Asia Marine’s Fractional Yacht Ownership - how it works (it works!)

by Guy Nowell, Asia Yacht Press on 12 Aug 2017 There have been a number of attempts to fire up fractional yacht ownership in Asia, but the only one that has really worked is the brainchild of Eric Noyel the CEO and Founder of Asia Marine. 'We now have 30 participating owners and six yachts in the programme, and most yachts are making money for their owners!'

'Our Fractional Ownership is a concept very much in tune with the times – the ‘uber-isation’ of society, the sharing economy. This is the future,' says Noyel. 'So many yachts are substantially underutilised and – therefore – terribly expensive to buy and run. Yacht ownership is complicated and time-consuming, especially if the boat is only used on an occasional basis.' The company cuts the initial cost of purchase by selling shares in a yacht, slashes the running costs by sharing them among multiple owners, and charters out the boats to generate income when the yachts are not otherwise being used.

Over the last four years Noyel has been shaking up the Hong Kong, Thailand and South-East Asian boating scene with a whole new entrepreneurial approach to boating. “Four years ago a luxury yacht charter market did not exist in Hong Kong. There was demand, but no supply. Luxury yacht owners did not want to charter because they did not know they could, or did not know it would work. It works! But how much – exactly?”

Fact #1: Luxury motor yachts. The business model works because the demand exists.

Charter income from Asia Marine's Numarine 78 in Hong Kong means that the boat’s three owners are booking a 90% discount on monthly running costs, having paid only 33% of the original purchase price of the boat in the first place. “If that sounds too good to be true, we have the figures.”

The new Galeon 460 in Phuket is off the chart with its popularity. It is a boat that works due to its innovative layout and inherent affordability. Thanks to effective marketing and management by Asia Marine in Thailand, the charter market has totally embraced this yacht; in the first six months of operation the boat showed a return of 13% of purchase price after operating costs - and what is more, the three owners used the boat 20 times without ever paying for fuel! Back in Hong Kong, the Numarine 62 Fly that arrived in May 2016 generates an actual monthly profit over operating cost for each of its three owners.

Fact #2: Many Happy Returns. If you really want to make a business return on a boat, then buy into a small bareboat sailing catamaran in Thailand.

The initial cost is immediately affordable, and the demand for charter is high. Asia Marine Thailand has the network and expertise to book charters in excess of 150 days per year, thereby making in the region of 18-20% cash return per annum. Allowing for depreciation, reselling the boat after five years gives a net return of 8% per annum. “Our Thailand operation under Vincent Tabuteau brings 25 years of experience to the business, and this is absolutely key to its success. We have a Fountaine Pajot Lucia 40 arriving in Phuket shortly, and there is one share still available. We include all the costs, including the 7% import duty, so that the boat is properly flagged in Thailand and can be chartered legally.”

Fact # 3: Good people. “Our business model works because we have a properly-functioning charter agency and that is what makes the difference.'

Asia Marine has developed a turn-key operation that takes care of absolutely everything - purchase, insurance, professional crew, technical services and maintenance, fueling, and of course chartering. Noyel is a part owner of one of his own boats, the Numarine 78, and fully appreciates the complications and pitfalls of boat ownership. “I love being able to hop on my boat and enjoy the fantastic cruising waters of this region, but it takes a great deal of hard work behind the scenes to maintain and service the yacht. Pairing up with Vincent Tabuteau in Thailand, Wellington Soong in the Philippines or the Nittiyudo family in Indonesia means that we have an excellent regional network; if you want to use boats in Hong Kong, Thailand, Indonesia or the Philippines, then we can look after you in all of those places.”

Perhaps most remarkably of all, Noyel reports that “We have never had a conflict of dates among our owners. In part that is because we are dealing with gentlemen, but it is also attributable to a highly effective real-time online booking system.' Once again it is all down to the sheer quality of Asia Marine's charter agency management. “In the end, the idea is simply to make boating easier and more affordable. These numbers are the result of the work of many people over three years, and millions of dollars of investment in boats. We have the very best charter agency in both Hong Kong and Phuket. After four years of operations we have emphatically proved that fractional ownership is a model that works, and the momentum is gathering pace.”

www.asiamarine.com