The yachting industry is almost unrecognisable from 20 years ago. There has been significant investment in marinas and yacht services, as well as in infrastructure to serve superyachts for refits. But is that it? Where can the sector seek new growth?
There are a number of initiatives already in the pipeline – like the new marina at Sa Maison – and others that are not – like a breakwater across Marsamxett. But overall, stakeholders across the industry seem positive about the future.
Melita Marine’s managing director Pierre Balzan remembers what the scene was like when the company was established in 1989: “Malta was a landmark destination for commercial ships, building on the traditions passed down from the days when Malta’s dockyards played host to the Royal Navy’s Mediterranean fleet. Commercial yachts were assured of a high quality service from the many experienced people working in the industry.
“But the superyacht industry per se had not been developed locally, although even back then there were three yards capable of handling superyachts. It is something of a testament to their reputation that all still operate today, although only Melita Marine Group is still under original ownership,” he said.
The growth of superyacht facilities could only come once there was appreciation of the fact that superyachts were not just a prettier form of commercial yachts.
“Our first priority was to start investing in commercially-trained people who could help establish a culture of excellence – bringing everybody involved round to thinking ‘white boat’ standards at all times,” he added.
“When starting out, the yards themselves reminded us of the uphill struggle upgrading the level of services and facilities would be. That said, the number of repeat customers and clients opting to winter in Malta make it clear that we are on the right track.
“Furthermore a growing number of yachts of increasing length are coming specifically for quality repairs or refits, testimony to the efforts being made to optimise facilities and services.”
He stressed that the superyacht industry would grow in Malta as long as stakeholders keep listening to clients and improving, a point also taken up by Marc Calascione of RLR Yachting.
“As someone who has experienced the superyacht industry first hand after a bout in that world, we can be assured that the potential is very real for Malta to reap reward by being a destination that owners and crew would consider in their re-fit and winterising plans. But although we have the geographical and financial facilities available, we are far from ready to provide the seriousness and professionalism of the necessary calibre,” he said.
Of course, superyachts are a high value-added economic sector but yachting encompasses a number of other activities. Creek Developments, which operates the Msida and Ta’ Xbiex Marina, only caters for boats of up to 22 metres in length, but a number of its berths are used by foreign visitors.
“Malta is a very popular destination for yacht owners, with an easily accessible location, mature yachting support service infrastructure, good weather year-round and crystal clear seas. There will always be strong demand for sheltered long-term berths, such as ours, because once boat owners take the decision to pay marina fees, they rightly expect their boat to be safe in all weather,” Sarah Gauci Carlton, Creek’s commercial manager, said.
For years, there were not enough berths for locals, let alone visiting foreigners, but this should become a thing of the past with the planned new marina in Sa Maison. Ms Gauci Carlton had advice for any new operator, however: “Focus on a continued high quality product rather than aiming at high volume, to ensure that Malta does not become a victim of her own success.”
“With a completely refurbished marina, we listen to our customers and continuously adapt to the demands of the market to ensure satisfaction, adding new facilities all the time. It is very satisfying when long term visitors return, year after year, bringing friends with them on each occasion, or when a visitor, who has travelled all over the world on his yacht, comes into the marina office and says, ‘Wow!’”
Notwithstanding certain drives by yacht charter companies and maritime institutes to encourage youths to join this exciting career prospect, uptake remains relatively flat
But the development of new marinas depends on providing crucial all-weather crucial shelter – and although the Chinese MOU signed with the Maltese government had envisaged a breakwater across Marsamxett to create safe berths, nothing more has been heard. She admitted that the breakwater would be a major investment due to the depth of water and the weather conditions that it will need to withstand.
“Any assessment of the worth of such a project will need to balance the environmental impact of reducing the flow of oxygenated water inside the bays, and the resulting effect on both the marine environment and the high density residential and commercial areas around Marsamxett, against the improved shelter for yachts berthed in Marsamxett,” she cautioned.
Joe Aquilina of BJ Marine Malta agrees that the berthing situation has seen huge improvements in recent years and is no longer a barrier to boat ownership. And the loss of hardstanding facilities on Manoel Island has not caused any problem: “There is a very efficient and professional yard on Manoel Island which can take hundreds of boats every year not to mention many smaller yards inland,” he said.
This infrastructural ability to service demand is vital for the company, which sells yachts from its offices at Grand Harbour.
“Certain people keep a boat for a lifetime and this is certainly feasible and has its merits. Very commonly, however, just as with cars or houses, peoples’ needs outgrow their boats and they decide to upgrade. We organise trade-ins for many returning customers whose families are growing and after two years decide they need something bigger. There are also people who want to make the change from sail to power and even those downsizing in their later years to something more manageable. On average our customers change their boats about every three to seven years,” Mr Aquilina said.
Some aspects of the yachting scene are innovative, like Azure Ultra, whose fractional boat programme has been “an unprecedented success”, according to its managing director Perry Newton.
The new venture was set up by the Azure Group, a European boat programme and fractional boutique-property company whose next venture is supercars.
The company will tap into its parent companies to ensure that it can cope with demand: “The key is to under-promise and over-deliver! We are well established and ahead of the game. Our parent companies hold major assets allowing us flexibility and adaptability,” he said, adding that as with many companies, the key to success lies with its people.
“Our skippers are the most experienced, competent and compliant in their field. Customer care and health and safety are vital and we demand absolute discipline. Our teams are passionate, proficient in sales, marketing and promotion,” he said.
More traditional charter is also now well-established. Niki Travers Tauss of Esprit Yachting and Strand Marine said the past 24 months saw considerable increase in demand in this sector.
However, there have been changes and although the market remains predominantly sailing yacht based, he has seen marked increases both in high-value motoryacht charters and a significantly growing trend in bareboat ‘Rib’ day charters by Maltese individuals.
“Local companies have been prompt to react and have increased their fleets to meet demand. In fact Strand Marine will operate three brand new Ribs for the 2016 charter season,” he said.
Running a charter operation in a small market has its own challenges and he admitted that economies of scale come with numbers “andonly a handful of operators are established with dedicated charter fleets”.
However, new business models have been created to cater for these aspects: there are programs which allow individual yacht owners to form part of promotion networks, taking advantage of the economies enjoyed by the larger charter marketing companies.
“We recently launched the Azimut Charter Club which allows owners of Azimut Yachts to benefit from our industry position, market reach and efficiencies in charter booking and yacht turn-around times.
“Most owners to date do not look at yacht chartering in terms or recouping investment, but rather as a way to reduce annual operating costs, this especially in the context of new large yachts. Clearly this is mainly dependent on how competitive one’s charter rates are and how available and ready for charter the yacht is.
“In the segments of sailing yachts and Ribs one may indeed look at return on investment in some cases where a proper charter management company manages the promotion and running of the charter operations,” Mr Travers Tauss said.
As with all sectors, growth brings human resource challenges and he pointed out that captains and crews form part of the skills gap.
“Notwithstanding certain drives by yacht charter companies and maritime institutes to encourage youths to join this exciting career prospect, uptake remains relatively flat. Possibly candidates do not correlate the fact that most superyacht captains and crews very frequently start their careers as general purpose deckhands aboard day charter yachts!”