BY APB Staff on 23 Jun 2020

Mike Simpson's hopes for Hainan rise with free trade zone plan

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 the new plan, which reduces taxes on imported yachts to Hainan to zero, is a “real game changer”. The plan is part of a broad effort to turn Hainan Island, known as a vacation spot for middle income Chinese people, into an international trading port and financial powerhouse.

“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.

Simpson Marine To Be In Hainan In Force This Winter 1
Mike Simpson, founder of Simpson Marine

Simpson is hopeful that the new plan will result in a new push to help yacht owners in Hong Kong and China 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.

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. “The market down there has been slower than it was a few years back. 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 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 in the city reporting significant sales ahead of the summer cruising season, including Simpson Marine. The main concern is how long the rebound will last. New marina berths are due to open in Hong Kong this year at the Lantau Yacht Club, the redeveloped Discovery Bay Marina on Lantau Island.

In Vietnam, Simpson thinks the new Ana Marina in Nha Trang will be successful with proper management and quality berthing, and he 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 simplistic stereotype of the Chinese buyer only being interested in mahjong or karaoke rooms hasn’t been valid for quite some time.”

He reports that Asian clients are increasingly asking about expedition superyachts, with one mainland Chinese client buying a Sanlorenzo 500 Exp.

“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.”