THE RAFFLES STORY EXPERIENCES IN AN EMERGING MARKET. By YP LOKE

Transcription

1 THE RAFFLES STORY EXPERIENCES IN AN EMERGING MARKET By YP LOKE YP Loke was the General Manager of Raffles Marina for the last seven years, until June 1998, when he decided to set up his own management company. He continues to be involved with Raffles Marina as a Consultant, but also takes up additional assignments for other clients in the marine and hospitality industries. YP trained as a naval architect, and later went on to pursue a MBA at Cranfield University in England. He decided to go by his initials when he found that few westerners could pronounce his name correctly. You know he is on the water when you hear a call for Yankee Papa on the VHF. YP Loke Raffles Marina 10 Tuas West Drive SINGAPORE Phone: Fax: ypl@rafflesmarina.com.sg Website:

2 The Raffles Marina Story Experiences in an Emerging Market Marinas 5 Conference, Singapore Y P Loke Consultant Contents Market Characteristics Customer Profile Business Plan Boating Preferences Club & Marina Developments Current Issues & Opportunities Regional Marketing Efforts Q&A I Market Characteristics Developmental Stage

3 Few Developed Destinations Facility Driven Minimal Govt. Support or Public Facilities Year Round Boating Unique Cruising Grounds High Bio-Diversity 3 Market Characteristics Market in developmental stage, different from mature markets in Australia & the west. Characterised by few developed destinations and limited infrastructure. Although more developments expected to come on-stream, some may be shelved due to economic downturn. Growth is `supply side' driven. Marinas & yacht clubs actively market & promote boating. This is risky for developers because they have to build the business in anticipation of a market. Unlike Australia or the west, there are practically no subsidies (i.e. no municipal marinas or public ramps. The Aseanarean Region consists primarily of Indonesia, Singapore, Malaysia, Thailand and Philippines. Brunei also included but market size insignificant. Cruising grounds not in Singapore but in surrounding hinterland, viz Indonesia (13,000+ cruiseable islands, and increasing as larger areas made accessible by government), Malaysia, Thailand and Philippines. However, Singapore is important hub as a major port and trade area, with easier excess to telecommunications, spare parts, services, chandlery & boatyards. Growing awareness of region among international cruising fraternity, with more foreign boat arrivals every European winter. Potential to complement the Mediterranean and Caribbean with distinct charm and mystic of its own. Being tropical, has largest marine bio-diversity in the world (not to mention land based bio-diversity in rain forests). More so than Mediterranean (temperate) and Caribbean (sub-tropical). Boating year-round. Raffles Marina Story - Marinas 5 2 The Customer Lifestyle Driven

4 Prestige element Entry-Level Fast Learning Curve Mainly Power (vs Sail) Little Owner DIY Paid Help Group/Club Activity 4 Customer Profile Market mainly lifestyle driven. Prospective customer has to be shown what boating is about. Still a niche leisure activity. Not yet reaching middle market. Boating still regarded as prestige past time, attracting higher income group. Result is that product identity and brand recognition important part of marketing in the region. Most boaters at entry-level, as this is developing market. But willing to spend more on boat because of higher income. Predominance of power over sail, due to speed and faster learning curve. In future, may change in Singapore, due to sailing push in schools. 'Boatowner' not necessarily a `boater'. Most have no technical inclination and `Do- It-Yourself' mentality not a part of local culture. Life-style approach to selling fuels growth and reinforces this boating norm. Many have paid help, ranging from competent skipper to part-time help in boat cleaning. Adds to cost of ownership. Organised on-water activity and group outings popular in most countries. Raffles Marina Story -Marinas 5 3

5 Business Strategy First in Region Value-added solution Pent-up Demand Leadership Role Model for other Developers Megayachts - new market segment 5 Business Strategy Being first marina in the region, business decision was to aim for top end of market, which commands the highest premium in terms of value-added. The resulted in a full service marina and clubhouse built to a high standard. This decision is also in keeping with market that is lifestyle driven. Unique product by western standards - not a yacht club by their definition - more a marina with country club facilities. Financed by sale of transferable memberships - a scheme pioneered by golf clubs in Japan. Initial launch at S$35,000, now with 2,300 members. With present soft market, memberships trading at S$17,000. Being first in Singapore also enabled Raffles Marina to capture pent-up demand from existing boat population. These are the hard-core enthusiasts who owned boats despite minimal facilities. Being first in region allowed Marina to assume leadership role with boating community and tackle boating issues. Benchmark against which other marinas are measured. Raffles Marina Story -Marinas 5 4

