Haizhilan talks with Honghui Liu, chairman of Deli Group, to analyze China’s yacht terminal industry

In recent years, influenced by changes in the industry environment and policies, the investment, construction and operation of the yacht port show different trends. Some of them enjoy the favorable conditions and favorable conditions, but most of them are unable to make ends meet due to planning, hardware and software conditions, operation and other congenital or acquired factors. What is the reason? Today, Haizhilan has a special conversation with Mr. Honghui Liu, chairman of GUANGZHOU DELI DOCKS ENGINEERING CO., LTD., a famous comprehensive operator of domestic yacht terminals, to share with you the development and current situation of domestic yacht ports, as well as the secrets of yacht port planning, design, construction, operation and investment.

GUANGZHOU DELI DOCKS ENGINEERING CO., LTD., founded in May 2005, is a comprehensive service provider providing consulting, planning, design, construction, investment and operation. Up to now, it has completed more than 1000 marina engineering projects at home and abroad. The exclusive compilation of inspection standards of Guangdong marina and pontoon has been well received by many government leaders, development owners and cooperative units. Mr. Honghui Liu, the chairman of the board of directors, has gained the essence of the construction of the wharf project. What unique insights will he bring?

1. Haizhilan: What is your opinion on the development and current situation of the domestic yacht industry, especially the yacht port?

Honghui Liu: First of all, I think there should be a big deviation in the positioning of Chinese yachts. It turns out that those lofty views requiring large investment and high enjoyment at every turn mislead the understanding of yachts. In Hong Kong or abroad you will find that a yacht is not a luxury, but a good way of leisure life on the water. I have met many players in Hong Kong who are new to yachting. They all think it is a good leisure sport. The threshold for buying a boat or selling a boat together is very low, and it doesn’t cost much money to play once.

Second, from the perspective of investment, the investment in the yacht marina is too large. The basic functions (100 berths) can be satisfied with tens of millions of yuan, but the current revenue volume cannot support such a huge investment.

Third, the operator’s positioning of the market is also out of deviation. Many people regard yacht as a kind of life for rich people to enjoy freely. On the one hand, many people are afraid to participate in it; on the other hand, too much publicity brings a lot of negative effects. On the contrary, sports boats or small yachts have taken root everywhere in recent years, with low threshold and good experience.

Fourth, there is actually no real public pier to date. Public marinas, like parking lots, will boost the entire yacht industry. If you want to buy a yacht, you have to buy an expensive membership first. The atmosphere of the yacht is not good, the cost of parking is high, the value is not reflected, and the buyer is also depressed. In fact, our Chinese boats are no worse than those in foreign countries. In foreign countries, you will find that most boats are old boats, especially small boats (speedboats, fishing boats). However, there are some deviations in our understanding of yachts, and Chinese people don’t like to play in the water, which is quite bad. After communicating with foreign counterparts, we found that 80% of foreign yachts/yachts are below 40 feet, but they are rich in atmosphere, culture and content, especially in various competitions and activities.

2. Haizhilan: What are the differences between domestic and foreign countries in terms of safety standards and environmental protection in port construction? This problem also seems to reflect some situation in our industry. What do you think?

Honghui Liu: First, we have participated in the construction of many marina projects abroad. Foreign countries attach importance to the rationality and scientificity of the preliminary planning. When the government plans the development of a marina in a certain place, there are corresponding standards for the construction of the marina. In China, it was complicated from the start, with too many restrictions. In addition, the current procedures and methods of port declaration in China are based on the standard of the Port Law. The Port Law was established in the 1960s and has been revised once or twice since then, but the main contents have not changed. Most of them are for commercial purposes, and the threshold for port, coastline, water area and environmental protection declaration is very high.

Second, the division of safety and regulatory responsibilities is unclear. Foreign is no safety risks on the line (the premise is the nationality certificate, ship certificate, driving license three legal), operation record can, if there is a problem is your responsibility you pay. But in China, where yachting is a niche industry and still in its infancy, such high standards are needed to limit it. At present, yachts are managed by means of ship management, which has led to regulations such as limiting the number of members to less than 12, not being able to operate boats, and restrictions on the waters.

Thirdly, foreign countries are more concerned about the engineering quality of the wharf and the rationality of the overall planning. In China, all things are managed, but now all people do not care, which is very bad. The guidance of these two ways is different, and the results are naturally different. For example, there are problems in the planning and location of many yacht terminals, which leads to frequent problems in Taiwan and flood prevention.

3. Haizhilan: What problems should we pay attention to when investing in marina?

Honghui Liu: Two things are very important to invest in marina construction. The first is the risk, including the legality, science and engineering reliability of the project, which is the first consideration. The second is the business model, and the business model should be the guarantee of profit, but so far, this industry has not really emerged relatively good, mature business model.

