A View from Here

Bill's Sisson's weekly Trade Only blog

Large yachts turn heads, but don’t forget the jobs

I live in small boating town on the lower Connecticut River and it’s hard to go out after work and lift a pint without bumping into someone who makes his or her living in our industry.

The lineup includes brokers, designers and a long list of talented characters who maintain, service, repair and rebuild boats. They spray Awlgrip, do canvas work, drop in new engines and install electronics. They teach sailing, drive pilings, run charter boats and can fabricate out of wood, metal or composites just about anything your boat could need.

Some have worked for decades in the local yards and marinas. Others are independents. My brother-in-law is a boatwright. My oldest brother is a captain who maintains a small fleet of boats for private owners. This time of year, he works seven days a week, and if I happen to reach him by phone, he’s usually on a boat.

And if the guy next to you in the pub doesn’t work in the industry, there’s probably a 50-50 chance he or she owns a boat, which means that person is paying for a slip, repairs, maintenance, fuel, storage, upgrades and so on.

Boating helps make all these small local economies whirl, pumping many thousands of dollars into direct marine businesses as well as those that are not so obvious, everything from restaurants to hotels to real estate.

On a national scale, recreational boating in 2013 contributed about $36.7 billion in direct sales of products and services to the U.S. economy, a 3 percent increase over 2012, according to NMMA figures.

In a place like South Florida, recreational boating represents big business. The economic value of recreational marine industry in the Sunshine State is about $10.35 billion annually – and growing.

There are more than 5,500 businesses and tens of thousands of jobs built around servicing, storing and repairing the more than 870,000 boats registered in Florida, the most of any state. And Florida leads all states in just about every marine business category, from the number of boatbuilders to the number of boats sold.

Marine commerce is the leading industry in Great Fort Lauderdale and Broward County – larger even than tourism – accounting for more than $7 billion in total economic impact, according to the Marine Industries Association of South Florida.

And the Fort Lauderdale International Boat Show is a powerful financial driver for the city of Fort Lauderdale and South Florida. The economic impact from what is the largest boat show in world – FLIBS attracts more than 100,000 visitors and has 1,500-plus boats on display – is estimated at over $600 million. Fort Lauderdale Mayor Jack Seiler calls it our “Super Bowl, Christmas and New Years” – all rolled into one event. That’s not just political hyperbole. The economic activity generated by Fort Lauderdale International Boat Shows tops that of the Super Bowl.

Also, the combined economic impact of the Miami International Boat Show and the Yacht & Brokerage Show in Miami Beach in February is close to $1 billion.

Another observation. While it’s difficult to miss the large yachts that one sees in South Florida year-round, what is less apparent on first glance I think – even to those who work in the industry – are the jobs and businesses that they create and support.

Building a 150-plus foot yacht takes a good couple of years or more. And during that time, that one yacht will support hundreds of workers and their families with skilled jobs paying good wages. That’s a big part of our industry’s story.

The New York Times recently had an interesting article on this topic.

The long economic tail associated with these yachts is significant. I saw one estimate that put the total annual expenses for a 180-footer at about $4.75 million. That includes about $100,000 for food and beverage fees and about $1 million for maintenance and repairs.

A decent rule of thumb holds that owners will spend about 10 percent of the value of the boat each year on maintenance, service, upgrades and the like. Much of that spending makes its way to small businesses that boost local and municipal economies – right down to the local waterfront pub, where this story began.

Comments

2 comments on “Large yachts turn heads, but don’t forget the jobs

  1. Bob Johnstone

    You hit the nail on the head, Bill:

    A very enlightened government (state or federal) could offer a tax deduction on the purchase of yachts which would indirectly return more revenue than they gave up and with such a labor intensive product, create many more new jobs…not just to build the vessel, but for years afterwards, servicing and maintaining it as you point out. Rhode Island figured it out with “0″ sales tax on boats and Florida took a big step, capping the sales tax at $18,000 no matter what the super yacht cost. This could be Plan B for Warren Buffet: a Robin Hood strategy to have the wealthy take money out of paper instruments and put it to work building American yachts and creating jobs… and loving it!.

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