superyacht the 2 0 1 1 t r u t h • o p i n i o n k n o w l ... · marina capacity & berth...
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intelligencequarterlyMarina CapaCity & Berth analysis report
Superyachtthet r U t h • o p i n i o n K n o W l e D G e • i D e a s a n D e X p e r t i n D U s t r y a n a l y s i s
a proDUCt of
s U M M e r 2 0 1 1
Camper & Nicholsons Marinas own and operate marinas in Malta, Turkey and Grenada, and manage marinas under contract in Abu Dhabi, Italy, Cyprus and St Kitts. Their professional services cover the full marina life-cycle from initial feasibility through to maturity, and they are currently consulting on design and technical projects in most areas of the yachting world, from the Caribbean to China.
Camper & Nicholsons Marinas International LtdThe Treasury Building, Vittoriosa BRG1721, MaltaTel: +356 2248 0000www.cnmarinas.com
1 Introduction 2 AnalysisoftheMarinas Sector19 NewMarinas–planning andexecution24 MarinaOperators27 EnvironmentalMarina Management30 Engel&Völkers– 15mostexpensivemarinas31 InterviewwithRobert Perrochio,ICOMIA32 Conclusion
Contributors: Ellie Brade, Tess De La Mare, Martin H Redmayne
Thanks to: Camper & Nicholsons Marinas International, Sean Purdy, Kurt Fraser, Roberto Perrochio
For more information on Superyacht Intelligence, please contact Ellie Brade – [email protected]
To subscribe:Visit: www.superyachtintelligence.com/subscribeEmail: [email protected]: +44 (0) 207 924 4004
Subscribe to Superyacht Intelligence for £375The complete business tool giving you access to the most up-to-date and detailed market intelligence.• Full access to all live superyacht data, the Superyacht Fleet and Global Order Book • Full access to all market analyses and technical reports
Published by The Yacht Report Group, Lansdowne House, 3–7 Northcote Road, London SW11 1NG, UKTel: +44 (0) 20 7924 4004 Fax: +44 (0) 20 7924 [email protected]: 2046-4975
Superyacht Intelligence Quarterly is published by TRP Magazines LtdCopyright © TRP Magazines Ltd 2011. All Rights Reserved. TRP Magazines is a division of The Redmayne Publishing Company.
The entire contents are protected by copyright Great Britain and by the Universal Copyright convention. Material may be reproduced with prior arrangement and with due acknowledgement to TRP Magazines Ltd. Great care has been taken throughout the magazine to be accurate, but the publisher cannot accept any responsibility for any errors or omissions which may occur.
1Contents&Introduction
IntroductionCamper & Nicholsons’ Grand Harbour Marina, Malta
Front cover image: Corbis
W e last covered the subject of marinas in a Superyacht Intelligence Quarterly in 2009 and are now making a timely return to the topic. In this edition we are pleased
to be partnering with Camper & Nicholsons Marinas International, one of the world’s leading marina operators, who have provided us with data on the marina sector to include within this report.
The marina market is arguably more resilient than other areas of the industry. Owners can simply choose not to build or buy new yachts when times get tough, prospective guests can choose not to charter a vessel. Existing superyacht owners or charter companies cannot, however, choose not to berth their yachts. As the superyacht fleet never noticeably shrinks in numbers, demand for berths still exceeds demand. These market conditions offer ample opportunity for new marinas with a competitive strategy to fill their berths and generate a profit.
NEED TO CLARIFY SIQ FOCUSES ON YACHTS OVER 30M ONLY Ellie Brade Editor
4,000
3,000
2,000
1,000
0
3AnalysisoftheMarinasSector AnalysisoftheMarinasSector
Camper & Nicholsons Marinas International have joined forces with Superyacht Intelligence to provide data on the marinas market, sourced from the
detailed marinas database that they maintain. Camper & Nicholsons is widely recognised to be one of the world’s oldest and most prestigious yachting business names, with
origins dating back to 1782 when boat building began at Gosport, in the south of England. Camper & Nicholsons Marinas has specialised in marina investments and waterfront development for over 40 years and has provided services to clients in more than 25 countries worldwide.
Fleet OverviewAs is discussed in more detail later in this Quarterly, there is huge potential for the marinas industry. A marina provides a service for yachts as either a homeport or as a transient base and, like the refit and repair sector, it is driven by the existing, and growing fleet. With increased movement of superyachts away from the typical and overcrowded cruising grounds, the potential for newer facilities is also in existence.
The total delivered superyacht fleet numbers 4,117 yachts,1 and has seen an increase of 95.2 per cent over the last decade [2001-2010]. The delivered fleet has a combined length of 168,558 metres, all of which needs to be housed somewhere. As well as those yachts already delivered, 392 yachts are in the order book, totalling an additional 168,558 metres, with the average sized yacht in build measuring 45.2 metres. As Figure 1 demonstrates, the fleet has seen a consistent increase over the last 20 years, with this set to continue, albeit perhaps not at the accelerated rates seen in the boom years of ’04-’08.
AnalysisoftheMarinasSector
1 Correct at the time of going to press in June 2011
0
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Figure 1: Growth of the superyacht fleet (year on year)
’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10
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MB
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1,4091,486
4,057
1,5651,642
1,701 1,7621,843 1,930
2,0332,140
2,2552,401
2,5562,733
2,912
3,174
3,411
3,667
3,866
Numbers of superyacht marinas In terms of where superyachts want to be based our research shows that the Mediterranean is the most popular region for cruising superyachts and homeports, with over 60 per cent of superyachts having their base there. The Mediterranean is followed in popularity by Florida and the Caribbean, which have a combined total of 121 marinas (see Figure 3). As a result, for much of this analysis we have included breakdowns of data specific to the Mediterranean and Caribbean and Florida, although
this does not reflect badly on other destinations around the world which, of course, are popular in their own right.
Figure 2 displays a breakdown of the number of marinas in the Mediterranean, where Italy dominates with the largest number of marinas, followed by the South of France and Monaco and Spain. This is a predictable result, with these areas being under the most demand for berthing space with the numbers of berths having reached these levels due to high demand.
