Life on their terms- Baby Boomers Part 2
Posted on 08 January 2009
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Nelson expects diesel-electric will find an enthusiastic following among fuel-conscious offshore anglers, coastal trawler cruisers and even world cruisers. “I think it’s going to come on pretty fast,” he says.
A company’s “environmental story” also is important to a lot of boomers, says True North’s Cressy. True North stresses the efficiency of diesel power and single engines, and touts its SCRIMP resin infusion technology, which minimizes emissions. Pearson recently acquired PDQ Catamarans, a power cat that can cruise at close to 10 knots on less than 4 gallons of diesel an hour. He believes performance efficiency like that is going to turn heads and make sales.
The new face of ownership
Boats from Nordhavn, mJm (a Down East-style power cruiser), Grand Banks and Sabre aren’t cheap, though many boomers can afford them. Boomer millionaires — those with a net worth of $1 million to $10 million — number 8.4 million, or 7.6 percent, of American households. That figure is likely to grow by half again over the next decade, says Lewis Schiff, co-author of “The Middle-Class Millionaire: The Rise of the New Rich and How They Are Changing America.”
“Their demands and needs, their leisure time and activities are as potent a combination as you could imagine if you’re in the boating industry,” says Schiff.
He says as these folks retire or work into their retirement years, they demand flexibility in their use of leisure time. Many are opting for fractional ownership so they can “slice and dice” their time to pursue many leisure activities and get the most out of their investments in second and third homes, yachts and jets. They want it all, so “instead of ownership, it’s subscription,” Schiff says.
“Baby boomers have a whole different mentality,” or at least some do, agrees Loren Simkowitz, founder and president of Monocle Fractional Yachts, a Fort Lauderdale, Fla., firm that manages and sells ownership shares in yachts from 90 to 328 feet (www.monocleyachts.com). Some don’t want to own a yacht outright, not the whole thing. They want to own a piece of the yacht and a lot of other things as well. Simkowitz says these boomers often take multiple vacations as they work well into their 50s and 60s. They go cruising, skiing, to the Med, to the South Pacific. They don’t want the aggravation of managing property. They’d rather pay someone else to do it for them. And instead of spending $500,000 or more on a 50-footer, they’d rather sink that money into a 1/10 share of a 100-footer — fully crewed. A half-million dollars buys four weeks a year on it for five years.
Schiff calls this the “concierge model” of fractionalization. The management company takes care of all ownership responsibilities so the owners can spend time with friends and family instead of on repairs, upkeep and operation. Another model, the “coaching model,” is for owners who see yachting as more than time spent getting away from it all. They see boat ownership as an opportunity to challenge themselves and master a new skill: seamanship. They want to apprentice under a guru who can teach them to be an expert yachtsman.
“Yachts are becoming more sophisticated,” Schiff says. If owners want to know their boats from the keel up, this is one way for them to learn.
With developable waterfront scarcer and costlier than ever, a boater closing on retirement may want to consider buying instead of renting a slip to secure long-term access to it. Slips for sale or long-term lease are becoming more common in some markets. Many of these are in vertical dry stacks that use innovative technology to lift much bigger boats.