Boomers: Part 1
Posted on 24 November 2008
Coming of Age
With her first Social Security check banked, Kathleen Casey-Kirschling is ready for some extended cruising on First Boomer, the Grand Banks 42 Classic that she and her husband, Patrick, bought 10 years ago as their retirement boat.
Casey-Kirschling, born one second after midnight Jan. 1, 1946, has been heralded as the first of America’s baby boomers, the largest generation in the nation’s history. Born between 1946 and 1964, boomers have been the 900-pound gorilla that keeps shaking things up as their take on life shifts with their stage of life.
From Woodstock and anti-war protests to mutual funds and online shopping, from the Beatles and the Whole Earth Catalog to Victoria’s Secret and SUVs, they keep surprising folks who try to predict where this generation will go based on where it’s been. Boomers number some 76 million Americans between the ages of 44 and 62, and if history is a reliable guide their retirement years will leave an indelible, though not altogether predictable, mark, reshaping the way Americans do retirement, enjoy their leisure — and, of course, go boating.
Futurist and strategist P.J. Wade, of Toronto, doesn’t even like to use the word “retirement” anymore. Retirement suggests a disengagement from life, she says. The National Center for Health Statistics says Americans who reached age 65 in 2004 are expected to live to 83, or 18 years beyond typical retirement age — the length of a second childhood. Wade, who is known as “The Catalyst” and has written several books (www.thecatalyst.com), says the question isn’t, “What are you going to do when you retire?” but “What are you going to do with the rest of your life?”
“If you don’t sit down, if you keep active, if you keep your weight trim and stay strong, you can do almost anything you want to do — forever,” she says. “You just may have to do it a little differently, a little smarter, maybe a little bit lazier.”
She prefers to call this state of affairs “unretirement.” Because they are healthier than their parents, because their life expectancy is longer and because they have more disposable income than any previous generation (an estimated $2 trillion annually), boomers are pioneers in this business of unretirement, Wade says.
That makes Casey-Kirschling the first pioneer. The Kirschlings are busier than ever shuttling back and forth between their home on the Bohemia River on Maryland’s Eastern Shore and a second home in Vero Beach, Fla., on their restored 1979 Grand Banks, which they consider their third home. Patrick Kirschling, 62, a food marketing professor at St. Joseph’s University in Philadelphia, retires in June. Casey-Kirschling retired from teaching a year-and-a-half ago, but she still does a lot of pro bono work — common among retiring boomers.
She volunteered for six weeks with the American Red Cross in Baton Rouge, La., after Hurricane Katrina. She also is an unpaid spokeswoman for the Social Security Administration, doing media interviews and appearing in videos to educate prospective retirees about how and when to apply for Social Security benefits. Casey-Kirschling received her first Social Security check Feb. 12 by direct deposit to her bank. She’d rather not say how much Uncle Sam sent her, but the SSA says today’s benefits average $1,079 a month. The transfer marked a new era for both the SSA (10,000 boomers a day will become eligible for Social Security over the next decade) and for the Kirschlings.
“We’re open to continuing to work flexibly,” either as volunteers or for pay, says Casey-Kirschling. But what they really want to do now is put some hours on First Boomer. The Kirschling’s boating history should cheer up any industry executive who wonders if the mechanisms for bringing people along in boating really work. The Kirschlings owned a 23-foot Wellcraft so they could water-ski in the summer. But the couple always considered skiing the slopes “their sport” until 1991, when they joined three other couples in chartering a Grand Banks in the British Virgin Islands. “It was the best vacation we ever had,” Casey-Kirschling says.
The couple came home, bought a 20-year-old Grand Banks 36, and five years later bought First Boomer, their “unretirement boat” — one big enough to take the grandkids on for extended cruises. They purchased a home on the Bohemia River where they could dock the boat, and though they didn’t have a plan yet for retirement, “We had a direction,” says Patrick Kirschling.
Cruising seemed like something they could enjoy for years — more so than skiing, which had become difficult for Patrick because of a neck injury. They began cruising Chesapeake Bay, and now that they are snowbirds they cruise down to Vero Beach in the fall and back to Maryland in the spring. Once Patrick is retired, they plan to spend winters exploring Florida by boat.