Number of berths versus number of yachtsFigures 4 and 5 (overleaf) show that as the fleet has grown so too the numbers of superyacht berths in the world have been climbing. This is presumably due to the increased numbers of marinas being opened in response to demand and the potential of the marinas business and the expansion of existing facilities for the same reasons.
Mirroring the breakdown of the global superyacht fleet, the most numerous berths are those between 30 and 40 metres. All size brackets have seen an increase in numbers of berths over the 2006-2010 period. Growth in berth numbers has generally been in line with the growth in numbers of yachts in each size category that have launched. With ongoing fleet growth, the continued increase in the number of berths should also be expected. Of course, whilst numbers of berths and yachts seem to correlate quite nicely, it is important to remember that just because there might be enough berths for every yacht in the fleet, this does not mean that these berths are necessarily where a yacht might need them to be. Twenty-five 50-metre berths available in Abu Dhabi are irrelevant if the owner of a yacht wants a berth in Nice and can’t get one.
Figure 6 shows the breakdown of the numbers of superyacht berths in 35 countries, and the growth in numbers of berths during the 2006-2010 time period. Whilst the numbers of berths in some countries have remained static, growth can particularly be seen in Spain, Italy, the United States and Turkey and Monaco, presumably in response to increased or anticipated demand on the regions. What is interesting to note is the lack of growth in France, perhaps suggesting a saturation of the current space and an inability to significantly increase numbers of berths, despite the clear demand on the area. This highlights opportunity for marina operators looking to capitalise on the increasing market of yachts looking around for alternative berthing space. Some examples of how this has been done already by marina operators can be found on page 18. Numbers of berths per country by size bracket can be found in Figures 7 to 13.
425
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Figure 2: Number of superyacht marinas – Mediterranean breakdown
TUNISIA MONTENEGRO CROATIA CYPRUS
GREECE ITALY MALTA
SPAIN TURKEY MOROCCO
51
70
Figure 3: Number of superyacht marinas – Caribbean/Florida breakdown
FLORIDA
CARRIBBEAN
12
SOUTH OF FRANCE& MONACO
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Figure 6: Number of available superyacht berths by country (year on year)
30-35m 35-40m 40-50m 50-60m 60-75m 75-100m 100-150mSIZE CATEGORY
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Figure 4: Number of yachts in the fleet by size bracket
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AnalysisoftheMarinasSector AnalysisoftheMarinasSector 5
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Figure 5: Number of berths (owned and for sale) by size bracket
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AnalysisoftheMarinasSectorAnalysisoftheMarinasSector
Figure 7: Number of available 30-35m superyacht berths by country (year on year)
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Figure 8: Number of available 35-40m superyacht berths by country (year on year)
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AnalysisoftheMarinasSectorAnalysisoftheMarinasSector
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Figure 10: Number of available 50-60m superyacht berths by country (year on year)
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11AnalysisoftheMarinasSectorAnalysisoftheMarinasSector
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Figure 12: Number of available 75-100m superyacht berths by country (year on year)
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13AnalysisoftheMarinasSectorAnalysisoftheMarinasSector
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Figure 13: Number of available 100-150m superyacht berths by country (year on year)
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Camper & Nicholsons’ Yas Marina, Abu Dhabi
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MANAGED BY
Naturally BeautifulNestled on the coastline of the Musandam peninsula’s rugged mountain fjords, Zighy Marina is a sustainable, boutique marina destination offering 60 berths. Designed in the traditional architecture of Oman, the marina is a mere two-hour drive from Dubai and it offers spectacular scenery, great water sports, and fascinating marine wildlife. Zighy Marina sits on Zighy Bay, adjacent to the Six Senses Resort - it enjoys some of the best views in Oman.
T. +968 95 95 97 52 / E. [email protected] / www.zighymarina.com
Z I G H Y M A R I N AN A T U R A L L Y B E A U T I F U L
25° 42’ 08” N 56° 16’ 34” E
15AnalysisoftheMarinasSector
Berthing 90-metre+ yachtsOne issue that we have addressed many times in print is the increasing numbers of larger yachts, and the question of where these yachts can be housed, and also refitted. The number of marinas and facilities able to host larger yachts is, naturally, limited. As the fleet continues to grow, so too do the number of yachts of 90 metres+, as shown in Figure 14. Increased numbers of yachts in this size bracket are being commissioned, with 46 currently delivered and another 15 in build. Yachts of this size make up a very small proportion of the fleet, but their increasing numbers will nevertheless put increasing pressure on marinas and their ability to house yachts of this size.
As Figure 15 shows, albeit from a Mediterranean only perspective, the rate of growth in the number of berths that are able to host a 90-metre+ yacht is not as sharp a growth as the numbers of the 90-metre+ yachts being launched.
Rental and purchase prices of berthsHow much a berth costs to rent can often be the most important determining factor in terms of numbers of yachts visiting a marina. It is also an interesting reflection of which are the most popular locations based on the prices that can be demanded for a yacht to stay in each location.
The Top 15 most expensive marinas list published by Engels and Völkers (as covered on page 30) piqued a lot of media interest and highlighted just how much money superyacht owners can be expected to pay to berth their yacht at some of the premium facilities around the world. These prices may also be some reflection of why we are seeing increasing trends of owners looking at different berthing options, both from a location and price perspective. Although these 15 marinas represent the most expensive, the range of tariff prices across the globe is vast.
Figure 16 shows a cross section of tariff rates in Mediterranean destinations (minimum and maximum prices) and Figure 17 the same cross-section for the Caribbean and Florida. As the average LOA of all delivered superyachts is 40.12 metres, a 40-metre yacht was selected as the sample size to display the tariff prices for. Italy is demonstrably the most expensive country to berth a 40-metre yacht on maximum rates, with the average maximum being 2,191 Euro. Spain, similar to Italy, has a large gap between the average minimum and maximum rates. Suprisingly, Croatia also has a high average, perhaps reflecting its increased popularity as a destination.
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Figure 14: Growth of the number of 90-metre yachts
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© 2
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19NewMarinas–planningandexecutionAnalysisoftheMarinasSector
Europe’s most popular and fashionable marinas are full to bursting, with escalating mooring fees and berths for the high season
fully booked many months in advance. Those who invested in space in prime locations are now sitting on a valuable asset. The superyacht fleet, however, continues to grow both in length and numbers and it is increasingly difficult for owners to get a berth in their first choice location. Despite tough times throughout the superyacht industry there is a pressing need to update and expand the yachting infrastructure in popular and upcoming cruising grounds.
