Over the last 50 years, the boat industry in India has tapped into numerous different applications, ranging from defense, commerce, surveillance, and entertainment. However, if there is one area that has seen a sudden, exponential growth, it is the luxury boat sector.
Consider the scenario of Mumbai about a decade ago – there used to be hardly 10 odd pleasure yachts lined up at the coastline, all owned by industry moguls of the country. Today, there are over 100 jostling for space there, as the entrance barrier has declined.
How is it that the luxury boat industry has grown so rapidly? What are the factors influencing this rise? And most importantly, what is the future of the luxury boat industry in India? These are some of the questions we shall explore in detail today, as we sail through the past, present, and future of the luxury boat industry in India.
The Growth of Luxury Boats in India
The growth of the yacht culture in India has not been an overnight phenomenon. However, India has always had an affinity for luxury boats. Be it the Shikaras on Dal Lake in Kashmir, or the houseboats on the Alleppey backwaters, we have been fascinated with pleasure yachts for a long time.
With the introduction of modern boat design, the elite of the country began to invest in luxury yachts. Given the high entry costs, luxury boats became a status symbol for the biggies of the industry and built an aura of exclusivity around luxury boats.
However, over the past decade or so, advanced technology, the introduction of newer, more economical materials, and an increase in the number of luxury boat manufacturers have significantly chipped away at the perceived barriers into the yacht industry.
Buying a yacht is now the new alternative to buying a second luxury vehicle. While the cheapest leisure boats start at 2 lakhs, the market is dominated by the 33ft-50ft boat segment, which starts at 15-16 lakhs per vessel. Of course, at the higher end of the spectrum, where these luxury boats resemble floating palaces, the cost can go well into crores.
The growth of the luxury boat industry is augmented by the fact that people are now chartering boats for private and corporate events more than ever. Since everybody is not able to afford to buy a boat, chartering one can be a viable option. This has significantly boosted the investment of individual buyers and tourism companies, who recoup their capital by renting out the yachts on short leases.
Although the overall growth trend has been positive, that’s not to say that the journey has always been smooth sailing. The luxury boat industry has witnessed several ups and downs in the past decade, the latest being a two-year slump in the market due to recession. Let’s now see what are the different factors that have influenced the luxury boat market over the past 10 years.
Factors Influencing the Luxury Boat Industry
There are a number of factors that have positively and negatively influenced the growth of the luxury boat industry in India. Here we briefly see a few of the major factors at play.
Increase in Disposable Income
There has been a year-on-year rise in the disposable income of families in India, prompting a trend of luxury lifestyles. Consequently, people are looking for new and different ways to invest money and luxury boats have become a feasible option. With the right balance of luxurious and exotic, the new generation is looking at boats as a means of a entertainment from a fresh perspective.
Growing Love for Adventure
In addition to the rising income, the new generation is also fitness-conscious and adventurous. The thought of a personal yacht for a weekend getaway is very enticing, especially when there are plenty of waterways close at hand. Be it fishing, sailing, or entertaining friends and family, yachts are fast-becoming a popular option for the fun generation.
Tons of Options Available
An increase in the relative number of boat manufacturers in India has opened up the luxury boat market to a large extent. Innovative boat design, use of modern technology, and sustainability concerns have led to the creation and manufacture of a slew of boats, of varied shapes, sizes, and applications. The availability of such options enables buyers to shortlist manufacturers and boats that fit both, their budget and their requirements. Consequently, there is an increase in the luxury boat industry.
Organization of Lucrative Competitions
In a welcome development for the casual thrill-seeker, there are a number of boating competitions being organized in India, and having a huge fan following. Professional annual boat races and galas are now an established event and draw huge crowds during the season. This encourages enthusiasts to buy boats of their own, for practice and pleasure.
Although the growth of the luxury boat industry has been exponential, there are some factors that have limited the expansion of the sector. These are listed below, in no particular order.
Lack of Marine Infrastructure
Despite the increase in the number of luxury boats being manufactured, marine infrastructure has not grown at the same pace. The severe lack of marinas and docks to anchor the boats at popular coastlines like Mumbai, Goa, or Chennai necessitates boat owners to dock their boats internationally. This hampers the purchase and use of luxury boats to a great extent.
Global Economic Slowdown
The global economic recession had a major impact on the luxury boat industry, causing a two-year slump in 2008-09. Although it has recovered from this setback, the sector is still subject to the repercussions of global economic crises as they directly impact the spending capacity of the public.
Post the Mumbai terror attacks, security has been beefed up along the coastline, naturally. However, though this is a necessary measure, it does expose luxury boat owners to frequent inquiries from the coastguard, which can become tedious.
On the whole, the positive factors far outweigh the negative trends affecting the growth of the luxury boat industry and consequently, there has been a continuous upward rise in the yachting sector.
So far, so good. Let us now see what the future holds for the luxury boat industry.
The Future of Luxury Boats
According to a report by Research and Markets, the global luxury yacht market is expected to grow at a CAGR of 7.01% in 2016-2020. This portends a bright future for luxury boat manufacturers and designers.
It is worth noting that buyers these days are becoming more conscious about the exact boat they need, based on their specific application. There is greater awareness about the make and model of boats and the buyers consider all the fixed and recurring costs into account while purchasing the vessel.
It can be concluded that luxury boats are fast-replacing conventional modes of weekend getaways and are poised to make their presence felt in the tourism and entertainment industry in India.
What are your thoughts on the growth of the luxury boat industry? Drop a comment to start the discussion!