“Living on a boat is a great experience,” Casey-Kirschling says. “It’s such an adventure. … Our boat doesn’t go fast, but that’s great because we don’t need to rush anywhere anymore.” On First Boomer, the pressure is off.
Boomers and their boats
The boating industry is counting on a wave — a tsunami — of retirees like the Kirschlings to descend on the water over the next decade and fuel more demand for boats, current economic woes notwithstanding. Yet more thoughtful observers caution that retirement won’t be a single highway for this trend-setting generation but a lot of byways. Some will retire. Some won’t. Some will semiretire. Still others will retire for a time, then work again or devote themselves to public service.
However boomers decide to spend their “golden years,” their numbers are vast, and there will be winners and losers in the competition for their dollars. The winners will be ones who keep an ear to the ground and stay tuned to what boomers do — and how they do their boating — as they grow older.
“It’s going to be a very competitive environment,” says Dr. Richard Curtin, director of consumer surveys at the University of Michigan and author of a 2004 study on the impact of the “boomer bubble” on future demand for pleasure boats. “When you look at the size of the baby-boom generation and the size of their discretionary income, that really is the big prize that everyone has their eyes on.” Boatbuilders, motor home manufacturers, travel agents, second-home builders — they all want a piece of the boomer retirement dollar.
One of Curtin’s key findings is that older people are into boat ownership more than younger ones — no surprise since they usually have more leisure time and discretionary income. Peak boat ownership years are in the 50s and 60s. That means the average age of boat owners will increase as the wave of boomers enter their 50s and 60s, and that builders will have to get in synch with the needs and expectations of the older buyer. “You either do that and attract an older boater or you give up an important market share [26 percent of the population],” Curtin says. “As people age, they get less able, but that doesn’t change their willingness to boat. It just changes their ability to do it.”
Manufacturers of personal watercraft, ski boats and sportboats — the “fun boats” that attract a younger enthusiast — face tough times for the next 15 years as the population ages, Curtin says. But there will be growth opportunities for builders of higher-end boats and those who keep a less-nimble customer in mind. Curtin says builders can woo older buyers with boats that are easy to use — easy to get into and out of, to walk through without clumsy steps or ladders to maneuver. Graying buyers want designs that incorporate safety, comfort and convenience, and they want to deal with companies that deliver good service, he says. And with waterfront becoming scarce, owners need a nice place to store a boat, too. These are the fundamentals.
Some in the industry already have taken this to heart and have begun positioning themselves for the tsunami. Bob Johnstone, co-founder of J/Boats, of Newport, R.I., one of the great success stories in performance-sailboat building, started a new company, mJm Yachts, to market his latest boat for boomers. It’s not a sailboat but a traditional New England-style powerboat (www.mjmyachts.com).
Johnstone says his 33-year career building and marketing boats has shadowed the changing tastes of the boomer. From his start selling Windsurfers for Hoyle Schweitzer, Johnstone has ridden the boomer wave. A passionate sailor and sailboat marketer, he migrated from Windsurfer to AMF Alcort, where he promoted its Sunfish brand. Then, in 1977, he founded J/Boats with his brother, Rod, and developed a sailboat line ranging from the ubiquitous J/24 racer/daysailer to a 50-foot racer/
cruiser. Johnstone says his designs tracked the boomer progression from small dayboats and raceboats to big family racer/cruisers.
Twelve years ago, Johnstone, who is now 75, and his wife, Mary, 74, an Episcopal vicar, eased out of sail into power and downsized to a Dyer 29. He believes boomers (both powerboaters and sailors) will want to do the same in growing numbers. They’re going to want to buy a smaller, comfortable, stylish, high-end, easy-to-run, easy-to-maintain and — as fuel prices skyrocket — efficient powerboat. That’s mJm’s stock-in-trade. The company — its initials stand for “Mary Johnstone’s Motorboat” — markets a 29-, 34- and 40-footer with an older buyer in mind, one who wants to be able to comfortably single- or double-hand the boat.
“You can explain just about every trend in boating [in recent years] by where these people [the boomers] were in their age cycle,” says Johnstone.