We interviewed nine marinas that have opened in the last five years about the difficulties they faced opening on the eve of, or during, the economic crisis, and why they felt the time was ripe for a new facility in their region. Marina at Marigot Bay on St Lucia opened in 2006, whilst Vilanova Grand Marina in Barcelona, Epic Marina in Miami and Porto Montenegro have all been up and running since 2009. Alcaidesa in La Linea de Conception in Northern Spain opened its doors in 2010. Karpaz Gate in the Turkish Republic of Northern Cyprus (TRNC), The Emirates Palace Hotel Marina in Abu Dhabi and Lusail City Marina in Qatar have only been in operation for a matter of months. Lastly, Victoria International Marina is still negotiating the final details of its building permits and construction is due to commence at the end of the year.
Market Research Prior to Construction In all nine cases plans to create new facilities were driven by the belief that the absence of a similar facility or excess demand elsewhere would drive business to the marina. In the case of the new marinas in Europe, their management teams were confident that there would be an osmotic movement of yachts from existing overcrowded established marinas to a new and spacious port. Nevertheless, it is essential to carry out extensive market research before submitting plans to the local authorities.
The management of Porto Montenegro explained: “We used one of the leading European consultancies to implement a comprehensive market research analysis for us. Their task was to advise on the size of vessels a new marina could attract and, allied to that, its
potential client base.” There was no comprehensive marina facility in the TRNC, so Karpaz Gate did not have a ready point of comparison. The management company of Karpaz Gate commissioned a study of potential long-term and short-term clients and a competitor analysis of all the marinas in the Eastern Mediterranean before designing their business model. Vilanova Grand Marina in Barcelona is closer geographically to the traditional superyacht hot spots. Based on overcrowding elsewhere, the developers made the intuitive decision to build Europe’s first specialist superyacht facility. The waters around Alcaidesa in Northern Spain are not a fashionable cruising destination, but they do see high volumes of yacht traffic travelling to and from the Mediterranean. Prior to being awarded the concession, a study was carried out to assess the level of demand from local, transit and major European sailing communities.
Marina at Marigot Bay was developed from facilities that had previously been used exclusively by a local charter company. The developers felt that the bay had a lot more potential to attract visiting yachts considering the beauty of this sheltered location. Their business plan was based on a ‘push’ strategy; the developers identified an opportunity and proceeded to market it rather than popular demand driving the development.
A similar strategy is evident in the approaches of the two Middle Eastern respondents. Whilst interest in yachting as a pastime is growing in this region, it is far from the levels seen in Europe or the US. However, various developers are aware of the potential of the market and have sought to provide the infrastructure to aid its growth. Lusail City Marina is part of the wider Lusail City development. Upon its completion, Lusail City is intended to become one of the most futuristic cities on the planet and a superyacht marina is well suited to its luxury focus. With this in mind, marina operator Mourjan Marinas IGY was awarded the contract to manage the facility.
Feasibility studies are one of their key offerings and extensive analysis of market data was carried out to establish how to compete effectively in the Middle East. The developers of the Emirates Palace Hotel Marina, on the other hand, had a more straightforward task. The marina is part of the Emirates Palace Hotel, one of the most luxurious
NewMarinas–planningandexecution
For those looking to purchase, rather than rent, a berth at which to base their yacht, Figure 18 demonstrates that predictably they can expect to pay a high premium for berths in the most popular areas. Unsurprisingly, the graph shows that berths in the Mediterranean are considerably more expensive than elsewhere, and there is a clear pecking order by price with France and Italy predictably topping the list.
This graph serves as a guide to berth prices as there are, of course, considerable variances between marinas in each country and also between the cost per metre for a 30-metre berth and a 100-metre berth.
ConclusionIn conclusion, the above data demonstrates that whilst the number of marinas and berths is increasing with regularity each year, the numbers of berths and marinas in the most popular cruising zones will continue to be under pressure and the cost of buying and temporarily renting a berth in these locations will reflect this. The pressure on popular areas will likely continue to drive the development of newer marinas and accompanying facilities, with additional motivation for new marinas being the desire to capitalise on the lucrative marinas market.
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Camper & Nicholsons’ Grand Harbour Marina, Malta
21NewMarinas–planningandexecutionNewMarinas–planningandexecution
hotels in Abu Dhabi, and its existing marina was well out of date. Considering the hotel’s HNWI clientèle, there was a natural demand for a proper superyacht facility.
It was not difficult for the developers of Epic Marina to gauge demand as, despite multiple facilities in nearby Fort Lauderdale, the decadent city of Miami was completely without a superyacht marina. Instead of breaking new ground Epic was developed from an existing, out-of-date facility. On the other hand, WAM development, the company responsible for Victoria International Marina, realised that the Pacific Northwest was almost a completely blank canvas for superyachts. Vice-President of WAM Lachlan MacLean explained the initial logic behind the plans: “It started with anecdotal evidence from just about every marina in SW British Columbia having waiting lists. Further investigation found that most marinas in this part of the world were built 30+ years ago, and had little or no capacity for boats over 50 feet in length, so couldn’t cope with the trend of people wanting larger recreational boats.” This observation was followed by extensive market research with associated marine business to assess their level of demand for comparison purposes.
Market research governs any new marina’s plans as it measures demand, the needs of future clients and determines pricing. It indicates the effect it will have on the local community, which is an integral part of gaining planning permission.
The Economic Advantages of a New MarinaA comprehensive, well-managed and well-marketed marina in an appropriate location should, over time, become a hub for nautical tourism. This inflow of tourist cash can be a powerful catalyst for regeneration and growth in a region, and this effect can already be witnessed in many of the marinas surveyed.
Karpaz Gate is the first luxury marina in Northern Cyprus, and is opening up a previously inaccessible cruising ground. The marina has only just opened so its impact on tourism income is not yet apparent, but it has already created jobs and the local government welcomed the development. It took the developers only 10 months to gain approval for the project. Porto Montenegro received similar support; they took a redundant military base and transformed it into a nautical village with multiple divisions and job opportunities. The management worked closely with the government to develop the plans, and as a consequence it took only 12 months to gain planning permission.
