Owner’s View: Yachts that don’t adjust will lose some portion of market

May 12, 2020 by Guest Writer

By Melvyn Miller

After reading Kevin Towns’ commentary about yachting surviving COVID-19, I wanted to point out that the head of the Johns Hopkins group reminded us recently of the unavoidable numbers. There are 90 million people in the U.S. who are dangerously vulnerable to COVID-19, which is one third of the adult population. That vulnerability will be mitigated by therapeutics starting soon, and by wide distribution of a vaccine in about two years, but the virus will always exist in some humans and the vulnerable will always be more vulnerable, as they are to flu and other viruses.

There are approximately 150 million U.S. adults who want to work and most of them will not perish if infected. As is the case with the common cold and many forms of flu, a very large number of them will be infected by this new virus many times over their lives, especially if they have school age children, and they or the children will infect some number of the same 90 million vulnerable people. Even with widely available flu vaccines, approximately 50,000 mostly vulnerable people perish from flu annually, which is not high enough to convince many of the 90 million to avoid contact with the 150 million and the children.

Although it is certainly possible that after a two-year period the 90 million vulnerable will accept the COVID-19 risk of more contact with the rest of the population, it is highly probable that the 90 million will be much more reluctant to do so until a vaccine is widely distributed and the death rate is much lower. That reluctance will have major consequences for the working people who must come in contact with customers or clients.

The 90 million are only one third of the adult consumers, but they hold the majority of the productive assets and thus are a very important part of both the service and product sectors of the economy. If only half of the 90 million decide that they do not want to die from COVID-19, at least 45 million people will not interact with any provider who is not wearing a face mask and maintaining a virus-free workplace. Thus, some number of the jobs previously performed by the 150 million workers will not exist for at least two years, and may be permanently replaced by less infecting alternatives such as online purchasing and food delivery.

Cruise ships, hotels, concerts, sporting events, bars, restaurants and yacht chartering will exist, but at least 45 million customers will be lost except to providers that can interact without infecting customers. Many service businesses and providers will never develop that skill. Some will exist throughout the most dangerous few years by serving only children and the less vulnerable two-thirds of the adults. Many will fail and find another way to support themselves.

The final determination will be made by the 90 million. Those who accept the risk of fewer remaining years in order to live like the less vulnerable 150 million will not inconvenience, or cause a reduction in the number of jobs available for, the 150 million. Those who do not accept that risk will establish a relatively safe (isolated) living space, will limit access to that safe space, and will venture from that safe space only in a safe manner, which implies they will only reluctantly enter non-isolated spaces. This will create a defined subset of safe virtual and physical commercial spaces. The vulnerable will also seek providers that do not infect them, which will create a defined subset within the 150 million potential income earners.

All dark clouds have silver linings. There will be increased opportunities for businesses and individual providers who add safety from infection to their offerings and fewer opportunities for those who do not.

Melvyn Miller is an American yacht owner from the U.S. East Coast. He has owned and operated yachts for six decades and employed crew for more than 30 years. Comments on this column are welcome below.