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The yacht business is an ever-increasing domain of the rich. An enclave so coveted that demand for ultra luxury comfort is fuelling the demand for more yacht deliveries- mostly custom built. In this interview with Michael Payne, CEO of Camper & Nicholsons International, I put some straight questions to him about the business of yachting.

Here are the excerpts AWR

Could you give brief status information on Camper & Nicholsons global view of the yacht industry and its strategic position in this enviable ultra luxury venture?

MP

The global yacht industry expanded enormously between 2004 and 2009. Obviously the on set of the worldwide global crisis caused a major set back in this expansion, however, the last year or two has seen a gradual improvement and we believe that going forward the future is bright.

AWR

With global economic slowdown, how does it affect the yacht industry?

MP
Prior to the on set of the global economic crisis finance to purchase a yacht was readily available from a wide number of providers at low rates. The tightening of loan criteria has now meant that there are very few players in the finance market and those that there are have very strict criteria and high rates relative to those previously available. This has meant that to a large extent only cash buyers have been able to purchase yachts. Clearly this has had a significant effect on demand.

AWR

And regarding the oil and gas sector in Africa, how would that impact in the luxe market particularly with new money coming in from oil?

MP

The large amounts of money been made in the oil and gas sector has certainly led to a number of buyers coming in from that area. However, the recent fall in the oil price will no doubt have a negative effect on this.

AWR

And what about the fun business of yachting in the global luxury space? Are you keen to develop this in Africa anytime soon?

MP

Unfortunately the infrastructure and cruising grounds available to yachts in East and West Africa are virtually non existent. Yachts require marinas, shipyards, suppliers etc and without these it is very difficult to see yachts operating in this part of the world in any significant number.

AWR

As the CEO of this global yacht company, what are the upsides and downsides of the business?

MP

Obviously given the large amounts of money involved when yachts do sell there are relatively decent commissions to be made. However, the flip side of this is that globally the number of transactions per year is only in the hundreds with a great number of brokers chasing what is a relatively finite amount of business. The line between doing very well and very badly can be a matter of one or two sales. Feast or famine is a common problem in yacht brokerage.

AWR

Does the economy of the world and particularly Africa support some of these mega yacht businesses? If yes, what economic sectors would support this?

MP

Until very recently the only yacht buyers coming out of Africa tended to be South and East African clients with interests in the mining and natural resources sectors. Recently we have seen some buyers coming from West Africa because of the recent oil and gas discoveries there but Africa in general is still very much a nascent area of our business.