Johnstone offers the two smaller models with a single engine to save on fuel and bow thrusters for easy maneuvering. The 40-footer — due out in November — comes with joystick-controlled, fuel-saving twin Volvo Penta IPS or Cummins MerCruiser Zeus pod drives for “fingertip” control. Some models have a transom door that opens onto the swim platform. Passengers board and debark through 30-inch-wide, wheelchair-accessible, side-opening doors on both sides of the cockpit.
The pilothouse and cockpit are on one level — no steps — and the hull is constructed of a high-tech Kevlar and E-glass composite that lends strength and saves weight, again for fuel efficiency. The cockpit is roomy for socializing and can be enclosed and temperature-controlled. Styling is traditional, and the two-cabin interior is comfortable, with plenty of handrails throughout.
The boats aren’t cheap — $850,000 for the 40-footer and $340,000 for the 29 — but Johnstone says it should be very affordable for someone downsizing from a larger boat.
“If you retire in your mid-50s or 60s, you may want to get a trawler and do some exploring,” Johnstone says. The mJm may come later. “People coming down from bigger boats expect a certain amount of comfort,” he says, and are willing to pay for it. “And they can afford a piece of art. They want a good-looking boat.”
Grady-White Boats, of Greenville, N.C., which builds high-end family/fishing boats, also has been riding the boomer wave and plans to keep riding it into the baby boomers’ retirement years, says Joey Weller, the company’s vice president of marketing and sales (www.gradywhite.com). Weller says Grady keeps tucked into the wave’s curl by listening and finding more ways to listen to its customers.
Winner of J.D. Power and Associates’ customer satisfaction awards in coastal fishing boats for six of the last seven years, Grady responds to what its customers tell the company. When middle-age boomers in the 1990s asked for more “creature features” on its fishing machines — a more comfortable cabin and seating — Grady delivered a more comfortable, more “family-friendly” boat. Now it offers an express model that is tricked out for fishing but also has three berths, a 96-square-foot cockpit, and plush surround-seating at the helm, with a folding table and two seats to starboard. It’s a more sociable boat and more accessible and manageable with a transom door, bow-thruster and hydraulic power-assist steering.
Weller says Gradys also have other basic features attractive to an aging buyer — a soft-riding C. Raymond Hunt-designed hull, low maintenance and high resale value. It’s a boat “you can pass down to the kids,” he says.
Some work, some play
When boomers will be ready to buy their unretirement boats is the big question. Patterns of retirement are changing. Baby boomers expect to work longer than their parents, suggesting a reversal of the century-long trend toward earlier retirement, according to the University of Michigan Health and Retirement Study done every two years. Compared to 1992, a substantially larger proportion of people (around 40 percent) in their early to mid-50s who were surveyed in 2004 expected to work full time after age 65. That expectation of a later retirement may be even greater now with business activity slow and stock prices low.
“If we go back 10 years ago, when everyone thought the financial boom times were never going to end, people were going to be retired by 55,” says Bentley Collins, vice president of marketing and sales for Sabre Yachts, the South Casco, Maine, builder of high-end sailing and Down East-style power yachts (www.sabreyachts.com). Many did retire, and that was good for Sabre’s business. “But people are in a bit of a holding pattern right now,” Collins says.
Many who had hoped to be retired by now aren’t. And after looking at their stock portfolios and anticipating $5-a-gallon fuel, they may be downsizing their dream boat, as well, Collins says. A buyer who was eyeing a $350,000 Sabre 34 might now be looking at a $265,000 Back Cove 33, a less-expensive power cruiser built by a sister company (www.backcoveyachts.com). Powered by one 380-hp Yanmar diesel, the 33 gets almost 5 miles per gallon at 8.5 knots and might be a little easier to swing on a retirement budget.
Not all who plan to work longer will do it because they have to. Many successful businessmen and high-end professionals buy their Grand Banks yachts at age 50 or 55 so they can begin “throttling back” at work and enjoy their families and grandchildren on board, says David Hensel, the builder’s marketing director. But that doesn’t mean they are ready to quit working anytime soon.
“Retirement age isn’t 65 anymore,” Hensel says. “Baby boomers aren’t slowing down yet.” They don’t want to. That means many are running their businesses or offices from their yachts as they cruise, which is feasible now with satellite and cellular communications and WiFi Internet access.
