The Yacht Insider: Is the Megayacht Market Feeling the Economic Pinch?
What does it mean when two megayacht service companies announce "restructuring" plans within days of one another? Our yacht insider takes a hard look.
March 3, 2008
Churchill Yacht Partners has informed its employees in Newport and Fort Lauderdale that it will no longer have a yacht sales division.
More than a few megayacht builders have orders past 2010. The market doesn't seem even close to feeling the same financial pinch that is hitting builders of boats 50 feet and smaller.
Even so, in the past few days, two megayacht services companies announced major restructuring-moves that could be a coincidental blip, or that could be a sign of the sagging economy touching the megayacht market for the first time.
The first move came late on Friday, February 29, when Merrill-Stevens Yachts-a large, international company-unexpectedly closed its Yacht Services Division in Fort Lauderdale. The company will continue to offer yacht sales, but it will no longer offer megayacht owners the services of yacht management, charter management or crew placement, according to a company official.
One department that official said was spared in the Merrill-Stevens shakeup was retail charter booking, a fact that seemed even more interesting on Monday, March 3-the very next business day-when Churchill Yacht Partners informed its employees in Newport and Fort Lauderdale that, effective immediately, the company would no longer have a yacht sales division. According to a company official, Churchill intends to focus exclusively on growing its fleet of charter yachts and its stable of in-house charter brokers, whose division is known as Rikki Davis Yachts at Churchill Yacht Partners.
Now, Merrill-Stevens and Churchill are not boatbuilders, and Churchill, at just four years old, is one of the smaller players in the megayacht services business. It could be true that these companies closed their divisions simply because they were getting beaten by their competitors.
However, it also could be true that these shakeups are the first sign of a blip in the economics of the megayacht market as a whole.
One way to look at the sudden moves is that Merrill-Stevens and Churchill Yacht Partners see a better financial bet right now in booking charters than in providing services for yacht owners. That may be because these particular companies have more clients who can afford $100,000-a-week vacations than $10-million-a-pop megayachts. But it also could be because looking into the near future, these companies see world economics placing more customers into the former category than the latter.
It will be interesting to see what happens next. I'm staying tuned.
Editor's Note: Kim Kavin is an award-winning writer, editor and photographer who specializes in marine travel. She is the author of five books including Dream Cruises: The Insider's Guide to Private Yacht Vacations, and is editor of the online yacht vacation resource www.CharterWave.com. Kim also edits www.BoatNameGame.com, which invites readers to submit funny, interesting, and bizarre boat names.