Vilanova’s pitch to the local authorities echoed that of Porto Montenegro and Karpaz Gate. The management was confident that the marina would generate jobs and income as well as promoting Vilanova as a tourist destination. Planning permission was granted within 18 months after an environmental impact assessment had been carried out. Alcaidesa Marina was an integral part of a plan to regenerate La
Linea de Conception’s waterfront and boost the local economy; despite support from the authorities, it still took four years for the project to gain approval.
Marina at Marigot Bay was the result of a conscious effort from regional authorities to regenerate the area through yachting tourism. Marina Manager Bob Hathaway outlined the way Marigot is spearheading this initiative alongside the IGY facility at Rodney Bay. Every effort has been made to maximise tourist income, “This has resulted in the appointment of a consultant director in the Ministry of Tourism with specific responsibility for the development of the yachting industry, significant improvements in Customs & Immigration arrangements and substantial support for training and development projects in and around the yachting industry.” Despite this initiative from the local government, extensive market research meant that it still took five years for the project to commence.
Like Marigot Bay, Lusail City is a government-driven initiative, so the marinas within the development were pre-approved before developers were invited to bid for the project. There are seven marinas in total and all will be operated by Mourjan Marinas IGY, although only one has the capacity for superyachts. The overall aim of these facilities matches that of the other respondents: they are intended to benefit the future residents of the city. However, instead of providing jobs and facilitating economic growth they are primarily intended to meet the community’s leisure needs. Katrin Mueller, Marketing Manager of Mourjan Marinas IGY, explained: “The seven marinas under Mourjan Marinas’ control will be aimed at different niche markets, demographics and varying boat sizes. Thus there will be something for all the people of Qatar.” As a consequence of this, Mourjan Marinas IGY only waited two months between bidding for the project and being awarded the contract.
Victoria International Marina was the brainchild of WAM developments; they spotted the opportunity that superyachts represented to the region. McLean explained, “The new marina will accommodate the latent demand for permanent and transient moorage here in British Columbia. This has a positive flow-on effect to the local community in terms of jobs, community access and services.” But the local planning authorities were wary of the proposed development and the original plans had to be scaled back. It has taken six years for the project to gain approval and the final permits are still pending.
It is much more straightforward for developers to
build in areas where the government is looking for additional revenue streams. Regions that already have a profitable tourism are anxious to preserve their coastline. Many developers have had to curtail their plans in order to gain planning permission; it is important that any designs are sensitive to the surroundings.
Effects of the Global Economic Crisis Like the existing marinas, all of these new marinas have had to contend with the difficult market conditions created by the global financial crises. Many have had to adapt or streamline their business model to ensure they can compete, as most of the original plans were conceived when the superyacht industry was at its peak. There is no uniform means of securing investment for a new facility. Most of the featured marinas used a combination of revenue streams to raise the initial capital, including share capital, corporate investment, bank loans/mortgages and revenue from onsite businesses. In all cases, the marinas success in securing investment was dependent on the management being able to prove that the project was economically viable in the long term. Like any development, a thorough approach at the planning and market research stage was imperative.
The number of superyachts visiting the southern part of the Caribbean is well down on previous years, with a number of famous and beautiful anchorages in Saint Lucia and Saint Vincent and the Grenadines empty for days on end after the initial Christmas and New Years rush. Despite this, revenue from long-term berthing has been largely unaffected and has even grown slightly as owners look for viable and cost-effective homeports. The management of Marina at Marigot Bay argues that the recession has forced managers to “keep the pencil sharp” and think outside the box in the development and marketing of the facility.
Porto Montenegro had the benefit of an experienced management team to steer their strategy: “We saw it as an opportunity to position Montenegro as a high-end destination and Port Montenegro specifically as a premium marina with deliberate competitive berth and residential pricing compared with the Western Mediterranean.” Karpaz Gate also had the support of an experienced investor during the construction period and they realised that demand in luxury markets will always fluctuate. This support will be invaluable to Karpaz in its first few years.
Vilanova was forced to amend the intended structure of the marina in order to compete, its manager
Camper & Nicholsons’ Yas Marina, Abu Dhabi
NewMarinas–planningandexecution
Ignacio Erroz explained, “We decided to reduce the number of moorings and increase the length of yachts we could accommodate. Now we have 49 moorings from 25 to 80 metres.” Originally, Vilanova had planned to have 76 moorings between 20 and 60 metres. “In order to survive the current economic climate, we understand we have to ensure the quality of our service and also the competitiveness of our facility by adjusting our berth rental and purchase fares,” Erroz continued. Alcadaisa and Epic Marina have had to respond to the economic conditions in a similar way to Vilanova, by offering a comprehensive service at very competitive prices.
The recession has affected developers in Lusail City; many are in dire need of long-term contracts. It forced Mourjan Marinas IGY to be more ruthless when bidding for the concession to manage Lusail’s marinas. However, once they won the contract Mourjan Marinas IGY were upbeat: “There is no discernable reduction in boat owners and interest in high-quality well managed marina facilities so we remain very positive.”
Secondary Sources of RevenueOur research showed that developers of new marine infrastructure often choose a location that gives them enough space to create a comprehensive facility to absorb the business from other oversubscribed marinas. Or they are building in less developed regions that are trying to increase their nautical tourism. To attract guests, the marina needs to become more than a ‘boat park’, it needs to become a community. The sample of marinas surveyed is too small to prove this trend conclusively, but there is certainly evidence of it.
Karpaz Gate and Porto Montenegro are trying to establish their regions as popular cruising grounds and the concept of community is integral to the design of their marinas. Porto Montenegro commented, “These businesses are crucial for us as a
destination as they drive visitors to our site, provide a sense of community and help us round off our marina village offer.” Alcaidesa is aiming to meet the excess demand for berths in Europe; the marina is still a work in progress but it has devoted 25,000sqm of land to retail; they want to provide guests with a choice of locations to socialise. Marina at Marigot Bay has a similar perspective, “Commercial retail tenants are an important source of revenue but they are not the marina’s primary income. They are important because of the service they provide to hotel and marina guests.”
