Competition in Mediterranean and Pacific Regions - Essay Example

Competition in Mediterranean and Pacific Regions The Pacific and Mediterranean regions have developed to become some of the leading sailing destinations in the world. Just like any other business, investing in the yacht industry offers some challenges to the investors among them being competition. Competition from other service providers defines many aspects of the business including location, pricing as well as sustainability of the business. The two regions present different competition challenges to an investor willing to initiate operations in the both places concurrently (Ferrill, 1996, p24). A tremendous growth opportunity is offered by the yachting industry, especially in the Mediterranean and Caribbean cruising grounds which have an international profile already established as luxury vacation areas. Establishment of marinas, yacht club resorts and companies have assisted in creation of competitive edge needed in the yacht industry. There are competition issues that arise due to natural occurrences such as seasonality of the environment and the holiday seasonality occasioned by the period of the year that the market is in. Generally, competition rises when the season is favourable for sailing, as determined by these two factors. This study examines the position of competition in the yacht industry, both in the Mediterranean region as well as in Pacific region (Stanley, 2004, p12). Competition in Mediterranean Region Yachting under the charter system includes renting yachts which can be analysed by the nature of other yachting services at offer in the market (Yacht Charter Guide, 2009). Other yacht services in these areas include solo owners, fractional ownerships, fractional sharing and clubs offering the same services. Yachting services customers consider many factors which position a specific yacht service provider as the better option. These factors include time flexibility. Time flexibility is dependent on the customer’s needs as well as the company’s regulations. Crewed charter yacht terms of offer are made based on market situational analysis. Yacht charter services are well established in the Mediterranean Sea region than in the Pacific Ocean because the European market is well established than it is in the Pacific region. Some of the leading destinations in the Mediterranean region include the coastline of Croatia, Spain, Italy, Greece, French Riviera, Corsica, and Turkey. The Mediterranean region has the best and riches sailing accolade in the entire world. It attracts the best sailing technology and innovation, partly due to its history and partly due to the cultural background and significance that sailing has in the region (Herreshoff, 2007, p53). There are many charter yacht service companies, established to meet holiday sailing. The Coastline of Croatia is particularly established for holiday sailing due to its ideal islands equipped with a network of port services. The weather is ideal for many holidays in the Mediterranean Sailing is enabled by the flexibility of stopping at a number of ports with hospitality services well designed to take care of the charter yachts. Other sailing destinations make it ideal for charter yachts from any of the other regions. The Mediterranean Region therefore has attracted competition for the offering of yacht services, which is preferred due to convenience and time flexibility (Yacht Charter Guide, 2009). The major competition threat in the Mediterranean area comes from the islands which offer competitive services to edge past each other. These services offered by other major countries with a richly development maritime infrastructure that facilitates sailing business alongside other shipping services. Yacht sailing events in the Mediterranean region contribute to seasonality competition where hiring becomes more pronounced than at other seasons. The rise of the Middle East as a sailing destination in the region has also contributed a huge competition element against Mediterranean in the recent years. Charter services are on the increase in the region with Abu Dhabi and Dubai leading in the business around Middle East. It is expected that competition could be even higher today were it not for the political instability and terrorism threat that the area faces. It is reported that the United Arab Emirates (UAE) is investing heavily to facilitate the yachting business to boom in the region. Attracting sailing and yachting investment in the Middle East is favoured by the fact that the region is endowed with white sandy beaches ideal for holiday. Even if the most preferable destinations have traditionally been in the Caribbean, Pacific, Mediterranean and the Indian Ocean, there is a rising adventure for other destinations (Ludmer, 2002, p109). The Middle East ranks among such other destinations and the leading yacht brokers are contemplating to tap this rising market. However, apart from the political issues in the Middle East region, piracy and legal restrictions in the region also act as a hindrance for the region to launch top flight competition against the Mediterranean region. Competition in the Pacific The pacific sailing region faces competition mainly from the Mediterranean region rather than from the neighbouring Islands. The Pacific region is characterised by the huge number of islands that are located closely geographically. However, the sailing business organization in this region eliminates unnecessary competition. The main competition in the region emanates from the manner in which brokerage is controlled to create a competitive edge among the many agencies. Investors hire their yachts through brokerage firms which also extend their services to other regions offering sailing services (Hofsomme, 2009, p37). The pacific region also gets some form of competition from the Caribbean region, which serves the Americas. It is a common phenomenon for the two regions which share almost similar regional conditions competing for the sailing market. There are many companies operating the region that facilitate the creation of various ownership plans such as fractional sharing systems in order to increase their competitive power. Although the Middle East poses some competition threat in to the future, it is not as serious as the sort of competition posed by the Caribbean or that posed by the Mediterranean sailing industries. Some sailing companies operate from more than one region, which increases the competition level in the region. The reason for the relative competition between the three regions and the Pacific is the seasonality factor that enables other regions to compete for the Pacific market (Ireland, 2009, p109). Investing in the Pacific region in a charter yacht business will have a better competitive environment than in the Middle East. Unfavourable competition is eliminated following the organization of business in the region where charter organisations shield investors from adverse impact of competition. It is possible for charter yachts to move to other regions for competition purposes during low seasons. The opportunity to create exploration to the Middle East may not be comfortably possible during off seasons in the Pacific region due to the tight regulations in the region. Piracy issues are also a threat in case there is need to move for other competitive sailing destinations like the Middle East during off seasons (Snipe World 2009). References Ferrill , A. M., (1996) Business torts & unfair competition: a practitioners handbook. Chicago, IL: American Bar Association Herreshoff, L. F., & Spectre P. H., (2007) The golden age of yachting. Dobbs Ferry, NY: Sheridan House, Inc. Hofsommer, D. L., (2009) The Southern Pacific. 1901-1985 Auston, TX: Texas A&M University Press Ireland, A., (2009) An adventure with a genius. Charleston, SC: BiblioBazaar, LLC Ludmer, L. H., (2002) Cruising the Mediterranean: a guide to the ports of call. Edison, NJ: Hunter Publishing, Inc Snipe World (2009) “Yacht Charter Vacations on the Caribbean and Mediterranean.” Viewed on 30th October 2010 < http://www-snipeworlds2009-com.pdf> Stanley, D., (2004) Moon handbooks south pacific. David Stanley Yacht Charter Guide (2009) “Private Yacht Rentals.” Viewed on 30th October < http://Swww-yachtcharterguide-com.pdf> Read More