Discussion in 'General Yachting Discussion' started by Joe Deepwater, Feb 10, 2019.
Big useless data is not the rage though.
I doubt such a big industry sees big data as a waste.
It's not one industry though. It's many. And the only part relevant to them is their smaller industry. Averages across it all does nothing for any of them. You're also thinking the average boat builder is far more sophisticated in seeking such information than they are. I'm sure Brunswick has some information on their part of the industry. I'm sure Versa did some studies before buying Hatteras but not of an industry, just of Hatteras and probably Viking, at least the information they could gather on Viking. The majority of "yacht" builders do no public reporting.
I have spent a career in industries where all the data you want is available. Most of the industry was made up of public companies with public reporting. As far as customers, information on every age group was available. Averages were not used. I don't care the average age of a female shopper. I care to understand the shopper in each age group and the size and buying power of those groups.
Most boat builders are dependent on a very small percentage of the industry business. Even trends in the industry may not apply to their niche. The information was always there to help Sea Ray, to explain the trend away from stern drives to outboards. However, their parent chose to protect their sister, Bayliner and delayed. The East Coast is lined with small custom SF builders. The health of the industry isn't their issue, just the health of their company. Their buyers are also not the industry norm. They are most definitely different than the buyers of Viking and Hatteras.
You can't toss all this together in an industry pile because it's just not that.
Being the boat show weekend maybe this thread should have started with brokers and I will tie it together with a manufacturer: Galati and Viking.
Long standing private companies, manufacturer/dealer relationship with plenty of locations to draw data from.
Viking keeps building them bigger and now smaller with the CC. Those companies have plenty of repeat business and work to know their customers and keep them in the fold. How many “Shark Bytes” did they build (he switched to Bayliss) or “Works of Art” and just another “Ditch Digger” to name a few? They probably have the most consistent, over the years, customer relations in the size range. *I have no relation to or have done business with Viking, just an observation* Other brands have changed hands, so why I stuck with them.
Kind of a funny story that is back to the original post: I ended up with a broker and someone I didn’t know at the end of a bar at the boat show a few years ago who asked basically your same question. Who is going to keep buying these yachts at 60’-90’ at these prices and who will they sell them to later used?
The broker waved his arm and said, I sell yachts to the $50million guys, nothing effects them and when they die and their kids split the money there is 2 more clients for me to sell THEM yachts to too!
So maybe the market gets bigger I guess?*
I kid, I kid!
You have to understand something, the economy is what really drives the yacht market. It is an agreed upon expense and an agreed upon loss (depreciation). The Yacht is the last expensive toy a yacht owner will buy and the very first they'll unload in a downturn. Generally a person buys a yacht after their big house is bought, after a few very nice cars (they're easier to wrap your head around expenses and easier to use often), after the vacation house, after the company plane (which in a down turn can still be justified for business travel) and then comes the yacht. When SHTF, the yacht is generally the first to go as it's the highest carrying expense and least used in the fold and absolutely not needed.
Even retirees are effected, your loopers and so forth, as their annual income drops so much that most of them either need to get out temporarily, or greatly reduce their cruising.
Now long term owners, where the economy doesn't effect them nearly as much, generally never buy new, and use a down turn as an opportunity to upsize the yacht.
HMY is a bigger seller of Viking and has a much longer history than Galati. BTW.
What you are saying is absolutely true, in the larger segment. The ample anecdotal evidence I have been producing applies to the smaller market..... 30-40-a few 50's. We're talking apples and oranges. These people have no airplanes and very nice cars. They have a Honda Accord and maybe one 66 Mustang.. There is no doubt in my mind that there is a generational shift in progress in the weekend family marinas. To put it bluntly, the old farts are leaving and the kids don't care. There is more to the recreational boating world than SE Florida. I'm talking Memphis, Biloxi, Cleveland, Chesapeake, Long Island Sound.... the hundreds and hundreds of small marinas that are losing ground. The hobby, that's what it is, is greying out.
A lot of my customers are from those places you mentioned. They prefer to keep their yacht here, use it year round and fly to it. Rather than tooling around in the same muddy looking water. Several of my owners talked about bringing the boat home for a season or two, but never did. Ohio, Louisiana, Michigan, etc etc. I think people with the money to buy a larger yacht from those areas, do so, but never bring it there. Leaving people that can only afford the smaller ones and they’re more local economy and economy driven.
The people I am talking about are not your customers, nor will they ever be. They are no one's customers. They are sailors and boaters. they don't keep their yachts somewhere they need to fly to. And that hobby was at one time in numbers the vast majority of the market. In all the marinas I've been in over the years there were no hired guns. People operated their own boat. The world you live in is not what I'm talking about. As a result of the demographics I have described it is increasing it's share of the boating/yachting industry but it wasn't before.
I'm gonna leave it at that.