Victoria International, Vilanova, Epic and Lusail City have a more traditional business model because they are already part of tourist destinations. The town is the initial attraction and the marina’s facilities just need to meet the practical needs of boat, guests and crew.
The revenue raised by lease of the marinas land to independent businesses is not usually its chief source of income, but it yields a significant contribution to overheads. Ultimately, if marinas cannot provide a full service offering then guests will look elsewhere, so the marina has a symbiotic relationship with the businesses it has on site. Many marinas also have real estate for sale or lease, but this completely depends on the size and business model of the facility.
As the world emerges tentatively from the economic crisis, the managerial mantra in all areas of industry is one of ‘regeneration’ and ‘growth’. The opportunity that marinas present as a means of achieving this regeneration is an appealing prospect to developers and regional authorities alike. Marinas can profit from superyachts but they are not dependent upon them, and they have the support of multiple revenue streams. Investment in marina facilities cannot generate immediate stellar profits, but this type of project has a flexibility that is absent from other areas of the superyacht industry.
Camper & Nicholsons’ Grand Harbour Marina, Malta
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25MarinaOperatorsMarinaOperators
Over the past 15 years there has been significant rise in the number of companies operating chains of branded marinas and
the number of individual facilities they operate. This is not a new business model, but the growth of the superyacht fleet has presented greater opportunity to profit from offering a network of luxury berths.
Business Model & Branding Marina operators are a key market force because they offer a standardised service in a disjointed market. There are multiple examples of the marina operator paradigm. [Despite their longevity Camper & Nicholsons Marinas International (CNM) only own and directly operate three facilities although they have current and future involvement in four more.] IGY (Island Global Yachting) run 12 marinas directly in six countries; they have grown quickly considering they only entered the market in 2005. MDL was founded in the 1970s; they now operate 19 marinas in the UK and have two European facilities, one in Italy and one in Spain. Mourjan Marinas IGY was established in 2009; it has a strategic partnership with IGY and up to now has focused on the emerging Middle East and North African markets. ACI Marinas (Adriatic Croatia International) have been in the industry for 25 years and have been influential in opening up the Adriatic as a cruising ground. ART Marine LLC opened in 2005; they have four facilities in the Middle East and are seeking to expand their network as quickly as is expedient.
Marina operators draw on a business model common in the tourism industry: they become first choice for superyachts by building a reputation for comfortable facilities with a layer of luxury tertiary services. This reputation can be transplanted across locations, creating a brand preference for the chain. CNM state in their corporate information; “CNM aims to consolidate a highly fragmented market and deliver a compelling investment case for marinas as an asset class.” Marinas are more resistant to the forces acting upon the macro economic environment than other areas of the superyacht industry. They are not dependent on luxury yachts for income. For example IGY position themselves as a luxury brand but of the 1,700 slips on their portfolio only 250 are superyacht berths. Marinas can generate revenue from smaller yachts, management services, hosting events and long-term berthing.
Investment Flexibility is often an appealing prospect and established operators are seen as a safe vehicle for investment in this market. CNM has been listed on the AIM London Stock Exchange since 2007 and many operators have avenues for investment. Ready capital to fund new projects is obviously essential for the growth of marine infrastructure and the involvement of marina operators will be key for the development of new regions. Yachting Partners International (YPI) have been an early entrant into the emerging Asian market, launching YPI Asia in March of 2011. Similarly, CMNI have recently announced that they are forming a partnership with Brazilian company BR Marinas to build a specialist superyacht facility in Rio de Janeiro. Their confidence may means that other investors will follow their lead.
Operators may own their marinas or manage them as part of a third-party agreement, or have a mixture of both in their portfolio. Also, their corporate expertise can easily be applied to other independent marinas and many operators have created profitable planning and consultancy departments by breaking down the value chain and retailing each aspect of it individually. Services offered include feasibility studies, market analysis, marina layouts and design, marketing and branding, legal advice, staff training and operational management.
Destination Marketing The standard marina business model relies on the marina’s location to attract yachts. Whilst the area surrounding it is very important a marina can become a destination in itself if it is treated as a resort and marketed accordingly. CNM explained the potential of this strategy; “Successful developments have the opportunity to create ‘destinations within a destination,’ [which] generates opportunities for local businesses, new leisure facilities and a wide range of amenities. This has the potential to contribute greatly to local economies as well as significantly increasing the value of property surrounding the marina.”
Destination marketing is vital to ART Marine’s approach, and manager Bruno Meier explained the company’s ethos; “We try to develop a specific ‘personality’ for each marina. For example, Zighy Marina is an eco-friendly marina, where the berth
MarinaOperators holders are encouraged to go back to nature and enjoy the laid back atmosphere of the marina and the Six Sense resort nearby…At Emirates Palace it is rather the opposite; everything is done with luxury and exclusivity in mind, in order to blend in with the palaces standards.” Each marina has its own personality but each is expected to conform to ART’s brand standards.
To succeed in this strategy, marina managers need to have a comprehensive understanding of branding and destination marketing. This is essential in upcoming cruising grounds, as sailors need to be persuaded to break their habits and go somewhere new. Operators have the advantage in this regard because they have the resources and the experience to promote a marina in this way.
Marina Operators in the Local CommunityA new marina can benefit a community by facilitating tourism and creating jobs, but despite this most communities are likely to be wary of large multi-national corporations and large-scale construction projects and it is important for marinas to counter this. IGY has a strong corporate social responsibility track record. After Hurricane Tomas hit St Lucia in 2010, IGY shipped a mobile desalination plant to deliver fresh water to the community. On St Maarten, IGY worked with local environmental groups to fund the acquisition of a mobile pump-out station to create a cleaner Simpson Bay Lagoon. It has also been involved in various charitable initiatives in all of its locations. IGY explained the significance of its activities, “We believe that our success is tied to the success of the countries and communities in which we operate…We also use our knowledge and resources to work with local tourists and governments to lobby for changes in regulation that will promote and foster nautical tourism.” CNM believe that it is advantageous for an experienced operator to run a new marina, “We think it is very beneficial as we are able to use our global knowledge and experience, while implementing it locally following cultures and traditions and employing local people.”
