SUPERYACHT SINGAPORE ASSOCIATION

2009 Superyacht Singapore Association Traffic Report - Media & Industry Version 

- For immediate circulation -

2008 was an awesome year for superyacht traffic in Singapore. From January 1st to December 31st, SSA registered a total superyacht presence of 55 vessels, equivalent to a 93% growth rate year to year. However, as per SSA’s mid-year report published in July last year, 2009 was clearly not looking as pretty. As a stark contrast, 2009 was down by 35% for most of the year.

As it turned out, traffic picked up significantly in September, October and November and quite amazingly, total traffic even managed to overtake 2008 by four units, reaching 59 superyachts.

From an industry and Association perspective, this is really more than we could ask for. Admittedly, traffic is far from initial targets set in 2007 (80) but given the extremely harsh financial conditions, the storm that has blown through the superyacht industry, 2009 traffic and the pace of the recovery is definitely something we will be content with.

However, the numbers hide very interesting facts and trends that are necessary to highlight and study in order to put some of these trends in perspective and to have a better understanding of what 2010 will be like.

On a personal note, and as SSA’s Executive Director, 2009 proved to be particularly interesting and exciting. Firstly, SSA organized the first ever “Asia Superyacht Conference” held in Singapore in October. The turnout exceeded our initial expectations and the overall feedback was an overwhelming call for a concerted regional action for the promotion of superyacht cruising and ownership. Secondly, it was my great pleasure to welcome Priscilla Tang earlier in the year as SSA’s first permanent employee. Her contribution along the year was instrumental in delivering some of our key objectives. Thirdly, as the manager of a Singapore-based private yacht and superyacht charter business, what could have been a pretty disappointing year happened to be rather satisfying too, since sales targets were exceeded in spite of understandably lower corporate sales. Lastly, I had the pleasure to board and visit some of the most interesting superyachts ever built, like Asean Lady, Senses, and some real “classics” like Catalyst of Fal (an Alloy Yacht), Argo and My Space. Great thanks to the owners and captains for inviting SSA on board.

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Definitions and count methodology:

 Presence: means superyachts (leisure yachts above 80 feet) having entered and stopped in Singapore waters, and berthed at any of the local marinas (be it even for 1 hour). Are also counted superyachts anchored in Singapore waters but too large to enter any marina and good quality classic yachts very close to that 80-feet mark.
 Unique presence 1): Superyachts permanently based in Singapore are counted as “1”, no matter how often they went in and out from the country during the year.
 Unique presence 2): Superyachts visiting Singapore waters from Jan.1st and in spite of multiple entries during the year are also counted as “1”.
 Unique presence 3): Overseas superyachts that arrived end of 2008 and left Singapore only in the beginning of 2009 are counted only for 2008, not for 2009 (this has the benefit of preventing double count for expenditure estimates while lowering exact presence as felt by marinas).

Average foot-run of superyachts:
These superyachts represented 7,495 of total foot-run, versus 7,616 in 2008 and 4,499 in 2007 (2,250 in 2006), equivalent to 1.59% drop. More significantly, average foot-run for visiting vessels decreased by 11 feet, from 140 feet to 129 feet. This is the second successive yearly drop, after dropping by 17 feet from 157 to 140 feet between 2007 and 2008.

As we wrote in last year’s report, “it would be easy to dismiss these declining average foot-run figures as of little importance, however, it could also reflect that long trans-oceanic voyages are not solely for megayachts above 160 feet”.

Not that this sentence was prophetic in any way, but indeed a lot more smaller superyachts did cross the ocean(s) on the way to Singapore and Asia. The important point is that they did not cross the ocean(s) under power but using dedicated yacht transportation services. And this is the great piece of news for 2009. We counted not less than 10 yachts delivered to Singapore either by Sevenstar, Dockwise, YachtPath or Peters & May. In itself, this is very significant since it seems that these companies are now in the position to market official stopovers in Singapore. This is all the more significant that SSA has been advocating such a move by yacht delivery companies since the inception of the Association.
As a matter of fact, the demand was fuelled by the charter market, secondary market and delivery of new builds rather than by the relocation of vessels to Asia for private cruising by their owners. Typically, the yacht delivered did not exceed 100 feet, at the exception of Braveheart (163 feet) and Firouzeh, a 105 feet Mangusta.
As for the origin of the deliveries, they were largely from the Mediterranean, very obviously, but also notably from the Caribbean.

Seasonality:

In terms of traffic seasonality, 2009 offers a stark contrast compared with 2008. To all our statistician and analyst friends, there is not much to make out of it. The only significant patterns are:
1) First half of the year: Rather flat between May and August
2) Second half of the year: Recovery from September onward.