If an owner still is working or is semiretired, that likely will influence his or her choice of power options. Hensel says a Grand Banks with larger engines and a semidisplacement or modified-vee hull makes good time and good sense for an owner who has to get back to the office. He says these “trawler-type” yachts offer flexibility to customers who “still have ties to their work or business and have some time constraints.” They also are attractive to retirees who look forward to cruising with their children and grandchildren and must keep to a schedule to get family home on time. So-called fast trawlers can zoom yet still deliver reasonable fuel-efficiency at slower speeds, Hensel says.
Like mJm, Grand Banks is introducing a new model this summer, the 41 Heritage EU, with joystick and Cummins MerCruiser Zeus pod drives (www.grandbanks.com). “The joystick gives you pinpoint control and station-keeping ability,” Hensel says. “A wife can take over this boat and drive it, it’s such an intuitive system to use.”
Boomers are open to new technology, says Sabre’s Collins. Starting with radio, growing up with television, learning to use computers, messing with iPods and Blackberries now, boomers are willing to embrace change. “Technology is selling,” Collins says. “I’m a marketing professional. I’ve found that if you give them technology, they’re willing to try it. You can make boating more accessible to more people through technology.”
Whether it’s joysticks, pod drives, electronic charts, VHF digital selective calling, collision avoidance technology (AIS), WiFi, e-mail or the Internet, the technology makes boating easier and more convenient, and enables boaters to keep in touch with family and business. Boomers love it. They use it. Many can afford it.
The journey into high technology is far from over. Like self-parking cars, sooner or later we’ll see boats that dock themselves. Manufacturers are working on it. n
Future in Flux
Green marketing, recycling
Energy-efficient lights, environmentally friendly bottom paint, more fuel-efficient propulsion, and lighter, stiffer hulls are just a few indicators that point to boating’s new color. Marinas, boatyards, manufacturers, retailers and service providers all are spending top dollar to affix a “green” label to their goods and services. What used to be considered a personal virtue is now a vital part of the boating business, which relies on clean water and air like many other leisure industries.
But going green doesn’t necessarily require giant leaps; it can happen in a series of small steps. Products that help reduce the carbon footprint of boaters include solar panels, wind generators, energy-efficient LEDs, biodegradable cleaning products, electric outboards, copper-free antifouling (Interlux Pacifica, Pettit Vivid Free) and long-lasting tools that stay out of the landfill. Festool, for example, makes high-end electric tools that are cherished by craftsmen for their longevity and the green shadow they cast, because fewer replacements mean less waste.
Boats have always needed yards that launch, haul and service them. The difference now? In a service economy, where people tend to have more money than time, do-it-yourself is going out of style, so more boat owners pay professionals to tend to their toys. With boats becoming bigger and more complex, that’s often the only choice. But boatyards are changing, too, becoming bigger and vertically integrated so they can offer more specialized services. Prices are on the increase ($50 to $100 per hour, depending on the job) because the cost of doing business is going up. Tighter environmental regulations require clean sanding, air filtration and complex management of a yard’s waste streams, from paint chips to engine oil to storm runoff.
Other challenges for boatyards include higher taxes and zoning laws that favor residential and resort-type waterfront developments. As a result, consolidation is taking place. Smaller operations sell out to bigger ones or to developers, because they are short on capital to make necessary improvements or can’t grow their businesses to remain competitive. Last but not least, boatyard managers are grappling with personnel shortages, trying to find, educate and retain quality workers and prevent them from getting lured away by better-paying jobs. The evolution of the boatyard from a predominantly small mom-and-pop business to a large, sophisticated, full-service operation is expected to continue.
More power, more options
The demand shock that has pushed prices at the fuel dock to record levels — and tighter environmental regulations — has brought about more efficient engines, such as direct-injection 2-stroke outboards and 4-strokes that are cleaner, more powerful and more reliable than the old carbureted 2-strokes. Common rail diesels with sophisticated electronics that allow engines to operate at lower loads are cost-effective solutions available now. Supposedly “sexier” concepts like diesel-electric hybrids, battery power and fuel-cell
systems are still being developed to make them more
appealing and affordable for mainstream use. Diesel power also could show up in outboards if the technology finds enough backing from commercial builders.
