Mike Simpson, founder of Simpson Marine, has high expectations of the new free trade zone plan for Hainan Island, announced on June 1. In an interview with Asia-Pacific Boating, Simpson says that the new plan, which reduces taxes on imported yachts to Hainan, is a “real game changer”.
“They are trying to make (Hainan) business friendly. The Central Business District of Sanya is transforming already, from a seasonal vacation place to a place of business,” Simpson says.
Mike Simpson, founder of Simpson Marine
The other big point about the new free trade plan for Hainan is the potential for linkages between Sanya and Hong Kong, letting yachts freely cruise back and forth. Simpson is hopeful that the new plan will result in a new push to help yacht owners in Hong Kong and Chinese owners to take advantage of the cruising areas around southern Hainan.
Various restrictions on yachting in Hainan include a curfew requiring yachts to be back in the marina by 6pm. “It’s crazy,” Simpson says.
Simpson Marine has maintained a large office at the Serenity Marina in Sanya, one of the biggest marinas in Hainan, despite the prolonged slowdown in Hainan.
“Like a lot of people, we’ve been sitting on the fence, waiting to see what’s going to happen,” says Simpson. “Since President Xi Jinping came to power, the market down there has been pretty much dead. I kept it (the office) in the hope that this free trade zone would finally happen. And we’re finally starting to see the market starting to pick up. But it has been a long wait. Now we have good expectations; this winter, we’ll be down there in force to see if we can get the market going again.”
Simpson also discussed his views on the rest of Asia.
Hong Kong has enjoyed a significant rebound from Covid-19 lockdowns, with dealers reported significant sales ahead of the summer cruising season. The main concern is how long the rebound will last. New marina berths are due to open this year at the Lantau Yacht Club, which is the redeveloped Discovery Bay Marina on Lantau Island.
In Vietnam, Simpson is hopeful that the new Ana Marina in Nha Trang will be successful, and hinted that he has looked at the marina as the potential site for a new office. Prior to the Covid-19 lockdowns, Vietnam’s economy was growing at record pace. The taxes on yachts in Vietnam are “realistic” at about 20%, he says.
“Without infrastructure, you can’t have a yacht industry. You will have the odd yacht sold, as happened in Vietnam, in Saigon. That was about it.”
Thailand, which is trying to restart its tourism industry with a stronger focus on the high end rather than mass market tourism, is still focused on expats rather than local Thais. “It’s a good market for charter, but for sales, it has a lot of room to grow,” says Simpson.
In China, buyers are becoming more attuned to water sports and having fun with their yachts, rather than using them as floating apartments, Simpson says. “The stereotype of the Chinese buyer only being interested in mahjong or karaoke rooms is no longer valid.”
He reports that Asian clients are increasingly asking about expedition superyachts, with one mainland Chinese client buying a Sanlorenzo 500XP, while a Hong Kong client purchased a Damen Sea Axe support vessel.
“What we’re seeing is that Asian buyers are more sophisticated and more knowledgeable, and they have the experience now. Moving up the ranks of size.” If the Hainan Free Trade Zone plan works, then China could soon find itself in the yachting spotlight once more.