Let’s look at it in greater detail.

1) First half of the year: As mentioned, traffic was rather flat, if not utterly depressing. Unlike 2007 and 2008 that saw a first peak in March after the Phuket season highlighting the end of the Northeast monsoon, we observed a near total flat during a normally busy period until May, when traffic recovered slightly. According to marina managers and superyacht agents, the yachts that would normally sail for Phuket from Europe and the transit across Singapore to make their way to the eastern side of the Malaysian Peninsula, simply did not do that. They simply went back across the Indian Ocean. That in itself was rather puzzling and we are still short of solid explanations. Possibly, owners could be so concerned about restructuring their businesses that planning for a summer in Asia was a very secondary concern. 

2) Second half of the year: June, July, August… The wind just went flat. Almost no traffic to speak of. New deliveries were delayed. Marina Managers were looking anxiously at the horizon. Nothing. Good thing they were on land, otherwise it would have been depressing. Thankfully, the second edition of the Singapore F1 Grand Prix was coming and hopefully we could outdo the 14 superyachts that came for the occasion in 2008. Indeed, salvation, so to speak, came in September, but it had very little to do with the F1 race which was just a blip on the radar screen. Salvation came from a salve of deliveries that would carry through till year-end and through a regular flow of smaller superyachts that have been cruising in the region and stopped over in Singapore for regular maintenance and re-supply. They were not the big ones we were expecting, but they were above 80 feet, they were superyachts! And almost miraculously, traffic picked up and Singapore registered 15 new arrivals in November alone. They were simply playing with our nerves…

Singapore-based superyachts:

In 2009, Singapore-based superyacht population grew from 12 to 14 units. As highlighted in last year’s report, growth was not imputable to Singaporeans purchasing new superyachts but more to foreigners (and mostly Permanent Residents) either purchasing or relocating their yachts. Of these “new” Singapore-based yachts, only one (Lady D, 185-feet) spent 2009 in Singapore where she was completing her extensive refit. As for the two others, Geisha (108 feet) and Windy II (150 feet), they were not counted within 2009 Singapore-based yacht population as Geisha simply cruised all year round in Southeast Asia while Windy II was doing a lengthy refit in Lumut, Malaysia before returning to Singapore for the charter market.

As for the superyachts that were expected to arrive in Singapore in 2009, only Polaris (164 feet) came back in the second half of the year while Azurea cancelled its plan of relocating a yacht here and Nymphaea’s refit in Phuket was also being delayed. Nymphaea finally made her way to Singapore in January 2010 and hence does not appear in our 2009 statistics.

On a more positive note, unlike 2008 and to the best of our knowledge no new-built superyachts were purchased or ordered by Singaporeans or locally based business people, there were at least 2 new orders. One, named “Cavallino”, a Pershing 80, was commissioned in Singapore on her way to Phuket where she will be based. As Singapore will not be her home-based, “Cavallino” is not part of Singapore-based superyacht population. Then there was a 42-meter trimaran to be delivered end 2010 and that was probably ordered late 2008 or early 2009 by her Singaporean owner.

 
Asia’s superyacht population:

In 2008, SSA listed 67 superyachts based in the Asian region, from India to Japan (Australia and New Zealand excluded). SSA had little data from Japan, Taiwan, and South Korea for example and recommended the highest level of caution with such numbers.
Without a doubt, the two great winners of 2009 were Hong Kong and Phuket. In Hong Kong, it is estimated that 5 yachts above 80 feet were delivered (essentially new builds). As for Phuket, superyacht population was mostly boosted by the arrival of relocated charter vessels and, from January 2010 the arrival of pre-owned yachts making their way up after being delivered to Singapore for maintenance and upgrades. What is most puzzling is that yachts kept being ordered and delivered in Hong Kong while there is a significant shortage of appropriate berths, while Singapore keeps growing as a servicing hub while not having yet a dedicated maintenance centre. 

Detailed traffic from the region and beyond the region:

Of the biggest surprises of 2009 was the drastic traffic drop from regional superyachts. Falling from 11 to 8, and that is including “Gem”, a 94-feet yacht relocated to Singapore for a refit and destined to the local charter business, and “Cavallino”, being commissioned in Singapore prior to being based in Phuket. Out of the 64 Asia-based but non Singapore-based yachts, Singapore attracted 13.5% of them in 2009. Very interestingly, 40% of 2008 traffic was made of regional yachts being commissioned, repaired or resupplied in Singapore for the regional charter business. The same pattern can be observed in 2009, with 2 charter yachts using Singapore as a repair base.

Size-wise, for both 2008 and 2009, average yacht length was 133 feet.