Essentially, it doesn’t matter who is running the facility as long as it benefits the community and is ecologically respectful. Operators have an advantage because they have the experience to build, market and, crucially, integrate a new marina into the region’s infrastructure. There have been other cases in the tourist industry where the influx of visitors to a site
has been so rapid the infrastructure has been badly planned and rushed. Established marina operators can prove that they have the experience and resources to develop a facility that is viable in the long term.
Expansion Plans & New Markets There is greater optimism for the future in the marina market than in other areas of the industry. The 2011 Forbes Rich List2 highlighted that there are now more billionaires than ever before (1,210), with big jumps in the numbers of UHNWI in the BRIC countries (Brazil, Russia, India and China) and in the Asia Pacific Region. Regional superyacht associations have been set up in many places to promote the industry, and some of the most high-profile marina developers and operators have been quick to position themselves in these emerging regions.
Mourjan Marinas IGY established their brand in the MENA (Middle East North Africa) markets, but are ready to examine the potential of new regions. “From the middle of 2011 and increasingly during the 12 months thereafter, you will see our brand prominence in the Mediterranean escalate as we grow our network of facilities in this mature market. Australasia is of strong interest to Mourjan and demonstrating increasing ability to take its place in the international cruising pattern; that same two-year period will see us take an increasing profile in these markets.”
ART Marine, on the other hand, will be expanding their chain of boutique marinas: “We plan to add at least two marinas to our network every year. However, the number of marinas operated is not an important criterion, but rather the quality of the locations [and] the quality of our services.” ART is one of the first operators to try this boutique concept across a network and success would be likely to have an impact on the strategy of other entrants to the industry.
Operators have the investment capital to fund growth, and have the market intelligence to spot emerging trends. They will be a key force for growth in new regions, and their influence will work influence standards in the industry as more independent marinas buy their management services or imitate their business strategy.
2 www.forbes.com/wealth/billionaires
27EnvironmentalMarinaManagement 27
Ayachtsman should champion any initiative that protects the cruising grounds they love. But, until recently, most of the existing
marine infrastructure has been inadequate to allow recreational sailors to do the ‘right’ thing environmentally. International legislation acts to limit the impact of all shipping activity, but the development and regulation of land-based marine facilities is a matter still governed by local and regional authorities. As a result, there are varying standards of environmental marina operation across the world. A marina trades on its location and managers are waking up to the fact that it is in their best interests to provide their guests with the means to protect it.
PollutionThe MARPOL regulations were designed to address the levels of pollution from maritime transport and yachts and nearly all registries are required to conform. 135 countries are parties to the convention, representing 96 per cent of the world’s shipping, and member nations are responsible for monitoring all vessels. Yachts are guilty of leaking pollutants such as bilge water, lubricants, fuel and black and grey water into the sea, on top of carbon emissions from engines. But the volumes involved are tiny comparatively, and chemically the overall impact of the recreational yachting industry, even superyachts, is minimal compared with the impact of commercial shipping. A study commissioned by the European Confederation of Nautical Industries (ECNI) in 2009 found that recreational yachting accounted for just less than one per cent of the pollution affecting the marine environment. Land-based activities and atmospheric inputs are responsible for 44 per cent and 33 per cent of marine pollution respectively, with all maritime transport contributing 12 per cent to the total figure.
The Impact of Yachting The consequences of pollution from recreational yachting is largely aesthetic; even though the industry is a minor environmental offender compared with shipping and fishing, its impact can be highly visible, particularly in areas of concentrated activity. Discharge of sewage causes temporary discoloration of the water and an overpowering smell, whilst bilge water leaves that telltale rainbow sheen. Marinas can help protect these cruising grounds by providing waste-oil disposal and sewage pump-out.
The Operational Impact of Marinas Marinas are an environmental anomaly in recreational yachting because the failure or misuse of installations or equipment can have a serious impact. Pollutants can enter the environment in dangerously high volumes. Fuelling stations, sewage pump-out facilities out or the lack of them, the accumulation of rubbish from all visiting yachts and waste from refit and repair yards all pose a threat if they are not properly managed. The underwater structure of the docks inhibits the flow of the water and can cause it to stagnate or renew itself very slowly. The impact of a marina can be reduced if it is addressed in the planning phase and actively managed in the facility’s day-to-day operations. Environmental advocates argue that marinas must do more than the bare minimum to meet local regulations and take the initiative in managing their impact.
Not only is this the responsible source of action, it also makes economic sense. The managers of a clean, well-operated marina will have their clients’ confidence, and guests will be grateful if the marina provides them with the facilities to protect the cruising grounds they love.
Environmental Initiatives IS014001 is a standard environmental managerial framework for any organisation designed by the International Standards Organisation (ISO). It is based on the principle of continuous improvement and the first phase of the scheme is broken down into stages of ‘plan, do, check and act’. At the ‘plan’ stage the marina must thoroughly assess its impact and devise a strategy to address it that is both specific and achievable. The ‘do’ stage is the practical implementation of this strategy and the ‘check’ phase examines how effective the strategy is. Lastly, the ‘act’ phase acts upon any recommendations made at the check phase. The second phase is ‘expansion, enrichment and upgrading’, where the scheme is extended to cover more business areas and where the structural framework of the strategy is streamlined. To gain certification the company must then be audited by one of the accredited bodies, for example Lloyd’s, Der Norske Veritas or Bureau Veritas. There are multiple companies and they must be listed on the ISO’s register of certificating bodies. Certification is usually valid for a period of three years. Considering that compliance is such a rigorous
EnvironmentalMarinaManagement
M A R I N A
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- 480 volt 200- amp power
- Restaurant and spa docking
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EPIC Is tRulY thE ultIMAtE luxuRY DEstINAtIoNLocated in Downtown Miami, where Biscayne Bay meets the MiamiRiver. EPIC Marina offers direct dockside access and 900 linear feetof full service, deep water slips accommodating yachts over 300 feet.
