Looking forward at the yacht building industry from the perspective of the 2009 Fort Lauderdale International Boat Show
Traffic seemed significantly down at the Fort Lauderdale International Boat Show. But there were some encouraging signs. One of these is that the industry as a whole appears to be “retooling,” with firms revamping their business models to cope better in leaner times. They are looking closely at issues like long-term marketing strategy, development and maintenance of customer loyalty, and refinement of product offerings to match the likely continuing constriction of the market. All in all, I perceived a renewal of commitment by many industry people to “see it through.” This bodes well for consumers going forward, which, in turn, bodes well for an eventual industry recovery.
My guess, however, is that recovery will come only if the industry continues to respond to changes in the market with new, different, and exciting product. Even when the general economy turns around, only new and exciting product will coax boating and yachting consumers into buying. The same old, same old, will not. I believe strongly that we’re going to see serious demand for boats and yachts with much higher power- and fuel-efficiency, as well as lower contributions to global pollution. Whether that is in the form of fossil fuel emissions during operation or during the manufacturing process. And I'm firmly convinced the market will be looking for products with much higher value-to-cost ratios.
The problem, or perhaps the opportunity, is that many, if not most of the recreational marine industry behemoths have too much invested in outdated tooling and in the current development of “new” product whose time has already passed. Not to mention they are carrying way too much debt. Consequently, we can expect the next few years to be an era of entry into the industry by lean, mean start-ups with new and innovative product. Given that real estate values and costs are down in a major way, that there is a large labor pool currently available, that equipment and machinery are being offered at bargain basement prices, and that there is a horde of talented, but effectively idle designers, naval architects, engineers, and product development people just waiting to be unleashed, I predict we’re going to see a deep turnover in the industry over the next couple of years.