What can we conclude from the regional traffic drop? Firstly, that the financial crisis had an impact on regional cruising patterns. Secondly, regional yachts that made their way to Singapore for the inaugural F1 race simply saved the money for the second edition. There was no novelty effect anymore. Could we get such novelty effect in 2010 when the casinos open? Probably not so, for the simple reason that the casinos (Integrated Resorts) go through phases of staggered opening and there is far less of “D Day” effect. Nonetheless, the opening should be able to attract a reasonable number of regional vessels, hopefully.

Though many superyachts do not like publicity (this is why specific names of yachts and /or of their owners were not mentioned in this report), there are many that deserve to be mentioned and even some that crave for it. So, in the limit of what SSA can actually divulge, what were the 2009 highlights?

EOS: Without a doubt, EOS was the star of the year. With 307 feet of total length, her classic look and famous interior, that Lurssen-built yacht launched in 2006 stopped over in Singapore for some supply and maintenance works. More extensive works could have been carried on locally if we had a proper yard to dry-dock her for a while. Instead, EOS eventually made her way to Australia.

Senses: Senses is probably one of the most famous exploration yachts that has cruised the oceans. Firstly, it doesn’t necessarily look and feel like one and secondly it has all the comfortable facilities that one would expect for a luxury yacht. But once one starts paying attention to the incredible list of “toys” on board, the quality of the launches, the tenders and even the onboard sail boat, one fully realizes that Sense is really like few others. Add to that the clear and very summery atmosphere of the interior design, like a cosy hotel of the 16th district of Paris built for Tahiti. Plain cool…Note that Senses published an absolutely remarkable book of their last world tour. Sublime images.

Pangaea: The third highlight would be Pangaea. A bit like Senses, it was built from scraps, metal leftovers, more or less. Like Senses, it was designed to go anywhere, anytime. There is the same sense of adventure, of extreme freedom and infinite purpose in that yacht. Her own, Mike Horn is one of the greatest adventurers that ever lived. Swimming alone up and down the Amazon River, that kind of stuff…

Revenues generated:

Total visiting traffic generated 7,500 feet with an average of 129 feet per vessel.

If we accept the assumption that a superyacht would have spent an average S$250,000 in Singapore (berthing fees, repairs, maintenance, supplies etc…), direct impact for the industry is S$14.4M (charter sales & catering not included). Following New Zealand’s impact studies of the superyacht traffic following key events such as the America’s Cup, SSA estimates that indirect and induced revenues are at least equivalent to 1.25 times the direct spending. On that basis, indirect and induced spending is estimated to have reached a minimum of S$18.4 million dollars, bringing the superyacht industry contribution to the economy to be over S$33M.

2009 conclusions:

To conclude with the year, 2009 was still a positive year for the Singapore Superyacht Industry. Overall, with a 7% traffic growth year to year in spite of the most adverse economic conditions for years. 2010 promises to be the year when solid growth resumes as new yachts have already hit Singapore shores in the first month of the year and several superyachts are already announced either for delivery or for a stopover.

Important observations:

 Singapore superyacht marinas are far from full occupancy. Even at its peak, occupancy was only 50%. If the same occupancy was applied across the year with superyachts coming in and out, traffic could be above 150.
 Singapore superyacht marinas have each carved a niche for themselves, attracting quite a different clientele.
 Lack of proper / dedicated repair superyacht facilities have hampered traffic. Possibly, 7 to 10 superyachts did not come to Singapore for lack of proper facilities for the nature of repair/maintenance works required.
 Singapore second F1 GP disappointed. Will the opening of Integrated Resorts provide the same boost(s) as the first Singapore F1 race?

2010 targets and beyond:

SSA believes traffic can hit 80 unique superyachts in 2010, the initial target for 2009.  If the industry achieves that, then we will still be in line for our 2012 target of 200 unique superyachts.

Very objectively, the industry has grown steadily in the last 4 years and that keeping the pressure on, by setting up a regional superyacht association that would promote the region more globally and by the mere fact that the economy is shifting East, it is simply impossible not to see the industry growing steadily for the next 10 to 15 years.

Of course, and to really paraphrase what was written in the same report last year “2010 and 2011 may still prove more difficult than expected as the current financial downturn has no precedent in the industry and it is extremely difficult to predict how the meltdown will keep affecting cruising decisions or overall expenditures for the next 36 months. However, what we do know, is that even if dramatic new-build order cancellations were to follow, there is still not enough superyacht berths in the Med. or the Caribbean for the existing superyacht population, not to mention upcoming yachts (200 new launches minimum in the next 24 months). In short, in a depressed America and Europe, it is difficult not to imagine that more and more traffic will trickle down to our region to find solace and new adventures”.

