Three years ago, Hurricane Wilma clobbered the 46th Annual Fort Lauderdale International Boat Show, not only putting show sites through a brutally destructive storm blender but sweeping away millions in lost business for exhibitors. Now, as a flotilla of yachts and superyachts churns down the Intracoastal for the 49th annual show opening this week, there's another storm brewing. Call this one the Recession of '08.
People in the boat business, some of whom do more than 30 percent of their annual business during the five days of the Fort Lauderdale show, are of two minds about the way hard times affect the market. Either the family boat is the first thing to get dumped — or it's the one beloved item passionately clung to, through thick and thin, by wave-skimming dreamers.
Henry Schoone, an independent boat broker from Fort Lauderdale, who does business as Schooner Yachts, puts it bluntly: Look for straight-ahead cash deals. If you want to buy a boat right now, don't count on getting financing, he says. A boat is the last thing a bank wants to lend money for during a huge credit crisis.
"Boats are mobile, and they can depreciate very quickly," Schoone says. "Think about it. If you stick your car into salt water for a while, what'll happen?"
Still, says Dane Graziano, senior vice president of Show Management, which operates the boat show, boat fanatics are holding onto their boats — and buying new ones. Like always.
"It's their lifestyle, their luxury," Graziano insists, adding, "This is a fabulous time to buy a boat."
All the sailors and would-be sailors, those dudes (and dudesses) with the characteristically dreamy, horizon-searching gaze, will be out in force this weekend for what's ballyhooed as the world's largest boat show. There will $3 billion worth of boats and merchandise on display, according to Show Management, though Tailpipe is still trying to figure out how they arrived at that sum. (The 'Pipe pictures a haunted-looking accountant with an adding machine toting up the price tag on each item, from 99-cent Allen wrench to $65 million superyacht.) Last year, the figure was $2 billion. Quite the jump in a gloomy economy.
Boat fanatics will sit in speedboat cockpits, rest their hands on sailboat tillers, and walk gingerly through the yachting Big Boys — like Christensen Yachts' 163-foot Casino Royale, a 007-themed yacht with Bond girls embossed on frosted glass, a carved roulette wheel, and mahogany fixtures with inlaid marble and granite (and it's not for sale).
But how many attendees will be opening their checkbooks to buy a boat? Hard to say.
Ask me next week, says Ariel Perez, sales manager for Sea Vee Boats in Miami. "Anybody who tells you there hasn't been a slowdown in the industry can't be living in today's world," Perez says. "Everything we build is built to order, and right now we have an eight-month backlog. But we're used to having a year and half of backlog."
Mike Oblosky of Dania Beach-based Intrepid Power Boats, says the market is still strong for high-end boats. "There's been a slight dip in boats of less than $350,000," he says.
Christensen and other superyacht manufacturers, on the other hand, are doing just fine.
And so is the German-born Schoone, who has carved a lucrative niche for himself in the European and Middle Eastern markets.
Schoone, 51, with combed-back blond hair and a yachtsman's squint (though he's not a recreational boater himself), handles phone calls in the dining room of his Coral Ridge home. He's got a client in Germany, hot to take advantage of his strong euros to score an American bargain. Right now, he's got his eye on a 25-footer for which he'll pay $50,000. In cash. You can almost feel the antsiness of the owner's agent on the other end of the line. There's a $1,000 deposit on the boat, he tells Schoone, from a guy in the Ukraine — who hasn't been heard from in several weeks.
Yes, there are bargains, Schoone says. "In a financial crisis, there are better deals."
He just shipped his third boat to Dubai this year, even though that nation's currency is pegged to the dollar not the euro. One of those boats went for $1 million, without the customer even eyeballing his purchase. "It's unbelievable that someone would spend a million dollars like that," Schoone says.
So it goes for Schoone, who advertises in European newspapers but gets a lot of business by word of mouth. "I was talking to a German dentist who said he'd have the price of a boat in my escrow account in less than an hour," he says. "Thirty-five minutes later, there it was. He had his banker in the dentist's chair." Then the banker bought a boat.
In the boat business, as elsewhere, the spoils go to the well-prepared and the in-the-know.