Yachting has long been regarded as a luxurious holiday activity worth trying at least once in a lifetime. Yachting in the UAE is an irreplaceable pastime for tourists and locals. On board, people can explore the waters of the UAE at their own pace, see the iconic landmarks from a different perspective, and make one-of-a-kind memories. Having said that, the luxury yacht industry is also a very promising area for investment. However, it is worth studying the main prospects and risks first. This will help you make an informed decision.
Overview of the luxury yacht rental investment market in the UAE
Tourists and locals can get a yacht charter for a trip or an event. This service is also actively used by businesspeople for meetings or teambuilding. As a result, investors in the UAE and other countries are actively putting funds into this area. Study the specifics of the market and the basic specifics of the region.
There are also two promising regions in the country: Dubai and Abu Dhabi.
These locations are known for their huge tourist flow. They also have a huge segment of elite clients. They prefer to charter superyachts that match their high status for a certain period of time.
Not only do local rental companies operate in the country. International companies also have a share of the market. They offer their clients various types of services:
- vessels with crew;
- yacht charter without crew;
- organisation of events with catering;
- VIP services for team building, business events and VIP receptions.
At the same time, vessels of various sizes are popular among tourists. However, it is desirable to have a wide range of options. This will help attract the widest possible target audience. When choosing a yacht, customers focus on:
- scale of the event.
- number of guests.
- time period.
- extra services.
New trends and innovations are constantly emerging in the luxury yacht charter industry. In particular, for a rental company to maintain high profitability, it is necessary to offer eco-friendly and big-capacity yachts for rent. These vessels are currently at the peak of popularity among the clients.
It is also worth considering digital platforms for remote booking. Most of the customers are tourists and businesspeople. They prefer to book online from another country before they arrive on holiday or on business.
Advantages of investing in luxury yacht charter in the UAE
Investing in a yacht charter service has a number of advantages. We have highlighted the main ones:
High popularity of luxury yacht rental
The Emirates have earned the title of an international tourist and business hub. The country attracts wealthy customers from different countries. The constant growth in the number of tourists and residents with high incomes determines the high popularity of luxury yacht rental. Therefore, it is necessary to expand the offer.
Favourable climate
The warm climate of the UAE makes it possible to travel on a rented yacht almost all year round. The peak tourist season is from October to April.
High level of infrastructure development
There are many ports in the country. This is especially true of Dubai and Abu Dhabi. Other emirates also have many places for mooring, servicing, and storing yachts.
Therefore, you can cover several regions at once. This increases the likelihood of getting a higher return on your investment.
High margins and minimal taxes
Luxury yacht charter can generate high returns on invested capital. This is due to the high cost of services. You can also organise VIP events on board, which can bring in additional revenue.
The UAE also has a relatively low level of taxation. This has a positive effect on business income.
Diversification of investments
A yacht charter company can offer different types of vessels and rental periods. Additional services can also be provided, such as catering, excursions, and entertainment programmes.
This ensures flexibility in terms of offers for customers. Therefore, you can get the maximum profit from your investment.
Risks of investing in luxury yacht rental in the UAE
This area of capital investment also has certain risks. It is worth familiarising yourself with them in detail:
High costs
Buying or leasing an expensive yacht requires a significant investment at the initial stage. Starting your own business also requires expenses for:
- vessel maintenance;
- insurance;
- repairs;
Therefore, many businesspeople decide to rent a yacht if they only need a vessel for a certain period.
It is a seasonal business
The most money can be made during the peak tourist season. It lasts for 6-7 months. This affects yacht occupancy and income levels during the ‘unpopular’ tourist season.
High level of competition
This market is highly competitive. You have to compete with a large number of companies and individual operators.
This can hold back price growth and margins. You need to constantly study the offers of your direct competitors and meet the established service standards. This is the only way to keep your business afloat.
Summing up
The luxury yacht charter industry in the UAE has excellent prospects. This is facilitated by the region's high popularity among wealthy tourists and business people. People come here simply to see the country, participate in business events and enjoy a luxurious holiday. Therefore, investing money will subsequently bring substantial dividends.