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11EPIC077 Yacht report ad_layout 1 7/12/11 3:34 PM Page 1
EnvironmentalMarinaManagement
and time-consuming process it is unsurprising that marinas with ISO14001 are not that common. Nonetheless, it has become commonplace for marinas to provide recycling facilities and waste-oil collection, particularly in Europe, the US, Australia and New Zealand. Sewage pump-out, however, is not as widely available as it should be and MARPOL regulations governing the discharge of holding tanks are often ignored.
A marina’s environmental management strategy needs to connect smoothly to the infrastructure in the wider region. Many facilities in undeveloped or island communities try to deliver both a luxurious and an environmentally sound service. Despite efforts, the case may be that the region’s wider infrastructure (transport, garbage, sewage, recycling) is already inadequate or cannot take the extra strain placed upon it by the influx of yacht traffic. If marinas are not carefully planned they run the risk of damaging the landscape that their guests come to enjoy. Developers responsible for developing marinas for regions that are trying to dramatically increase the number of visiting yachts and superyachts, such as Asia, the Pacific and the Middle East, need to understand where new facilities will fit in the region’s existing infrastructure.
Oscar Siches, manager of Marina Pantalan del Mediterraneo, ICOMIA Member and independent marina consultant, argues that local authorities across the world are dismissive of the economic significance of marinas and therefore it is difficult to get their needs legislated for. He explained the situation further: “The lack of common language between
marinas and authorities is the biggest impediment to achieve the right balance between marinas and general coastal resources. The only way [forward] I see is for marina managers/directors of a certain region to explain the marina business and social impact to the authorities. A good economical impact study should always be done, as authorities do not understand subjective reasons but believe in numbers.”
Environmentalism as an Opportunity A well-planned and well-operated marina can become an integral part of the community and can be a means of promoting development or regeneration through nautical tourism. Locals should be encouraged to take an interest in its management; in the most mercenary sense, environmentally sound operation protects a community’s livelihood. Siches insists, “Everybody can implement and environmental strategy without any extra cost. The secret is to tailor such a strategy to your real possibilities. A basic start is a lot more than no start at all.”
A larger marina with comprehensive facilities can become a hub for the yachting community, and the environmental care that it demonstrates sets an example to its guests. Environmentalism can also, to the cynic, present an opportunity. The impact of yachting can be reduced if individuals take responsibility for their activities and the process of educating marina users in sound environmental practice becomes a form of marketing in itself. A marina that can provide the primary and ancillary services for yachts to do the right thing will immediately have a competitive advantage.
Camper & Nicholsons’ Port Louis Marina, Grenada
GHANTOOTM A R I N A & R E S O R T
MANAGED BY
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T. +971 2 562 9168 / E. [email protected] / www.ghantootmarina.com
24° 51’ 35” N 54° 53’ 40” E
Abu Dhabi approx 40 mins >< Dubai approx 40 mins
Club De Mar – MallorcaOur Club installation is managed through three basic goals: security, privacy and exclusivity. Private harbour.
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Club de Mar ad SIQ10.indd 1 13/07/2011 17:12
31Interview:RobertPerrochioofICOMIAEngel&Völkers–the15mostexpensivemarinas
From 10 to 12 of May this year, the International Council of Marine Industry Associations (ICOMIA) held its triennial World Marina’s Conference at
Singapore’s Swissotel The Stamford. 270 marina industry professionals attended the event; topics for debate included marina operation and management, planning and development, online marina promotion and management and marina industry education and training.
SIQ interviewed Roberto Perocchio, Chair of the ICOMIA Marinas Committee, about the latest conference. Roberto was born into the marina business, as his family established Marina del Cavallino near Venice in the 1970s. Roberto has been head of the business since his father passed away in 1989. He has also been President of the Venetian Caravan Park Association and President of Venice Yacht Pier whilst remaining closely involved with the operation of Marina del Cavallino. Roberto is currently President of Assomarinas, the Italian marina association.
How long have you been involved with ICOMIA?I’ve been involved with ICOMIA since 1990 when we founded the ICOMIA Boating Facilities Committee, which is now the ICOMIA Marinas Group. There was a deep lack of information about marinas in many countries at that time, and ICOMIA understood it was necessary to provide emerging countries with a better flow of information concerning marinas, their best construction and management practices, their importance for coastal economies and their contribution to international tourism. Thus we decided to start our outreach activity…organising successful meeting in many different countries and preparing a world marina conference every three years to stimulate contacts among marina operators, and to invite national and local authorities in order to drive their attention to marina related investments and permits.
What was the most positive outcome of the event? At past conferences, delegates from all over the world could find a lot to discuss and learn. The same applies to educational field trips like visits to Amsterdam, Genoa, Fort Lauderdale, Sydney, San Diego and Ostend. But this Singapore edition has been far more successful in terms of contacts with emerging markets and enthusiasm for the future growth of leisure activities. The conference has
produced an acceleration of the positive relationship between the experienced North American, European and Australian delegates and their Asian counterparts with their plans for waterfront regeneration.
Why did ICOMIA choose to hold the event in Asia?ICOMIA has been looking for the opportunity to organise the conference in Asia from the very beginning of its action in the marina business, but it was difficult to find the right local partner until we reached the agreement with the newly born Singapore Boating Industry Association.
Which regions do you think are going to see the fastest rates marine infrastructure growth over the next few years?The Singapore conference made clear that South-East Asia will be a fast growing cruising field in the next years. Its network of islands covers a surface that is double the Caribbean and the Mediterranean put together. It also has a natural biodiversity in terms of reefs and beaches. This growth will be boosted by the quickly emerging Chinese and Korean yachting markets; the populations of these countries are not really accustomed to boating yet, but there are signs of the enormous potential of this market. Expectations are high also on the Russian market and its impact on the Black Sea and Mediterranean; also Brazil, where the government is encouraging waterfront rejuvenations initiatives in order to be ready for the big international events that Brazil is going to host in the future.
Are there any marina management issues that you felt were neglected by the conference? All marina management issues were covered by the conference to the full satisfaction of the delegates; from new planning trends to dry storage structures, environmental best practice and certification to insurance contracts, and marina real estate valuation to modern marina facilities. Many participants have been asking to have another ICOMIA Marina Conference within two years instead of three, in order to keep closer ties among the worldwide marina operators community.