6 Boating Preferences Longer Range Faster Speed Higher capacity generator (220v/50hz/l ph) Larger cockpits increased water supply Sun protection Breathable upholstery 6 Boating Preferences Range is important as in developing market, supporting services, fuel, and marinas are far & few in between. This implies larger tanks and/or increased length to beam ratio. Fast cruising speed required, as most locals have short weekend, with long distance to cruise between destinations. Higher temperature of tropical water & humidity level lowers engine efficiency and may require re-pitching of propeller/s. Higher capacity generator needed for air-conditioning to tropical specifications. Most countries in region have domestic power supply of 230v/50hz/lph.

7 Larger cockpits with good drainage required for those interested in sports fishing. Drainage to cater for tropical monsoons and thunderstorms. Larger water tanks or water-maker required as fresh water hard to come by in outlying islands. Also higher water consumption as people shower more frequently in tropical conditions, to cool off. Sun protection required. Large sunbathing decks not needed. Breathable upholstery and lighter interiors make a boat feel less hot and clammy. Raffles Marina Story - Marinas 5 5 Boating Preferences (coat...) Oversized fuel filters Manuals (in English) Parts Listing Ventilation 7 Boating Preferences /cont. Many parts of region have poor fuel quality, therefore oversized fuel filters recommended. Ability to visually inspect & clean fuel tanks an added advantage. Manuals in English required. Good spare parts listing to enable customer to re-order from factory direct in cases where no local distributor available. Reliability important as many boaters do not have technical inclination or 'Do-It Yourself' mentality. Boat breakdown in poorer remote areas with unfamiliar culture & language is a

8 harrowing and frightening experience. Good ventilation needed to prevent build-up of mildew in tropical conditions. Raffles Marina Story - Marinas 5 6 Operating Yacht Clubs & Marinas Changi Sailing Club Europa Sailing Club (dinghies & sailboards) Keppel Marina (redeveloping) Natsteel Marine Ponggol Marina Raffles Marina Republic of Singapore Yacht Club (redeveloping) SAF Yacht Club (redeveloping) Other dinghy/canoe/beach clubs 8 Operating Yacht Clubs & Marinas in Singapore The following is a list of operating marinas & yacht clubs in Singapore: Changi Sailing Club caters only to sailing yachts and dinghies. Dinghies on hardstand, and on water, fore & aft moorings only - no walk-on berthing. Europa Sailing Club (previously the East Coast Sailing Club) has relaxed beach club atmosphere catering to dinghy sailors and windsurfers. Keppel Marina is mainly a dry-stack operation with a few sailing yachts on water for charter (Keppel Group owns Pacific Seacraft in USA). Adjoining site (also Keppel-owned) which is now shipyard slated for large integrated marina cum housing development. Natsteel Marine is sister company to Raffles Marina. Distributors for SeaRay and Mercruiser in Singapore. Site has dry stack and repair yard. A small number of berths and swing moorings available on water. Ponggol Marina recently soft-opened in August `97. Has (world largest?) dry stack for 720 boats and pontoon system for 65 boats. Raffles Marina catering to upper end of market with 300 dry stack, 170 wet berths, and 8 megayacht berths. Country-club style clubhouse with full service repair facility and chandlery. Republic of Singapore Yacht Club (RSYC) and Singapore Armed Forces Yacht Club (SAFYC) both have existing small operations but slated to grow in size with infrastructure