When it comes to the profit model, first of all we should position the yacht as a leisure lifestyle. Once clearly positioned, it will be separated from that kind of ostentatious way. The income and consumption structure of our country is olive-shaped. The middle class consumer base is very large, and yachts also have rich contents to support their consumption. Secondly, in terms of revenue, by far, commercial leasing of yachts should be in the first place. If the general mass market consumption is in the first place, this industry will really flourish, followed by business or business activities with a certain purpose. Third, there should be a variety of fun content to support the consumption of yachts or sailboats, such as yacht tourism, diving, sea fishing, etc. Among them, sailboats are the best way, because the use cost is relatively low. Fourth, the yacht club or sailing port platform, more business forms still need to do some extension on this platform, such as wine party, banquet, catering, business activities, hotels, and so on, and then extension is such as the exhibition, forum or activity such as sea Day banquet.

If you invest in a yacht port, you will definitely face the problem of what to make money by, that is, profit model. Therefore, you must make a variety of operation schemes, including the industrial chain extended by training, water sports, common accessories mall, etc., form a circle around the consumption of boats, and support long-term development by refining or enriching the operation and profit model. In foreign countries, it is usually combined with tourism and sports. These two plates are closely combined to form a leisure life style and realize normalization. At present, most of the domestic yachts are idle, so how to reflect the value of the yacht is the key to revitalize the whole yacht industry.

In addition, at least half of China’s marinas are property-related, which poses the most immediate and fatal problem: there is little management and the accompanying marinas are rarely of real use. From the perspective of operation, the business model of Dameisha, Langqi or Hongzhou Yacht Club should be replicable or imitated. However, the success of such cases has a certain relationship with the right time, geographical location and people, especially the time period. A single membership used to sell for more than a million; now few people buy. When something does not produce value, in fact, it is a very bad phenomenon, so I think the investment yacht port should pay special attention to the business model and management risk control.

4. Haizhilan: When the project was first approved, would the positioning of the yacht port be related to the future development? Many of the newly built yacht ports are in better condition than the previous ones, but they are still not developed. What is the reason?

Honghui Liu: Yes, now many yacht ports have been built but there are no people, which is very scary. The problem is that when the project was initiated, the original intention was not pure. Maybe it was built by a few people with a hot head and no in-depth consideration of the subsequent development? As for why the newly built yacht port with better conditions has not been put into operation, I think there are two main reasons. First, the acceptance of the market, that is, the base of these boat users is not big enough. The second is the purpose and value of boating. For example, the Singapore Yacht Club not only allows members to live in the club all year round, but also has a low cost and a good atmosphere. Therefore, people are very fond of going to the yacht club to spend money and truly enjoy the pleasure brought by yacht life. In terms of the atmosphere of playing boats, Hong Kong is more obvious. There is too much pressure in Hong Kong, so many people play boats to release the pressure. Even if they play once a week, the base of this group will be very large. In addition, the services provided by the yacht club can not only meet the needs of the group with the boat, but also meet some functional needs of the society, such as socializing, which makes people feel that going to the yacht club is not a luxury enjoyment, but a real life style that everyone can enjoy.

On the contrary, China is too simple, and once entering the club, people will put on a luxurious hat, which makes people feel estranged. Moreover, the membership is often hundreds of thousands of people, some of which cannot be sold at all. We can set up some cheap consumer membership, forming differentiation, attracting more people to spend money in the yacht club, guiding them to contact and participate in the yacht life.

5. Haizhilan: At present, many yacht clubs in operation are not profitable, is it because the investment amount is too large, the cycle is too long, and it is easy to generate cumulative costs?

Honghui Liu: Yes, investment in a yacht port, especially a coastal one, should cost at least 50 million yuan. It is difficult to make a profit with conventional operation mode and project income. Secondly, under China’s current system, the more intermediate links, the higher the cost and the longer the approval time. At least 3 million, 5 million or even tens of millions of preliminary fees have already been spent before the official start. If there is a problem in one of the intermediate links or departments, the more time and cost will be consumed. Thirdly, as mentioned above, the current income cannot support its normal operation, so the number of dock berths built is also a problem. If less than 300 berths are not cost-effective, there is no scale effect. However, if more than 300 berths are built, the cost will be higher, and it will be harder to return the cost without a profit model.

At present, the berth idle rate of China’s yacht docks and clubs is at least 60%. Many yacht ports have been built with plenty of berths, but there are no ships, no professional management and operation. At this time, similar hotel contract operation or trusteeship operation may gradually emerge, which is worth learning from. The yacht will be operated by professional people or teams. However, no matter it is contracted operation or trustee-owned operation, in China, there may be a common problem: just a little improvement may be squeezed out by the owner for various reasons, recover the right to operate, but after the owner takes over and collapses again, which is the most terrible phenomenon.

6. Haizhilan: The vacancy rate of many yacht ports in China is too high. Do we overestimate the development of the market?