Interview:RobertPerrochioofICOMIA
In May 2011 the luxury real estate and yacht agents Engel & Völkers published a list of what they ranked as the top 15 most expensive marina berths in the
world. The prices commanded by the marinas featured highlight the potential of the marina market and also the shortage of premium superyacht berths. The fees charged for a 55-metre superyacht during the high season was the variable used to form the list. The marinas are ranked according to the euro rate of exchange as of 3 May 2011.
All but one of the marinas on the list is located in Europe. A concentration of HNWI combined with an established superyacht culture makes Europe a ‘honey pot’ destination for yachts. Marina Grande and Porto Cervo – in first and second place – are on the islands of Capri and Sardinia, whilst Marina di Portofino is in the small fishing village of Portofino, Genoa. A 55-metre berth in one of these marinas will set a superyacht owner back between €2,100 and €2,585 per night. Spain and France each have three marinas on the list; the French Riviera has long been a popular luxury cruising destination and various spots on the Spanish coast and the Balearics have achieved the same status.
Yacht Haven Grande on St Thomas in the US Virgin Islands is the only marina outside Europe to appear. A spokesperson for the IGY operated facility explained the island’s success, “The convenience of St Thomas as a destination is largely due to Yacht Haven Grande – a marina built explicitly to accommodate large yachts.”
The marina has emphatically marketed itself as a luxury facility and this focus is reflected in the price of its berths.
Two Turkish marinas run by the Setur marinas chain have made the list, Marina Kalamis and Marina Cesme occupy 12th and 13th place. Harry Peralta, a broker at Engel & Völkers Yachting Shop in Marbella, gave his insight into the next ‘it’ superyacht destinations, “Turkey is becoming quite popular; there are a lot of Turkish buyers at the moment; also Croatia is seeing more superyachts – it has virgin coast, the superyachts are there and every year you see more.”
However, even top-end marinas haven’t been immune to the economic crisis. Peralta commented: “I can tell you that we have our office at Porto Banus and the marina is half empty because the prices are so high, yachts are moving to cheaper mooring due to the crisis that is going on all over the world. There are new marinas nearby, Sotogrande or Alcaidesa. The prices continue to rise and they never come down, so yachts go elsewhere.”
It is hard to find berths in the larger size ranges, demand exceeds supply which leads to such high prices. So whilst smaller yachts can pick and chose their berths, larger yachts don’t always have the luxury of choice. The growing fleet, combined with the rising fees in the top marinas, presents a significant opportunity for managers to attract superyachts looking for new marinas.
Engel&Völkers–the15mostexpensivemarinas
Place Marina Location PriceperDay 1 Marina Grande Capri, Italy 2,585 euro 2 Porto Cervo Sardinia, Italy 2,574 euro 3 Marina di Portofino Portofino, Italy 2,100 euro 4 Puerto Jose Banus Marbella, Spain 2,069 euro 5 Ibiza Magna Ibiza, Spain 1,643 euro 6 Port de Saint-Tropez Saint-Tropez, France 1,356 euro 7 Port Camille Rayon Golfe Juan, France 1,100 euro 8 Marina Port Vell Barcelona, Spain 1,084 euro 9 ACI Marina Split Split, Croatia 1,001 euro10 Yacht Haven Grande St. Thomas, US Virgin Islands 889 euro11 Port Hercules Monte Carlo, Monaco 888 euro12 Setur Marina Kalamis Istanbul, Turkey 882 euro13 Setur Marina Cesme Izmir, Turkey 743 euro14 Porto San Rocco San Rocco, Italy 720 euro15 Port de la Plaisance Bonifacio Corsica, France 690 euro
Figure 19: Ranking list of the most expensive marina berths in the world, according to Engel & Völkers
Conclusion
The fleet is expanding and even with the limited orders over the past 30 months, we can safely predict that the fleet will grow consistently for
decades to come. Therefore, as you can identify from the data and analysis we have delivered in this Superyacht Intelligence Quarterly, the demand for berths will continue in parallel. However, owners and their crew are not just looking for a place to park their floating asset for 12 months of the year, they need something more – they need to feel special, they need privacy, exclusivity, security and potentially a reason to spend money on services and the experience that the marina offers.
To pay for berthing alone would seem to be a simple way to make money for marina management and as a landlord of floating rental space, it may work as a business model for many, but I am convinced that for the future, a marina has to offer a little bit extra. Having been ferried from the jet terminal by limousine to the yacht, the marina needs to provide some form of special environment and experience on arrival. The idea of a superyacht just being parked alongside every other form of floating transport is probably the wrong approach, and while we have thousands of small yachts that need accommodating throughout the world, the economic impact of a large yacht probably exceeds the impact of 50 small yachts and I think that marina owners are now waking up to the fact.
It would be easy to predict that a marina packed with ageing 30-40-foot sailing and motoryachts, with remaining space for half a dozen large yachts, with possibly inadequate power and services, is probably going to have
to rethink its model. As a parking lot, the marina jammed full of annual berth holders and their average fees is a stable business with an easy process to control, but with the increase in the fleet of 30-metre yachts over the past two decades it would be easy to suggest that all marina owners and operators may need to think big. I anticipate a similar growth figure over the net two decades, perhaps as many as 3,000 new yachts between now and 2030, with an average delivery of 150 yachts per annum. Therefore it makes sense, if the local authorities allow, for many of the current marinas to consider exploring a conversion plan from a general parking-lot style marina into a more luxurious boutique marina, exclusively for larger yachts.
Having recently visited the Marina Port Vell in Barcelona and met the new investors and owners of this perfect city-based marina, I saw the potential to change the business model from mass-market marina to a dedicated luxury location for larger yachts and their entourages. As the market grows and clients need their space, one expects the world’s marinas to rethink what they should be offering. To invest US$50 million into a floating asset and then to tie it up amongst a fleet of crumbling 1970s’ 40–50-footers is probably not what the clients are buying into. The lifestyle experience has to start at the dock and I am sure that marina operators and managers are trying to work out how to cope with the demand for 30-metre plus space and the annual multi-faceted fees they can attract. If they’re not, then hopefully this report will give them some insight and a reason to start. MHR
Conclusion–ParkingLotorLifestyleExperience?
Camper & Nicholsons’ Grand Harbour Marina, Malta
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