9 developments under way (see next slide). Raffles Marina Story - Marinas 5 7 New Developments Keppel Marina (redevelopment) National Sailing Centre (SYA) RSYC (redevelopment) Sentosa SAF YC (redevelopment) Others Tanjung Rhu / Pulau Ubin beach clubs 9 New Developments in Singapore: The following are new developments in Singapore: Keppel Marina's site slated to expand with relocation of shipyard and revitalisation of site. New development calls for housing integrated with marina and waterfront village. National Sailing Centre developed by the Singapore Yachting Association for the promotion of sailing mainly to Singapore youths and coaching centre for the national sailors. The Republic of Singapore Yacht Club (RSYC) has acquired new site and developing 160- berth marina and dry stack. Sentosa Island at southern end of Singapore due to tender a site for marina and waterfront development in near future. Waterfront housing integrated into master plan. The Singapore Armed Forces Yacht Club (SAFYC) is an affordable yacht club for reservists and personnel of the Singapore Armed Forces. Existing site is to be expanded and additional site on newly reclaimed land near Changi Airport acquired for further expansion with marina and dry stack planned. Other know sites such as Tanjung Rhu (near downtown) and beach club type locations are in government's longer term blue-print, but timeframe for release unknown. Raffles Marina Story - Marinas 5 8

10 Other Regional Marinas Peninsula Malaysia Sebana Cove, Johor Admiral Marina, Port Dickson PD Marina Port Dickson Royal Selangor YC Lumut Int'l YC Bayan Bay, Penang Rebak Marina, Langkawi YC 10 Other Regional Marinas A flavour of what else is in the region, and the state of play: Sebana Cove in Johor caters to Singaporean market Integrated development with golf & housing. Admiral Marina in Port Dickson - expected completion late `98. PD Marina adjoins Admiral Marina. Will open after Admiral Marina. Royal Selangor YC is oldest of the Malaysian clubs, more in the style of western yacht clubs with a sail tradition. Organising club for the Raja Muda Int'l Regatta. Boats mainly on swing moorings. Lumut Int'l YC a smaller marina near Pangkor Island, on the site of the former Perak Yacht Club. Conveniently located for yachts transiting the straits of Malacca. Bayan Bay on Penang under construction. Large land inventory on which housing, hotel and commercial properties will be built. Langkawi has resort ambience and is a tax free port. The place to provision up (beer & fuel) before Phuket. Has two marinas, Langkawi YC on the island itself, and Rebak Marina on adjoining island. Raffles Marina Story - Marinas 5 9

11 Other Regional Marinas (cont.) East Malaysia Kota Kinabalu YC Sutera Harbour Golf & CC, Kota Kinabalu Waterfront City, Labuan Thailand Ocean Marina YC, near Pattaya Phatra Marina & YC (near Hua Hin) Phuket Boat Lagoon Phuket Yacht Haven 11 their Regional Marinas (cont.) Kota Kinabalu YC is small-established yacht club, with basic amenities. Boats kept on trailers on beach clearing, and launched using tractor in traditional manner. Sutera Harbour is a new development with clubhouse completed and operating. Pontoons going in. Two adjoining hotels in same development. Waterfront City is one of few non-membership marinas. It is located at the Waterfront Hotel, a development in the new financial district. About 40 berths, mainly transient. Heavy Brunei traffic on weekends. Ocean Marina is largest marina in Gulf of Thailand. Located about 3 hours from Bangkok, in Sattahip, near Pattaya. Phatra Marina & YC more of a beach club. Base for Platu fleet of sailboats. Located in Panburi, on the Gulf, near Hua Hin. Two marinas in Phuket. Phuket Boat Lagoon and Phuket Yacht Haven. Both operated commercially. Boat Lagoon also base for Sunsail Charter. Thailand's development being hurt by highly tax on boats, coupled with economic downturn.

12 Raffles Marina Story - Marinas 5 10 Other Regional Marinas (cont.) Philippines Manila YC Subic Bay YC Cebu YC HongKong SAR Royal HongKong YC Aberdeen Marina Clearwater Bay Gold Coast Y & CC Many Others Indonesia Nongsa Point Marina 12 Other Regional Marinas (cont) Manila YC the oldest and most established of the Philippine clubs, in a prime location. Secured new lease on land and being re-developed with hurricane shelter. Subic Bay YC is 3 hours drive from Manila, in ex-us naval base, now turned into a desirable township. Good cruising grounds. Tax free status. Cebu YC is a smaller facility. Good local cruising. Cruising potential in Philippines largely untapped. Many HongKong clubs. The most established being Royal HongKong YC. Indonesian developments being stifled by economic situation. Two operating marinas in Batam presently catering to Singaporeans, the main one being Nongsa Point Marina. A smaller marina, Marina Cove, is located on the western coast. Other Indonesian marinas include Bali International Marina and Ancol Marina in Jakarta. Raffles Marina Story - Marinas 5 11