But fuel efficiency is only one aspect of innovation. The others are convenience and performance. New pod drive systems like Cummins MerCruiser’s Zeus and Volvo Penta’s IPS boost performance and maneuverability and are rapidly gaining acceptance with builders and consumers alike. Another game-changing innovation is MerCruiser’s Axius system, which uses sophisticated hydraulic and electronic technology to control independently articulating sterndrives for simple, intuitive joystick docking and maneuvering. In this segment of the market, the future is now.
The best way to insulate your wallet from high fuel bills is to burn less of it. That doesn’t mean all boaters will become kayakers, but those who continue to rely on some sort of internal combustion now must understand new types of fuel. Biodiesel, a cleaner-burning brethren to the crude oil derivative, does the trick for some, but it is difficult to come by, except for rapeseed and soybean farmers or owners of restaurants that produce cooking grease, which can be used as a source.
The fuel additive MTBE, a known carcinogen, was found to contaminate ground water, so it’s been replaced by ethanol. While that seems to work fine in cars, ethanol does not agree with older boats and their fiberglass gas tanks, which can deteriorate when exposed to the additive, leading to clogged fuel lines, mucked-up engines and leaky tanks. Perhaps of greater concern is phase separation, which occurs when ethanol absorbs water and drops out of the fuel, causing a layer of sludge and/or water to form at the bottom of the fuel tank. This mixture can get sucked into fuel lines and cause engine problems. The solution for now: monitor your fuel system closely, carry spare filters and use a quality fuel/water separator. The fuel story isn’t over yet.
Made in China
Many manufacturers of luxury goods have followed the trail of cheap labor to China, hoping to preserve both profits and product quality. Boats are no different. Megayachts, trawlers, sailboats, runabouts and rigid bottom inflatables already are manufactured there. While the marine industry is waiting for China to become a consumer market (with a boost from this summer’s Olympic sailing events in Qingdao), the fact is it remains a place where boats are being built for export. Prominent companies like Nordhavn, Marlow Yachts and Mercury have opened manufacturing facilities in China, and many others are following, lured by the low cost of labor and materials.
But despite China’s sustained double-digit economic growth over the last decade and the acceptance of boats that are built there, it is not all smooth sailing. Pollution, rising energy costs, inflation, toy recalls because of lead content and a government that is quick to crack down on political dissent while tolerating questionable labor practices have all dealt setbacks to the “Made in China” label. In many ways, China remains an enigma, a place where anything’s possible but nothing is a sure bet.
Lighter, faster, safer
Boats are better than they were five, 10 or 20 years ago because of modern design technologies that include tank testing, velocity prediction programs and finite element analysis. They have benefited from better materials, ranging from resins to fabrics to cores, as well as modern building techniques, such as resin infusion and vacuum-bagging or closed-mold lamination. That means the customer is a winner in more ways than one: lighter, stronger boats that are faster, safer and more fuel-efficient. That trend should continue.
There are many different ways to build boats, and no technology is the killer application. One-offs or custom-built boats might be perfect candidates for traditional building materials, such as wood, or space-age stuff, such as preimpregnated carbon composites that have to be baked in an autoclave. What’s best depends on purpose and budget. Traditional open-mold construction with hand-laid fiberglass is still going strong for many production boats, while small and robust dinghies are increasingly made from rotomolded or thermoformed plastic.
While boat and engine quality will continue to improve with advancements in materials, engineering and building techniques, it is incumbent on the consumer to buy from a reputable builder that understands the advantages and limitations of the materials and the construction methods employed.
After a couple relatively quiet years, it is easy to forget 2004 and 2005, when seven named hurricanes ripped across Florida and Katrina made landfall near New Orleans. But make no mistake: We are only a dozen years or so into a 25- to 40-year cycle of increased hurricane activity. This means the recreational boating industry should brace for more years of hurricane-related damages, which in 2005 alone added up to approximately $1 billion.