“Hence, what we envisage is a progressive significant transformation of Singapore’s commercial waterfront into a lifestyle/leisure waterfront that will host hundreds of the most magnificent superyachts berthed here regularly and a highly competent and dedicated supporting industry. Enough to keep SSA’s members busy and prospering for the years to come”.

Indeed, the Singapore’s Government has announced in the first week of February that, part of the great long term redevelopment strategy of Singapore’s Tanjong Pagar area, where the port is located, will be transformed into a new waterfront city. We may have to wait until 2027 to see that happen, but at least, the vision is common. And one never knows how much faster that may just occur!
 

Comments from the industry:

YP Loke, Managing Director, Spinnaker International: “I think superyacht traffic continues to be driven by external factors outside our control (Indian Ocean piracy; economic downturn). I feel our promotional efforts (conference, etc) and casinos opening will only have marginal impact if at all, at this early stage (although we have to continue to promote, of course). Brokers will always try to talk the market up and say the super rich are not affected by the crisis. We have to realize that is just talk. The reality is that it will be difficult to draw superyachts to Asia until the crisis is over, and piracy contained. Meanwhile, we have to keep chipping away at the groundwork. I feel regional promotion is needed (as opposed to just promoting Singapore). The regional association we're pushing for is hopefully part of the solution to this. Time will tell. I think 2010 traffic will not be too different from 2009.”

Simon Turner, Managing Director, Iconovista: “Certainly I believe that the overall global economy is the major driving factor behind traffic into the region and Singapore.  Large yacht owners find it difficult to justify round the word fuel bills when they need to be fully hands on with their businesses.  I think that piracy is less of an issue because there are routes to avoid it and those who are keen will certainly do so.  Another issue remains the continued difficulties and lack of open seas policies in Indonesia.  My Australian and New Zealand contacts tell me that they have boast visiting from west coast USA via the Pacific but turn back after Australia because they don’t want to deal with the Indonesian paperwork and high costs.  If they are brave enough to tackle Indonesia, then they can still be put off by lack of berthing facilities in Phuket which still remains a key cruising destination.

So economy, Indonesia and berthing in Phuket all need to improve to get more non Asian boats into the region. More positively, the casino’s in Singapore certainly will make it a must stop destination for cruising superyachts, whether they be from within or without the region.  We will also see more big yachts based here as international corporations’ CEOs base their business operations in Singapore and need an entertainment platform.

It will be a tough year again but we should see the trend of higher traffic at the end of last year continuing.”

David Brightling, General Manager Projects, SUTL Marina Development: “All in all, 2009 was a positive year for superyacht visits to Singapore.  Despite the worst economy since the great depression, superyacht traffic improved toward the end of the year and I am cautiously optimistic about the prospects for 2010-2011.  However, we have a way to go before Singapore achieves a reasonable share of global superyacht traffic.  First and foremost, we must go beyond being a place where superyachts stop “in transit” as they go from one place to another.  The jury is still out as to whether the 2008 Formula 1 experience was a one-time thing, or whether the world’s only night race will again attract superyachts once the global economy stabilises.  The Lion City’s two “integrated resorts” may be attractions, but it will be interesting to see if the sort of people who own superyachts are gamblers.  While their drawing power is questionable, at the very least F-1 and the casinos will afford pleasant diversions for owners and crew who are already planning on being here.   In terms of attracting superyachts, there is definitely a market for a proper repair and refit centre with haul out and dry dock facilities which would also make a major contribution to the local economy.  The SSA report shows that some vessels came here for refit work, despite our limited facilities, and it is gratifying to know that Association members and industry partners are exploring this further.  While cruising in Singapore waters is very limited, Indonesia – despite its challenges – remains the greatest potential cruising area in the world.  One or two superyacht marinas in Indonesia, coupled with improvements in the regulatory framework and safety, could bring a lot of superyachts our way.  Our future as a superyacht destination is closely tied to the region, but our challenge is to do what we can to become a superyacht destination ourselves.”

February 24th, 2009
Superyacht Singapore Association
Prepared by Jean-Jacques Lavigne, Executive Director

Disclaimer:
The information collated has been obtained on a best endeavour basis. While SSA believes its sources to be reliable, it does not make any representations, express or implied as to the accuracy of such information. SSA and its representatives shall not be held liable for inaccuracies, errors or omission in the information presented. The information presented does not constitute professional advice and in all cases users must exercise their own judgment and due diligence in application of the information provided. SSA may update, modify or alter the contents of this document without prior reference to its users of such update, modification or alteration.