A few weeks back, Bob Saxon drove down to Griffin Road to drop a fishing line in a canal. He figured he’d have a quiet time; it wasn’t a particularly busy day, and he didn’t reckon there’d be many boats out. Instead he witnessed what just about looked like a maritime traffic jam. “It was as if it was the Winterfest Boat Parade,” he said of all the boats on the canal. Saxon was surprised – and when it comes to boats and yachts, he’s a hard man to surprise.
Saxon has spent four decades in the yachting industry, working in everything from brokerage to charter and crew placement to general advisement on every part of the business. He’s the president of the International Yacht Brokers Association and a vice president at HMY Yachts. Past positions include vice president at Marine Max and president of International Yacht Collection, as well as senior leadership positions at a handful of other names that mean something in the yachting world. Simply put, Bob Saxon knows the yacht business.
And he’s never witnessed anything like what’s happened in the last half year.
“I’ve never, in all the years I’ve been in the business, seen it hotter than it is right now,” he says. “We are on record-breaking sales progressions.”
And he notes, it’s not just the mega-yachts. If you’re in the market for something like a 32-foot center console, you might find the inventory at your nearest boat dealer a bit thin.
Boat industry leaders also say there’s a shift in who’s coming through the doors, with younger and first-time buyers driving much of the sales boom. That’s good news for an industry that has long cited an aging customer base and lack of newer customers as one of its major concerns.
The reasons for this on-the-water boom aren’t necessarily surprising. Most people have heard about the industries that have not only survived but thrived in COVID-19 times. The boating and yachting industry has been one of those. Simply put, for those who can afford it, a boat is the ultimate social distancing recreation purchase.
“People are seeking out privacy – and with as much of a public health concern built into that as well, yachts are perfect for that,” Saxon says.
But as logical as all that might seem now, it’s not what industry people were thinking in the early days of the pandemic.
“In the first two weeks of March, every single person in our industry went ‘Oh my God, are we in for it. This is going to be worse than 2008,’” says Paul Flannery, International Yacht Brokers Association executive director. “Everybody in our industry was worried we were going to get absolutely clobbered.”
And briefly, everybody was correct. March sales fell off a cliff. Shell shock persisted into April. But then came May. The sales charts’ downward trajectories flipped, and they haven’t stopped yet. Flannery can even put an exact date on it.
“May 17 was the day we reemerged from a dip and I wouldn’t say it’s been vertical, but it’s been damn close.
“There isn’t anybody I know in this industry who isn’t absolutely flat-out trying to keep up right now.”
Statistics back up the anecdotes. According to the National Marine Manufacturers Association, earlier this year sales of boats had increased by 74 percent, with 70 percent of dealers reporting more sales.
It’s been a disorienting year not only because of the panic that set in at the beginning of the pandemic but also because even before COVID-19, 2020 didn’t look like it would be a big year. The business boomed in 2019, but some industry leaders looked ahead to 2020 and saw troubled or at least slower times.
“Every year you try to be optimistic, but you try to have humility,” says Phil Purcell, president and CEO of the Marine Industries Association of South Florida. “Everybody was like, ‘Maybe it’s going to be flat.’”
Everybody was looking at the same indicators. Purcell cites one industry that typically provides a useful gauge for what’s about to happen in boating and yachting.
“Historically, we follow RVs,” he says. “RVs went into a recession probably a year-and-a-half ago.”
Then the pandemic hit, and people decided they wanted to take their hotel rooms with them. According to the RV Industry Association, the recreational vehicle industry this year posted its highest July shipment numbers in four decades, a 53.5 percent increase over units shipped in July 2019. Like the boating and yachting industry, the RV industry offers diverse products and price points – from large luxury motorhomes to pop-up camping trailers – and increases have been seen everywhere. And, Purcell notes, boats have followed.
Now the industry wants to keep the momentum going, particularly with those younger and first-time buyers.
Welcome Aboard, Rookie
As a peppy, Top 40-style pop song extols the virtues of boating, rapid-fire images flash by. A fishing pole. Children swimming. A woman smiling as a boat cruises on a lake. Another boat speeds across the open ocean. A man holds a just-caught fish triumphantly over his head. It looks fun, cool, family-oriented and attainable – which is the idea.
The 30-second spot, titled “Get On Board: The Water Is Open,” was unveiled this summer as part of a larger Get On Board campaign. The campaign is backed by the Recreational Boating and Fishing Foundation and Discover Boating, an advocacy group backed by a number of different boating industry organizations. Its goal: combating a problem the industry has long known about.
“We’re not bringing people into boating as fast as they’re growing or dying out of it,” Flannery says.
According to a 2018 NMMA report, the average age of an American boat owner is 58 and more than half of all boat owners, about 53 percent, are between the ages of 50 and 69. The report also showed declines in overall boat ownership since 2000 that were not precipitous, but consistent.The average age of a first-time boat buyer was somewhat younger at 46, but the report concluded that the industry needs to get better at attracting younger boaters. It also offered some ideas on how to do that.
The report extols the industry to sell the experience rather than the product – make it more about the pleasures of being on the water than the horsepower of the engines. (The report specifically cites the RV industry as being better at this than the boating industry.) Get more savvy about online sales. Understand that younger consumers demand corporate responsibility. Basically, be amenable to change.