What I am getting at, is the people from the area's you mentioned, choose to do their yachting elsewhere. They may have a small boat in Ohio, Michigan, Biloxi, etc. just to go out for the day. But they don't keep their yacht there nor want to go yachting there. Some of my customers do run their yachts themselves, and I simply maintain them and run them on the odd occurance that they can't or don't want to (like to and from the yard). One example is, I have a customer in Louissiana who has a 47' race boat there, he has a 62' MY express here that he jumps on a plane on a Thursday night and in 3 hours is here, does the Bahamas or Key West over the weekend. flies home Sunday night and is back at his business on Monday morning. I have several owners from places that you've mentioned like that. My Michigan guy had a 52' MY and a 43' express in Michigan prior to buying his last yacht here and keeping it here, he bought a yacht in Florida and doesn't have a boat in Michigan anymore besides a 25' pontoon boat. Flights are easy these days. Most have yachts 60-65' now, but their last yacht was a 30'-50' that they kept where they live in Ohio, Michigan, Louissiana etc. etc., and sold that yacht there and no longer choose to go boating there.
The boomers that I know Downsized with the 2008 recession. They moved to pontoons/ center consoles or got out of boating. The opportunity to benefit from a glut of boomer yachts has come and gone in my estimation.
This all started with Deepwater asking whether he should buy a boat in a few years?? Did help you Deepwater....
This question is hard to answer. My parents are friends with a couple, wife 67, and husband 74, who routinely use their 50 bertram alone for day and sort weekend trips to the islands close to the marina (5-10 mile run). The wife skippers the boat and the husband handles the lines and anchoring. Now for longer trips to the further neighboring islands, they prefer to have another couple onboard for assistance.
on the other hand, I have seen younger people who are not as physically able and are not comfortable using their boat alone. So it all depends on the person and their physical shape.
LOL........ All I know is that I WILL be buying and I've been watching Yachtworld for a few years now and I am VERY optimistic that I will buy a well maintained piece of classic plastic from the estate or surviving spouse for a VERY reasonable price.
I'm 70. My wife is 69. We travel for 5- 10 days at a time. We intend to continue to do that until we can't - I hope that doesn't happen for another 30 years. We have a number of cruising mates that have the same plan. I know a couple who sailed their Concordia into their nineties. Any attempt to turn me and my friends into a statistic is meaningless, immo.
I've seen that.... seems wood boats are good for longevity.
First, I need to thank Capt J for correcting me on the HMY relationship with Viking, best to have correct information.
Second, I also have to agree with J's post on "the people from those areas chose to do their boating elsewhere". VERY much what we are seeing from living on the Upper Mississippi. Sell the boat up north to focus on the boat in Florida and have Captain who manages it when they aren't there. It is sad for the clubs as the new members aren't coming in as fast or with the passion for being on the water as when I was growing up.
Yes! You guys rock! A few rounds on me! Many Thanks for your expertise!
Like Captain J said above, we fly into FLL, MIA, or RSW just for a few long weekends during the cold months. Our boats up north are fine for 5 months of summer socializing on the water. Our primary option is considering buying a home in SFL soon and putting it into the rental market. The home is the smarter investment but it lacks the adventure of boating. I doubt it's worth buying a boat in the next 5-6 years since we just won't use it enough, unless my wife changes her mind and wants the adventure of boating over buying a home when we are at the Yacht Show on Friday. The boat is a fraction of the cost of the home, although the boat will only depreciate and the home probably appreciate. Choose the smarter investment or choose the adventure? Most likely choose the real estate.
I think I'm with Oscarvan: sit and watch for a deal on a boat in the next 5-7 years, or a recession. There's a sweet 75' Mochi Craft for sale for 1.2M. I'd co-buy that with a business partner for half price in 5-7 years, along with many other examples out there. I just don't know who will be interested and able to buy these expensive boats in another 5-10 years unless something unexpected happens. There's a bubble of people, a bubble of money, a bubble of boats, and a dearth of younger boaters with the interest to get frustrated with repairing broken boats nor the money to buy and repair them in the first place. Maybe the money will trickle down in the inheritances? I just don't see the average boater hanging on that long.
Every generation says things similar. As a starting point we have to keep in mind that the average boater isn't financially an average person. It's an expensive pastime. Even on the lake. A 21' bowrider or ski boat is $50k. Average couples starting families, trying to buy a house, needing two cars, can't pay that. There has to be some financial success to reach that stage. Then you talk the coast and it's far more. I don't see a shortage of young boaters. Get out on a lake on a weekend.
The other issue is time and that keeps many from making large investments. Those who could buy a 60' boat don't have time to cruise so stick to 25'.
We go through cycles. In 2005, some thought the boom of boat sales would never slow down. In 2009, many thought the industry was dead forever.
The majority of those nice ski boats were bought by their BB parents because young people don't have that kind of money to afford a boat that would embarrass them, or they picked up a vintage boat for $2K on ebay and are dead on the water and in need of a tow. Ask me how I know. Those at my marina are 50-65 and their young adult kids take their boats.