When the chief executive of one of the world’s top 10 boat builders says he no longer wants to own a yacht, you know there is a sea of change heading this way.
“I don’t have my own boat. Maybe never. I want to focus on the experience rather than the item,” says Erwin Bamps, chief executive of UAE-based shipyard Gulf Craft.
The 47-year-old Belgian sits cross-legged inside the firm’s latest creation, Majesty 100, at the Dubai International Boat Show (DIBS), but he may as well be sitting in a five-star loft. Designed by the company’s in-house studio, the superyacht boasts floor-to-ceiling windows, extendable balconies, five staterooms and two 1,900 horsepower engines that can take it to a maximum speed of 23 knots.
So why wouldn’t anyone, including Bamps, want to own it?
“I think there are other priorities today than there were 10 years ago. People look for value for their money. It’s like when you look at my 13-year-old or myself, we look at ownership of the car and my son says, ‘can we rent a car for the weekend?’ For him, it’s not about ownership. For him, it’s the experience. With that change in behaviour around ownership, with Uber and AirBnb, and all of these things, it’s influencing how people spend money today,” he says.
In a city where everything from cars to cappuccinos is gold-encrusted, it might be difficult to grasp that Gulf Craft’s wealthy clientele are tightening budgets. But given the firm’s revenue remained flat in 2016 compared to a 5 percent increase in 2015, the Middle East’s rich might just have to make do without a 24-karat finishing.
“It’s another discussion [these days]. It’s not, ‘can you make this all Swarovski crystals? Can you make this all gold-plated?’ We made one yacht with an all-gold-plated toilet one time, 24 karats. It was very beautiful but, again, what is the value it return?” Bamps says.
The change in consumer behaviour has resulted in a wider market for yacht charters, putting customisation on the back burner all the more.
“There is more of a rental market. Therefore the owner is very much aware that his yacht has to please most. If he has to have the chance to retrieve some rental income, charter income, from the use of his yacht, then he better have a yacht that is pleasing to most people that are looking to rent one,” Bamps says.
“In the medium size yachts, I see [customisation] reducing. We have seen people prefer a boat that is well appointed but not eccentric because if they don’t go for eccentric design, they can go for a bigger vessel. Space is very, very important. People prefer not to have a crammed vessel, therefore find a vessel that is doing the job but not spending a million dollars extra to get it strangely customised, but rather use that money to buy a bigger model.”
Despite changes in demand and a flat year for Gulf Craft, Bamps is expecting smooth sailing in 2017 thanks to new partnerships in Europe with luxury yacht dealers such as Germany’s Drettmann International. After the Middle East, which contributes over 50 percent of the firm’s revenue, Europe is its second most important market.
“Europe is a very important market for us. And it’s very easy to convince Europeans now to make that six, seven-hour flight to come here. We believe that it’s the fastest growing market for us right now.”
The UAE-based firm is also making waves in its home base, where water-based projects in Dubai have helped raise interest in yachting.
“There are so many upcoming projects in Dubai like the Dubai Canal and the Dubai Harbour, how can you not look at the water? You either want to rent a boat or own one. I cannot believe that next year, there wouldn’t be a Chinese tourist visiting Dubai or Burj Khalifa and he would not try to get a ride on the Dubai Canal. So there’s a lot of development in that sense as water is seen as part of that essential tourism appeal of Dubai. That’s great news for us because it means there’s going to be a lot of demand for private boats but also operators who want to buy 10 boats and rent them out. We have a lot of clients like that in Dubai already,” says Bamps.
But the 35-year-old company, which is celebrating its anniversary this year, has seen its fair share of rising tides. Surprisingly, they did not come in the form of oil prices.
“The US presidential election affected us more than the oil prices. [The election] created confusion worldwide about where the world is heading as a whole, rather than what oil is going to do. Oil is a component, but the change of direction in the States has a far bigger impact on the global order of things and global business. It’s more about confidence issues,” Bamps says.
But he remains positive about the future, stating the company has always faced challenges in the form of prejudice due to it being a Middle Eastern firm.
Now based in Umm Al Quwain, Gulf Craft was founded in 1982 when major shipyards from the region were all but unheard of in other parts of the world.
“For us as a company in the Middle East, we’ve had our own prejudices against us. When I moved here 20 years ago, my friend said, ‘Well, we’ll keep your position open here in case you want to come back. I know you want to go on that adventure, but I’m not sure you should be doing that'. There are a lot of ideas on what this region is about. But we let people make their own opinion about what Dubai is about and what the Middle East is about and what it is not about. And unless you come here, you won’t know.”
While the shipyard’s weakest market is currently the US due to a lack in strong partners there, Bamps insists it is the one they are pushing the most. The firm is also taking a deep dive into the expansion of its production facilities as it prepares itself for megayacht construction, having acquired new land in Umm Al Quwain, Ajman and even the Maldives, where it produces smaller crafts and ferries. Yet the bigger challenge than acquiring new space to build new yachts is finding a local skilled workforce to do the work, according to Bamps.
“Unfortunately, that is very hard to find locally. So we’re hiring a lot of talent from overseas. And this is another issue. It means these people come and go. With that in mind, we have sat down with the government, universities and institutes to try and create vocational training and academic programmes to allow people that live in the region to get additional degrees in naval architecture or marine engineering and specialist training for yacht carpentry. And just to be enabling them to acquire these skills so we can put them in the business we have today,” he says.
Considering Bamps has been in the UAE for over 20 years, it is not expected he will be one of those to leave anytime soon, which raises hope he will push for a stronger platform for local talent in the region’s marine world. The fact he is not planning to retire is all the more encouraging.
“I think I won’t be able to retire. You have some people who work to live. And my wife says that I live to work, because trying to create something that has not been done before is very contagious. It’s very much a daily challenge for me. It’s very tempting,” he says.
With Gulf Craft setting sail to emerging markets such as Australia and South East Asia, it may not be long before prejudice converts to admiration for the once-modest shipyard that started out in a 218,000 square foot facility in the quiet emirate of Ajman.
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