One countermeasure is retrofitting older marinas to withstand winds of 140 mph or more with extra-robust dry stack buildings, wave attenuators, breakwaters and dock pilings that can handle large surges. However, boaters already are paying bumped-up boat insurance rates in the hurricane belt because of increased storm activity, and now they face the prospect of higher slip fees and club membership dues to help pay for marina improvements. Alternatively, they could store their boats in safer inland locations, trading the convenience of quick ocean access for a higher safety margin. Bottom line: there’s no substitute for preparation, prudence and vigilance on the part of boat owners living in active storm zones.
Going — and staying — green
Pump it, don’t dump it. The designation of large areas as no-discharge zones requires boaters to do their share to keep the water clean while they brace for the (proposed) construction of controversial liquefied natural gas terminals on Long Island Sound, Narragansett Bay and near the mouth of the Columbia River in Oregon. If built, these facilities would impose safety corridors on recreational boating traffic on top of the existing security zones already in place around Navy vessels and military or commercial installations on shore. No less controversial is the proposed Cape Wind project that calls for 130 turbine towers — each 417 feet tall — to be installed in a 24-square-mile area on Nantucket Sound, where recreational boat traffic would face restrictions.
In places that are shared by boaters and endangered marine mammals, authorities issued speed limits and rerouted shipping lanes to reduce the risk of boat strikes on manatees and migrating whales. A different calamity is the collapse of the salmon stock on the West Coast, which might force the cancellation of the 2008 salmon season from Mexico to the northern border of Oregon, impacting not only commercial fishing but the boating habits of recreational anglers. Expect more resource conflicts in the coming years in both coastal and offshore waters.
Using more recycled, renewable and energy-conserving building techniques and adding amenities are two big changes sweeping through the marina business. In an effort to generate more revenue, marinas leave behind the image of boat parking lots by embracing the concept of “green” and the cachet of resorts with hotels, yacht clubs, restaurants, pools, bars, shops, spas and condos that include a boat dock (aka dockominiums).
Another way to make marinas more attractive is integration with a working waterfront, which has been successful at Pier 39 in San Francisco, Victoria & Alfred Waterfront in Cape Town, South Africa, and many other places around the world. The caveat: Slips for Joe Q. Boater, who only wants to dock a center console, are becoming scarce. Hence, more owners are keeping their smaller boats on a trailer, which they park at the curb or under the apple tree in their back yards.
Other options are dry-storage lots or putting the vessel in a dry stack, which is becoming popular in crowded areas like South Florida. Some boaters bite the bullet and rent a larger and more expensive slip, while others hold out hope that marinas will offer more swing-mooring pontoons that can accommodate more small boats.
Finding a way to the water
While the number of vessels in top boating states like Florida, Michigan and California is expected to grow, the number of places to launch or dock them is not. Marinas lose slips to more lucrative residential developments. Public launch ramps that fall into disrepair are rendered dangerous, even useless. Parking is tight at popular launch ramps, especially during peak boating times and on long weekends. While state and federal grants for the improvement of boating infrastructure are available, they often come with strings attached, such as being limited to facilities for transient, non-trailer recreational vessels.
Supporters are developing a multitiered approach to ensure water access. They’re educating the public and government officials about the importance of no-loss policies, strengthening the Coastal Zone Management Act, supporting the proposed Working Waterfront Preservation Act of 2007, asking the Army Corps of Engineers to consider recreational boating needs for dredging projects, creating tax breaks and other economic incentives for water-dependent businesses and land acquisition programs, and taking clean marina programs national.
A bright spot: the federal Wallop-Breaux fund provides about $500 million a year in federal motorboat fuel taxes to such projects as sportfish restoration and boating access.
Organizations such as the National Marine Manufacturers Association and the American Sportfishing Association and companies such as Brunswick are actively cooperating with municipalities, state governments and marina owners to help preserve or expand boating access. This is one issue that is not going away. n
Best of Both Worlds
Boating is down because there are too many ups: gas prices, slip fees, yard bills, insurance rates.
“Enough already” is the motto of the optimists, who believe boating could grow at a healthy clip if only the associated costs could be shared and the hassles outsourced. Go when you want, where you want. Spend a joyful day on the water, get back, tie up and walk away. Let someone else take care of the chores. Welcome to fractional yachting.
Different companies offer different variations of the concept. Some provide members with varying levels of access to a vessel in a location of their choice. Others might operate on a franchise basis. Either they own boats and rent them out to program members, or they sell boats and lease them back from private owners and add shareholders who pay an annual fee for guaranteed usage but without the ownership option.
