The annual path of a super-yacht has been more or less predictable for decades. Summer in the Mediterranean, Winter in the Caribbean or South Pacific, with the other periods being used for transits and maintenance. Recently the trend towards more expedition-focused boats has seen far northern and southern latitudes become increasingly popular as yacht owners and charter parties seek new cruising grounds. Now a new destination, easily accessed from the Mediterranean and Asian maritime routes is being developed through a collaboration between the Saudi government, several mega-projects and one of the biggest names in the Yachting Industry.
Saudi's remote and pristine north-western coast ticks multiple boxes for those seeking new water-borne experiences. Turquoise and crystal-clear water, remote anchorages and beaches, incredible marine life and a year-round warm climate. Not far south of established destinations like Sharm El Sheikh but historically impossible to enter without Saudi government authorization, the area represents a truly new place to explore. NEOM, the futuristic city under development in that corner of the Kingdom, has teamed up with luxury publisher and events business The Robb Report to stage "Red Sea Week, a rendezvous of some the largest super-yachts in the world that takes in some of the key locations ear-marked for future activity. Organized around land-based entertainment on a desert island, the 2019 edition of Red Sea Week attracted 65 yachts and their guests for several days, with VIPS being ferried by helicopter and private jet to the discreet event. Ministry level support is being managed by the Ministry of Culture in Riyadh who are tasked with overseeing this element of the Vision2030 plan, whilst additional support is provided by Amaala, the ultra-luxury tourism development owned by the PIF.
Industry expertise is being delivered by Burgess, the leading Yacht broker and management company. Tapping into their global network of yacht owners and their deep understanding of yachting logistics, complexities and stakeholder management has enabled the Saudi government to rapidly build a narrative on the attractions of visiting the region and enjoying a unique experience. So far though all of this has had to be built around the cost and complication of temporary infrastructure and events which is likely to be unsustainable in the long run and risk a limited shelf-life for the area. So what plans are in place to create a long-term foundation for the industry and its customers, and where do the opportunities lie for the players in the ecosystem right now?
Currently the northern Saudi Red Sea Coast has almost zero yacht-friendly infrastructure, but plans are at an advanced stage to create a string of marinas from Neom in the north to Jeddah, a distance of over 1500km. When finished, the overall result will be to create a versatile itinerary for yachts to explore this extensive coastline whilst having easy access to shore facilities and land-based activities at regular intervals. One industry veteran involved in this planning has indicated that facilities will be constructed to accommodate yachts up to 100m + in length and are even being designed to include sea-plane landing areas.
All these facilities require the input of specialist Marina companies in the design, build and operating fields. Tenders are expected to be released over the next 6 months covering the initial phases of these areas and represent significant new business opportunities for companies ready to commit to Saudi and its long term plans.
Core marina construction, pontoons and moorings and shore service technology will all be required on aggressive timelines. Tenders and marina workboats, including heavy RIBS, will also be sought to provide the ancillary services for superyachts and their guests and crews.
Charter and Crew Management Companies
Jonathan Hind, Managing Director at Burgess in Dubai, says that Saudi represents an exciting new growth market for their business. "Burgess has a deep and long-standing relationship with the Kingdom. We have worked with many Saudi superyacht owners over several decades, providing yacht and crew management services as well as arranging charters all over the world for Saudi clients", he said. "The development of the Red Sea as a new cruising ground represents a unique opportunity for the industry, with pristine and private anchorages being well supported with state of the art facilities through the region" Burgess is actively building a charter offering for the Red Sea already, working with select yacht owners to create a charter portfolio that caters to the Saudi market and a range of budgets and group sizes.
Saudi coastal areas have long been viewed and managed through the lens of border-security. Consequently there is currently a mountain of red tape associated with leisure boating activities that can remove much of the pleasure. Any vessel taking passengers must submit to thorough searches by the coast guard and completing many forms which can be a lengthy process. One expat who dives regularly on the Red Sea says that they usually expect to go through 4 hours of processing before they can actually enter the water!
Clearly this type of bureaucracy and intrusion will be at odds with a desirable operating environment for the yachting industry and unless addressed will cause the vision to fail at the first hurdle. New maritime laws and regulations that align with the goals of the tourism sector whilst maintaining the integrity of the security services will be required with some urgency. Specialist law firms with specific experience of drafting national laws and frameworks that satisfy all stakeholders whilst facilitating the growth of a new industry will likely find significant fee-earning opportunities in KSA over the next few years.
Supply & Logistic Companies
As marinas come on-line and more yachts visit the area, opportunities for specialist supply companies will grow exponentially. Whether its fuel bunkering, chandlery, waste management, or gourmet food suppliers, these large vessels will require the full suite of support services to operate at required levels.
In summary, development of the Saudi Red Sea is a major new growth opportunity for the superyacht industry. As sales and charters are impacted by the Covid crisis and marine development plans in traditional cruising grounds like the Mediterranean and the Caribbean are put on hold, Saudi remains committed to its long-term goals and the investment required. More information can be obtained by contacting us at Gulf Prospects.