his boat on annual upkeep. Factor in the cost of a single luxury motor yacht at upwards of US$1 million, a super yacht at approximately US$ 50 million, and the scale of the potential becomes clear.
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Yachting is a business. A business that has been the driving force behind the growth of tourist economies in places like Turkey, the Caribbean, Croatia and Greece. It is a huge, multi-faceted industry with the potential to draw in substantial overseas investment, create thousands of skilled jobs and seed numerous small-medium enterprises. (The US$25 million Royal Phuket Marina project will create around 1,000 jobs.)
Yachting - an industry that did not exist in the Kingdom 20 years ago but grew for ten years despite regulatory difficulties – stagnated when taxes on imported yachts exceeded 200 per cent. Seen to be “playthings of the idle rich”, this conventional wisdom certainly influenced Thailand’s decision in the mid-90s to impose massive luxury taxes on the import of ‘pleasure boats’.
High taxes and cumbersome regulations (ranging from the definition of a yacht, through the right of non-Thais to hold a Thai skipper’s license, to heavy-handed immigration procedures) have resulted in an exodus of yachts to the nearby island of Langkawi, denying Phuket its number one slot.
Yet such is the attraction of Phuket, that the island’s two marinas* remain full for most of the year and Thai-owned marine service companies have become a key feature of the scene. The business of yachting in Thailand has hung on by the skin of its teeth, due mainly to the superior attraction of Thai waters.
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Now for the first time in Thai yachting history, things are on the verge of significant change.
Statements by the government of Prime Minister Thaksin Shinawatra, identifying yachting as a business with great potential for the country and a prospective engine of tourism growth, have undoubtedly attracted international attention and spurred renewed worldwide interest in Thailand’s yachting industry.
*A total of 150 boats in the water and 60 boats on the hardstand at the Boat Lagoon marina and 140 boats in the water at the Yacht Haven marina
NEW RULES SET TO MAKE PHUKET REGIONAL INDUSTRY LEADER
The marine leisure industry in Thailand, and Phuket in particular, is bubbling with excitement and expectation. Talks over the last few months between the newly-formed Marine Alliance of Thailand (MAT) and Thailand’s Ministry of Tourism and Sport have led to a realization that the country is missing out on becoming a major world boating destination because of antiquated and unevenly applied laws and regulations.
Following a seminar in May 2003 at which MAT representatives were invited to debate the issues with senior officers from the various government departments involved, the Ministry of Tourism pledged to press for regulatory reforms in order to turn Phuket into Asia’s leading yacht and marina destination.
“The yachting and marine business has the potential to generate billions of baht for the country,” said Dr Sasithara Pichaichannarong, Director-General of the Ministry of Tourism and Sport’s Office of Tourism Development, adding that the Ministry would work with other government agencies to take immediate action and help tackle obstacles.
In July, Deputy Prime Minister Somkid Jatusripitak ordered a review of the import taxes on yachts by the Thai Customs Department and the Excise Department.
In addition to a zero tax proposal, measures put to the Thai cabinet include extending the length of stay in Thailand for boats to an automatic one year and overhauling the confusing tangle of outdated marine regulations that have made it difficult for yacht charterers to operate to international standards, and made individual cruising yachties tear their hair out when confronted with unbending officials.
Having received similar requests from central government to tackle the issues, the Harbour Department is in discussion with a MAT sub-committee on several issues relating to the regulation of the pleasure boating business.
According to Kevin Quilty, Thailand managing director of Sunsail – the world’s largest yacht charter operator, the log-jam breaking in Thailand. From a fleet that remained static at 21 ageing boats between 1998 and 2003, 25 new charter yachts are destined for Thailand in 2004, more than doubling the company’s fleet, allowing it to expand from Phuket into other parts of the Kingdom.
Another facet of this business is the world of events. Pattaya has staged many regattas involving small, beach-launched dinghies and catamarans, including the Fireball World Championships. Phuket has been host to the Phuket King’s Cup Regatta for 16 years, an event that attracts up to 100 boats and 1,000 visitors to the island every year. Today, Thailand hosts not only the King’s Cup Regatta, but the Phang-Nga Bay Regatta (40-50 boats), the Koh Samui Regatta (30-40 boats) and, next year, Phuket Race Week (40-50 boats expected in its inaugural year).
Thailand’s regattas gain international media coverage, showcasing Thailand as a destination for the discerning visitor, as well as attracting sponsorship from major corporations. In a milestone achievement, the Asian Yachting Circuit, of which the Phuket King’s Cup Regatta is the cornerstone, has this year brought Omega on board as its title sponsor, establishing Asian yachting firmly on the international sponsorship scene.
2003 also sees the first major international exhibition of any kind held in Phuket – Thailand’s own boat show, the Phuket International Marine Expo (PIMEX) 2003. The draw of Thailand’s potential as a major player on the world yachting scene is evidenced by the commitment of 90 companies and approximately 5,000 visitors from ten countries. In comparison, the most recent regional boat show, Singapore’s Boat & METS Asia (2002), claimed 75 exhibition booths in its marine section.
With continued and solid support at the top, there is little doubt that others will follow and the biggest winner will be the Kingdom of Thailand. The destination is finally receiving its commercial due as one of the world’s top yachting locations, a fact known to cruising sailors for more than two decades.
Things move fast in today’s Thailand, once high-level decisions have been taken. Those who act now will win the big prizes. |
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