That’s not always been an easy sell in the boating industry, but people have been trying. Flannery is impressed by efforts like the Get On Board campaign.
“They’re incorporating influencers to get in front of a crowd they’ve never been in front of before,” he says.
Another challenge, Flannery says, is giving potential buyers the same sort of consumer experience they’ve come to expect from other industries. If you can afford a boat, you can probably also afford a nice car – and the dealership that sold you that car knows how to treat you. You might get a call at your desk at work at 3pm by somebody letting you know that your car is due for an oil change and tomorrow at noon, they’ll stop by to pick up your car and leave you a loaner. That sort of service, plus areas like digital marketing and online sales, are the kinds of things Flannery and IYBA have been trying to educate boating and yachting professionals on.
Now though, they’ve suddenly got an opportunity. The pandemic has sent more first-time customers through their doors; Flannery estimates about half of all customers in the past half-year have been first-timers. How to preserve that – how to make these curious COVID-19 boaters into committed lifetime boaters – “this is the challenge I pose to the industry right now,” Flannery says.
Other challenges also exist, not least in the education that first-time buyers require. This is particularly true in the yachting sector where, Flannery says, first-time buyers often treat it like buying a vehicle.
“It presents quite a number of challenges,” Flannery says. “We’re getting a lot of these guys coming out of the woodwork, saying ‘I want a boat,’ getting a contract and never getting to closing. The guy’s looking at a $2 million used boat, and he doesn’t understand he’s buying a municipality.”
“Municipality” might be slightly over-egging it, but not by much. When you buy a yacht you’re essentially buying the equivalent of a house, several vehicles, electricity, waste and garbage systems, etc. The pre-sale inspection might take a couple days and come up with hundreds of items that might startle a prospective owner.
“They’re miniscule things, but he doesn’t know that,” Flannery says.
Doug West sees plenty of new and experienced yacht owners. As president and CEO of Lauderdale Marine Center, the sprawling compound visible just east of I-95 along the south fork of the New River, West oversees an organization that provides space for any number of yacht maintenance-related businesses, as well as quite a few yachts.
Those yachts, West notes, have a built-in educator for the novice owner – the captain. Yacht captains manage the budget and maintenance schedule; good ones also walk owners through the process and minimize surprises.
“Most of these bigger boats, if they have a good, qualified captain, that captain is going to tell (the owner) what it’s going to cost to operate and maintain that boat for a year,” West says. “The captains are the ones who are managing the maintenance cycle.”
Another sector that helps the entire yachting industry by bringing in new buyers is yacht charters, Saxon says. Smart yacht brokers use that two ways, he says – to convince potential owners that they can make their yachts work for them when they’re not using them, and to tempt unconvinced potential yacht owners into yacht ownership. Some would-be yacht owners can get hung up on the idea that they’re only going to use their new purchase, say, six to eight weeks a year. Likewise, chartering a yacht is a good way to get into it without the full commitment of ownership.
“When you have … people who are concerned about not being able to use the yacht themselves or they don’t even know if they’ll like it in the first place, that savvy broker will say ‘Why don’t you try charter, see if you like it,’” Saxon says.
And when people try yachting, he says, they usually like it. He says 78 percent of people who buy a yacht have chartered at least once. Chartering, he says, is how you bring people in.
With the Greater Fort Lauderdale Broward County Convention Center largely a construction site in the midst of a massive remodel, the timing was actually pretty good for a smaller Fort Lauderdale International Boat Show. As with so many things in these pandemic times, plans can change. But as this story was being written, the people who run the show were planning on a smaller, safety protocol-driven FLIBS centered on its other main home, Bahia Mar. By the time you read this, perhaps plans will have changed again.
What isn’t changing, however, is the idea that industry modernization needs to also make it to the industry’s big, show-pony events – including the biggest of them all, FLIBS. In recent years, boat show attendees might have noticed more “experience”-driven activities – big boats are still the main draw, but simply looking at them doesn’t cut it anymore.
Saxon sees a big shift, with those savvy, internet-capable younger buyers not necessarily being interested in their fathers’ boat show. The IYBA runs the Miami Yacht Show, which is based on Biscayne Bay right in the middle of downtown Miami and in recent years has run alongside major modern art show Art Wynwood.
“I’ve been preaching for a long time that our traditional boat show model has to change,” Saxon says. “A boat show has to become a destination with other draws than simply yachts. The Miami (Yacht Show) has been losing attendance – not dramatically, but it hasn’t been keeping pace with when boat shows had cachet. You can’t just have the boats and expect people to go.”
Art Wynwood has helped, and they’re refashioning the Miami show to be even more event-driven, he says. He’s also hopeful for Fort Lauderdale, where he sees similar trends happening.
“There’s a lot of energy,” he says. “And there’s a lot of enthusiasm.”
The boating and yachting industry has been handed an odd and unexpected gift. Now, longtime industry leaders are trying to figure out how to continue the modernization pushes they’d already begun while capitalizing on momentum and new customers they never expected.
“The industry is on fire,” Paul Flannery says. “We’re seeing unexpected growth.”
But it’s growth that won’t last forever – and that won’t truly benefit the industry in the long term unless the industry is smart about it.
Says Flannery: “Like Winston Churchill said, never waste a good crisis.”