Honghui Liu: Yes, the cycle from the initial project positioning to the planning and construction of the yacht port to the final launch of the market is too long, but the market is changing. For example, some new yacht ports built a few years ago are all large berths, but the market has changed after completion. As for why the industry is not good, it may be because the value of yachts has not been realized, and there is no content, so there is no sustainability.

7. Haizhilan: Is there a clear standard for the construction of yacht port? Which department is in charge of these standards? How many berths above are considered yacht ports?

Honghui Liu: There must be. This set of standards was launched by the Ministry of Communications in 2014. In 2009, we participated in the preparation of the Code for Design of Yacht Wharf by the Ministry of Communications, which mainly refers to foreign industry norms and combines with China’s port and navigation standards, including detailed requirements on the technical requirements and standards of harbor pool and yacht berth, storm protection level, and the impact of waves and surges on harbor pool. Yacht wharf, yacht harbor, or sailing harbor, the name is not agreed, there may be many ways to understand the text, but there is no difference from its attributes, for example, like a parking lot, can not say that this is a big parking lot, that is a small parking lot. If it is the first because it was compiled with the name of the yacht pier, then all the later appears with this name. We have learned almost all the industry standards of foreign countries, such as “British Yacht Harbor Standard”, “Australian Yacht Marina Standard”, “American Yacht Marina Standard”, “Japanese Yacht Marina Standard” and “Japanese Yacht Marina Standard”. Among them, Japanese standards are the most professional and detailed, while British standards have the highest requirements for ecology and environment. Finally, there is no regulation on how many berths can be recognized as a yacht port, but I understand that there should be more than 300 berths, which are basically complete and can meet the basic requirements of ship docking, replenishment and maintenance.

8. Haizhilang: Sometimes it is found that some wharf berths are of poor quality, but they can be successfully introduced to the market. Then, what are the acceptance standards of yacht ports?

Honghui Liu: First of all, what is yacht wharf or yacht harbor? In a comprehensive sense, it is the overall combination of harbor pool, floating wharf, breakwater, pile foundation, channel, and shore facilities, collectively referred to as yacht wharf or yacht harbor or sailing harbor, which should be universal. It may be that in Britain, people like to write yacht harbor when compiling, while in Australia, they just write yacht wharf. Therefore, a yacht pier is a complex of services for yachts, such as berthing, protection and logistics support, rather than a single floating pier or a certain facility.

We are familiar with the domestic and foreign standards of the marina industry, and have also designed and constructed marina projects in many countries. At present, the processing level and engineering quality of China are no worse than that of foreign counterparts, but foreign countries are more mature and experienced in detail processing, and have obvious advantages over us in comprehensive cost performance.

Marina design good and bad, should have two concepts. The first is the workmanship, its labor and materials look good or bad. The second is the engineering technical parameters and standards, such as wind and wave protection grade, wind shelter requirements, requirements of positioning pile and harbor pool, harbor pool wave height requirements and other comprehensive requirements. Especially considering the impact of typhoon, the first thing to consider is whether the harbor basin is the best typhoon/flood prevention position; Second, the silt will be very serious, access to the channel is convenient; Third, the wind and waves to the yacht port should achieve what level of protection requirements. The acceptance standard in China mainly refers to the completion acceptance standard of port and wharf, and the acceptance is organized by the owner unit, competent unit, design unit, supervision unit, etc., while it is relatively simple in foreign countries.

9. Sea Blue: When designing the harbor pool, is there any stipulation that the length of a pontoon bridge should not exceed many meters in theory?

Honghui Liu: We have participated in the design and construction of many major yacht port projects at home and abroad, and have accumulated a lot of practical experience. The design of the pontoon bridge mainly includes width and length. The design of the width is determined by two factors, one is the nature of the people serving on the pontoon bridge and the boat. If it’s all big ships, it goes up to 2.5 or 3 meters. The second is the use of the function, the docking ship or may be to do exhibition, water sports or training activities, the latter will be widened, but also to focus on widening a designated position and increase the bearing capacity.

As for the length of the pontoon bridge, there are no exact rules, but there are two factors to determine the design. The first is that the length must be able to meet the service function, including the flow of people. Second, when subjected to external forces, the longer the pontoon bridge, the more likely it is to produce stress concentration and torsion. The correct treatment method, 60 meters or 80 meters will be set up a movable joint to eliminate the stress.

10. Haizhilan: What should we do if the owner puts forward unrealistic requirements in the planning and construction of the marina?

Honghui Liu: That’s a very good question, and we’ve seen this all the time. We have a complete process now. First of all, we’ll give him a written project proposal. Second, no matter in the stage of design, engineering construction or later operation, if there is a disagreement, we will also inform the owner of our opinions and suggestions in written language, and inform the possible consequences. We will tell the truth without any concealment, so there will be no obstacles.

HaiZhiLAN: Thank you for accepting our exclusive interview. We also hope that Mr. Liu’s unique insight on the construction and operation of the yacht port can give some tips to the investors and operators of the yacht port/sailing port. Thank you again for accepting our exclusive interview.