A third variation caters to people who want to own a boat, just not all of it. An example of this is Beneteau Fractional Yachting, which was launched last fall. Four individuals buy a Beneteau sailing or power yacht outright to share. Scheduling is handled on a dedicated Web site, and a concierge service handles maintenance and repairs through authorized dealers. Service charges are billed to the owners’ credit cards and can be audited online. Even the application for financing can be filed on the Internet.
“Fractional boating opens the possibility for boat ownership to a much broader demographic,” says Grant Headifen, who co-founded SailTime and now contracts with Beneteau to run its fractional program through his company, Nautic 7. “There are potentially many more people who would embrace boating if they can get in with a 25-percent stake instead of becoming full owners.”
Beneteau promotes fractional yachting as a way of easing into boating for newcomers who like the sport but might not be fully aware of the responsibilities. Headifen is banking on the Internet and modern communications technology to make fractional work. Before leaving the dock, the skipper must complete an online checklist and send it back to Nautic 7 via on-board PDA, indicating the condition of the boat. If someone constantly leaves behind a mess or returns the boat dinged up, the next operator will report it.
“By signing the owners’ contract, you agree to pay a fine for repeated violations, and that money goes into the boat’s kitty,” Headifen says. “Skippers who cause damage pay the insurance deductible. But generally, people are careful because they know that we know what’s going on with the boat.”
Nautic 7 also offers online sailing courses for skippers and crewmembers at www.nauticed .org. They cost $99 and $59, respectively, and are mandatory for participants in the program. The practical test on the water is taken in the presence of a Coast Guard-licensed captain, according to Headifen.
Boston-based Barton & Gray started out by offering fractional ownership of Hinckley Picnic Boats in Nantucket, Mass., but has switched to the club philosophy. Membership in the Mariner’s Club includes access to boats in Nantucket, Newport, R.I., Greenwich, Conn., and Naples and Palm Beach Fla. “At the $15,000 Ensign level, our Mariner’s Card is good for eight trips in any location,” says Tim Barton, the company president. “Fractional ownership takes a multiyear commitment, while club membership is for one year. It’s more flexible, which is what our customers like.”
At Etap Charter Lease, based in Stamford, Conn., seven shareholders pay a flat annual fee (around $6,500) to use a privately owned Etap 37 for two weeks in one season. “It is a compelling model for owners who don’t use their boat full time and for individuals who don’t need or want ownership,” says Ludwig Hoogstoel of Etap USA, who runs the program. A calculation on the company Web site shows a cost of $429 per day to sail an Etap 37 as a shareholder versus $2,245 for the same boat if it is owned outright by a single individual, assuming 6 percent interest on a 20-year loan.
“Our focus is on membership, not necessarily on ownership,” says Paula Nelson, who owns the SailTime franchise in Annapolis, Md. Founded in 2001, SailTime has approximately 1,000 members and operates 140 boats in the United States, United Kingdom, France, The Netherlands, Canada and Puerto Rico. Members receive a guaranteed usage of seven times a month, and prices depend on location and vessel size. A Hunter 45 DS, for example, docked in Annapolis costs around $12,000 per member per year. SailTime also offers powerboats.
Ian Treiback of WindPath in Stamford, Conn., oversees 30 boats (12 under private ownership) in 13 U.S. locations and 200 members who get to use Catalina sailing yachts and Back Cove powerboats. “We feel that our selection balances the popular with the slightly more exclusive tastes,” says Treiback, who points out the importance of simple and reliable equipment that performs well. WindPath charges a one-time fee for training and initiation, and a monthly or annual fee for boat usage. Prices depend on vessel size.
“People today have many competing interests and fractional boating accommodates this lifestyle,” says Nelson. “You go boating when you want, hassle-free. You won’t feel guilty about not using your boat enough or using too often, thus neglecting other commitments.”
Barton thinks that the time for fractional yachting has arrived. “Fractional ownership has come a long way, but now it is absolutely accepted for big-ticket items,” he says. “It’s happened with luxury vacation homes and it’s happened with jets. I see no reason why it shouldn’t work for yachting.”