By Dorie Cox
As the Miami Yacht show ramped up speed on the shore of downtown Miami in mid-February, yacht brokers and industry vendors hoped to make the annual show worth the trip with sales.
To increase understanding of the U.S. market and the sale of yachts in the United States, Brandon Flaherty, sales broker with MarineMax, and Crom Littlejohn, commercial director US with Northrop & Johnson, addressed a small audience during a forum moderated by Superyacht Times with Merijn de Waard, its founder.
Although their share of the market has decreased slightly from 2018 to 2019 when recorded by number of yachts, length and volume, more Americans still own more, longer and larger yachts than any other nationality in the world, according to data compiled and analyzed by Superyacht Times.
About 22.7% of all yachts over 40m are owned by Americans (the second closest are Russians at 10.6%). By length, Americans own 22.1% of those vessels; Russians are second at 10.6% again. By volume, Americans own 19.4% of the yacht fleet, with Russians at 14.7%.
With a decrease in the number of U.S.-based yacht builders, the question was posed, Are European yachts suitable for the U.S. market? Modifications to interior spaces can help sales of European yachts in the U.S. market, Flaherty said. American consumers prefer larger refrigeration capabilities than a typical European client and prefer more storage space, he said. “U.S.-built boats have large closet spaces. We’re working with them [builders] on increasing the volume on European boats.”
We see more European and Taiwan builders; can the U.S. enter this market? Building materials and supplies are more of a challenge for the U.S. but customers do want U.S.-built vessels, Flaherty said.
Although the market does want yachts 30m and above, the U.S. market has one to two builders, said Littlejohn.
“We get that because of environmental restrictions, Longshore insurance, and the cost of labor here is triple,” Littlejohn said. “Americans go where the boats are available, which is Europe.”
Although the pool of new U.S.-built yachts are not growing, there seems to be a lot of trading around of used boats in the United States, according to de Waard. One reason is that Americans are more comfortable with fiberglass construction; it lasts and continues to hold value, Littlejohn said.
Large U.S. boat builders have disappeared. What could help?
“If we don’t get deferred importation tax changes, it is going to be a deterrent forever,” Littlejohn said. “Yachting is not a trickle down industry; it is a flood down.”
And regulations need to be addressed including new emission standards coming into play on vessels 78 feet and larger, according to Flaherty. This will affect boats with a reduction in interior space by January 2021.
How important is physical location for selling and buying boats? “Obviously, Fort Lauderdale is a prime location to have a boat,” Flaherty said. “Visitors can have multiple choices.”
Northrop & Johnson has three offices on the U.S. west coast, according to Littlejohn. Due to less inventory and longer distances between boats for sale on the west coast, clients are limited to just a few choices at each location.
“But in Fort Lauderdale, you can see a dozen yachts on one dock,” Littlejohn said. “First, people look locally where they are, but eventually find themselves in Fort Lauderdale.”
Americans like faster boats. How much does that play into sales?
“During the last 10 years, we have seen high speed boats, but now that trend is more toward the 10 to 15 knots for increased comfort,” Flaherty said. “I would say we’re in transition.
“On the larger boats, they enjoy the 12 to 15 knots,” Littlejohn said. Yachting is a lifestyle for families, instead of traveling from one cell tower to another, they get full communication during a trip, which allows everyone full streaming and connecting, and “boating becomes more enjoyable for the family,” he said.
What does it take to sell a boat in the 80- to 120-foot range?
Innovations like the axe bow, a wave-piercing type of design, make more interior space available, Flaherty said.
“It allows for five staterooms on a 100-foot yacht,” he said.
“The American market seeks features they find in their home,” Littlejohn said. “Europeans want a different experience on their boat.
“Also, more owners get out of yachting with unpleasant crew situations,” he said. “So keeping crew happy with better cabin configurations and amenities, it helps incredibly. And engine rooms that are not as intimidating for owner-operators.”
The seminar also addressed a few current events including the coronavirus, which the panelists agreed could be a factor in yachting. A recent charter trip was cancelled when guests arriving from Southeast Asia were denied entry into the Bahamas. And the upcoming U.S. presidential elections in November may play a temporary part in end-of-year sales.
“Every year, the election is an excuse for buyers not to move forward,” Littlejohn said. “Buying will slow toward year end, and then everyone will move on. I sure hope so.”
Dorie Cox is editor of The Triton. Comments are welcome below.