13 Growing Regatta Circuit Indonesia - Darwin/Ambon/Bali/Jakarta/Nongsa Rally Phuket King's Cup Raja Muda Int'l Regatta (Malaysia) Singapore Straits Regatta China Sea Race (Hong Kong) President's cup (Philippines) 13 Growing Regatta Circuit Many Australian & New Zealand yachts enter the region through participation in the Darwin-Ambon Race, with legs continuing on to Bali, Jakarta & Batam. Subsequent rallies funnel yachts up to Singapore, Malaysia and Phuket. The established `troika' consists of three regattas, Raja Muda International Regatta (Malaysia's west coast in November), the Phuket King's Cup (Thailand's west coast in December), and the Singapore Straits Regatta. The latter to be shifted from

14 January to November, to catch yachts coming up to Phuket. The overall champion of series is winner of the historic Sir Thomas Lipton Trophy, donated by RSYC. Hong Kong's China Sea Race, and Philippines President's Cup has strong following - boosted by completion of new prestige location, Subic Bay Yacht Club. Raffles Marina Story -Marinas 5 12 Current Issues & Opportunities Economic Downturn Fear of Water&Sun CIQP Harmonisation Tax on Boats Boater Education Perceived Fear of Piracy Marine Conservation & Eco-Tourism Other Leisure Pursuits 14 Current Issues & Opportunities Economic downturn hurting growth. A boat is clearly a luxury that one can do without in difficult times. Boating not a traditional form of recreation. Locals took to water mainly due to necessity, as form of economic subsistence (e.g. as fishermen) or, in later times, because of political instability (e.g. as refugees). Change in mindset needed to convert mid-income to recreational boating. Locals do not like the sun. Sunbathing mainly a western concept. CIQP (Customs, Immigration, Quarantine & Port) Procedures still cumbersome and different in all countries. Steps being taken to harmonise procedures, but is uphill task. Authorities need to be convinced of economic benefits to be derived from growing boating market and potential of marine tourism. Need for better availability of boater education & training. Singapore leading in this area with compulsory licensing of boat driver and craft. Lack of industry self regulation result in other national agencies planning to follow suit. Fear of piracy an on-going issue, but is more perceived than real. Targets, if any, are commercial vessels rather than pleasure craft. Pollution of sea & rivers by villages built over the sea on stilts with minimal sanitation in remote areas. Education needed to prevent over-fishing, and reduce damage to reefs by dynamite or cynide fishing. Danger of semi-submerged logs in logging areas. Sustainable, balanced and ecologically sensitive development needed in order not to

15 overwhelm local culture. Boating only one of many other more established leisure pursuits fighting for a share of the same leisure dollar. More awareness (boating at sea less visible than golf) & critical mass needed. Raffles Marina Story - Marinas 5 13 Marine Tourism Mediterranean Caribbean Aseanarean 15 Marine Tourism Not previously regarded as significant, but now with economic downturn is getting renewed focus as tourism authorities strive to find new niches and defend tourism revenue. Strong marine bio-diversity. Growing dive business. Growing megayacht visitation. Surge in foreign yacht arrivals with corresponding increase in awareness for the region as a cruising destination expected in year 2000 due to America Cup and

16 Olympics in Auckland and Sydney respectively. Aseanarean - a name that rhymes with, and complements - the Mediterranean and the Caribbean - with the potential to become another world renown cruising destination. Raffles Marina Story - Marinas 5 14 Raffles Marina on Internet ahoy@rafflesmarina. com.sg ypl@rafflesmarina. com. sg (Y P Loke) 16 Raffles Marina on the Internet Raffles Marina's web site is at General enquiries can be channel through ahoy@rafflesmarina.com.sg The speaker, Y P Loke can be contacted at: Raffles Marina 10 Tuas West Drive Singapore Telephone: Direct: Fax: ypl@rafflesmarina.com.sg New General Manager is Richard Yeo. Raffles Marina Story - Marinas 5 15