The Sailboat Business

[camaraderie]

I thought some of you might be interested in reading this article from IBI detailing the state of the sailboat industry in N.America in 2007. Here's the link:
North American sailboat production declines by 5 per cent for 2007

Some highlights:

• Biz was down 5% in units.
• 14,158 hulls were produced...but of that total 11,265 were 19' or under leaving only 2893 over 19' ...2284 were 20-40'...40-45' were 609 and just 250 over 46'. Isn't it amazing how really small the sailing business is?
• This is the 7th straight year of production decline for sailboats. $$'s are growing a little because of the shift to more 46+ boats sold...the only category with a gain.

[T37Chef]

I wonder how much of the decline in sales of sailboats is due to economy and how much (if any) is due to lifestyle changes, people with less free time for example? Powerboat sales are up aren't they?

[ccam]

Cam,
An interesting statistic of which I'm sure your familiar with is that approx. 6000 people are retiring daily in the U.S. -So Concerning Sailboats: For instance my father truly wanted a sailboat but felt he couldn't handle the sails at his age. However, he would consider a trawler. If we were to concurrently look at the sale of Trawlers I think it will show an increase of proportion.
Your thoughts?

[Sapperwhite]

As far as that goes, a lot of people look toward retirement with a nice goal. When (if) they reach retirement age they find they are too old to do the things they thought they would be doing. They have to resign themselves to do something less strenuous, physically and possibly fiscally. It sucks, but it might be true most of the time.

I think the stats are a lifestyle indicator. More and more people can't justify owning a boat and a home (and three cars and a pool and an rv and a vaction every year etc etc champagne lifestyle). Those that want to boat can find an acceptable used boat (look at me). Why buy new when there are many suitable used boats for sale at a more reasonable price, particularly if you are just a weekend warrior?

Cam, where do you get used sailboat sales stats? I be interested in that, just for comparison sake.

[sailingdog]

Prices of raw materials are going up with the cost of oil. Market is relatively fixed in size. Manufacturers have been slowly increasing the size of the boats they're focussing on to increase their profit margins, but the market for larger, more expensive boats is smaller than that of smaller, more affordable boats. It really isn't too surprising that the number of boats being built is declining.

The boats <20' include any sailing dinghy, including Optimists, Sunfish, Lasers, etc... and do not really reflect the cruising sailboat market IMHO. Yes, there are some small pocket cruisers that would fall into this range, but they're a minority of the production in this size range.

[ccam]

Hey Sapper,
Just a friend back from Honduras, where like all south america is becoming the new reality boom. Panama, Costa Rica and Southern Mexico for a long time have been a retirement meca for Texans and others. In the conversation, Condo's with Ocean front property were going for 150k with a U.S. title in this Honduran town! Hmm! I can't be specifc Sapper, but if you need I'll contact and PM U. His point to me was why are seniors paying 1E6 for overpopulated Florida when you could have a beach 2 hours from Houston for the same amount.

CC

[Sapperwhite]

I'm 27, retirement isn't for a little while (at least not "planned" retirement ).

I know the lifestyle can be had for much less elsewhere than you can buy in the states. My comment was more about waiting too long to do it. Why wait till your life is almost done to start living it?

Florida?!?!? I like to call Florida "The Silent Holocaust". People work their lives away just to go to Florida to die. When they get there they pay out the ass to do it. Doesn't sound like fun to me.

[Cruisingdad]

Originally Posted by ccam

Hey Sapper,
Just a friend back from Honduras, where like all south america is becoming the new reality boom. Panama, Costa Rica and Southern Mexico for a long time have been a retirement meca for Texans and others. In the conversation, Condo's with Ocean front property were going for 150k with a U.S. title in this Honduran town! Hmm! I can't be specifc Sapper, but if you need I'll contact and PM U. His point to me was why are seniors paying 1E6 for overpopulated Florida when you could have a beach 2 hours from Houston for the same amount.

CC

This will come across negative, and I do not mean it to. I am often called and hit with these foreign investment things. I know some guys that went down to Costa Rica. Beautiful pics... definitely one of the more gorgeous parts of the world.

HOWEVER...

Just remember, your investment in an American, Canadian, or European property is most likely secure (assuming no WWIII). You invest in some third world country you seriously put it at risk. There are MANY examples of this - especially out of South America and neighboring states. As a matter of fact, just go 60 miles south of Florida. THere were people with US flagged sailboats there that were confiscated... not to mention their real estate. All you need is a small revolution (which, given the political environment and unrest, is quite possible).

As such, 3rd world country's property SHOULD remain considerably less expensive as there is a real potential to lose, in entirety, that investment... and with little or no warning.

I am not discouraging foreign investment in 3rd world countries, but they always hit me with that line too (about how cheap and more beautiful it is than Florida, for example), but often neglecting to mention the economic and political realities surrounding that decision. In my opinion, you cannot compare it to FL, Europe, etc. It is like comparing penny stocks to the S&P 500. You might lose money on P&G or Coke, they might be expensive, but in the end, they will always be there.

Just my opinions.

- CD

[Cruisingdad]

Originally Posted by camaraderie

I thought some of you might be interested in reading this article from IBI detailing the state of the sailboat industry in N.America in 2007. Here's the link:
North American sailboat production declines by 5 per cent for 2007

Some highlights:

• Biz was down 5% in units.
• 14,158 hulls were produced...but of that total 11,265 were 19' or under leaving only 2893 over 19' ...2284 were 20-40'...40-45' were 609 and just 250 over 46'. Isn't it amazing how really small the sailing business is?
• This is the 7th straight year of production decline for sailboats. $$'s are growing a little because of the shift to more 46+ boats sold...the only category with a gain.

That is not much of a suprise, but unfortunate.

I think that the trend in sailboats is to make them more appealing to those who might otherwise have interest in motor boats and trawlers. I would expect the high oil prices to make them even more attractive, though they have an impact on the manufacture of sailboats too. Just makes sailboats cheaper to operate.

But lets talk economics... in order to get many of those creature comforts on a boat, it requires room and power... both of which exponentially add to the cost of a boat - especially a sailboat. And the boats have already gotten rediculously expensive. A new 40+ Catalina will run you close to 300k (or more) by the time you get her outfitted. Let's not even talk about a Hylas or other high end boat.

As such, it make you wonder if they are pricing themselves out of the market. It is not uncommon today to pay MORE for a boat than you do your house. That is a tough pill for many retiree's to swallow (and almost impossible for young families), espcially with the real and likely notion that it will depreciate AND that does not even cover the cost of owning a boat (maintenance, repair, operation, and let's not forget a slip!!!). In many instances, the cost of ownership is more than the monthly payment of the boat.

As such, it is no wonder to me the business is hurting. In S Florida, for example, they have constructed very large barns to house motor boats (even large cruisers... like Sea Rays). It is a big business, and realtively expensive, but at least it gives motor boaters an ability to house their boat and a reasonable cost. That option is typically not available for sailboats because the mast prevents it. There is no stacking and generally no putting it in a barn. It requires land to dry dock, which is VERY expensive real estate as it would be waterfront.

In essence, what you save on Diesel you will likely spend on maintenance - assuming you can get a slip at all.

I do not see a big turn around, ever. I would expect to see used sailboats maintaining or increasing their value. It is very suprising to me that they have not already and that the used market is not red hot.

Just my opinions.

- CD

[sailingdog]

Hey, aren't you supposed to be on vacation???