Hurricane Irma’s impact on the yacht market.. with Gary Fretz
HTML-код
- Опубликовано: 20 сен 2017
- This year's hurricane season has been particularly rough in many aspects. One of which being the yacht market. A large percentage of boat in the Caribbean have been damaged and this will have an affect of the market for years for both new and used boats. In this video we chat with boat buying and selling expert Gary Fretz.
For questions feel free to email Gary at bigyachts@gmail.com
Support us on Patreon?!: bit.ly/jandr-patreon
Get a t-shirt(or 3!): bit.ly/HonuBrandTeeSpring
Free floorplan tool: bit.ly/floorplantool
Our Instagram: @jessicaandryanadventures
Arya's Instagram: @arya.samoyed
Our facebook page: / jessicaandryanadventures
Feel free to send us any questions to:
jessicaandryanadventures@gmail.com
When you asked about how long this shortage of boats might be, the other sad unknown factor is how horrific future hurricanes might be.
Ryan your channel gives the best analysis on all things sailing. Looking forward to watching your journey to boat ownership. Real curious to what you'll end up with.
Super insightful Ryan, many thanks for organising it and sharing.
Interesting video.
I lost my boat in a 1992 hurricane outside Norway... since then I have been living on land. I wish all you sailors better times than I got.
Plenty up here in the Chesapeake and in 2 weeks we have the worlds largest Sailboat Show at the worlds capital of sailing, Annapolis.
Good luck!
The largest show in the U.S. anyway. A small fraction of the size of Genoa, Dusseldorf (biggest), Paris, Cannes etc. (Yes, I have been to all these shows, most multiple times.)
Thanks for the interview, Ryan. Very informative!
Ryan,
Great video. Very informative. Gary is one of those guys that sneezes away more knowledge than most will never learn.
Another informative video from these guys. A must see
Gary fails to recognize that the bare-boat market was already over-saturated with 4 by 4 charter cats from 40 to 50 feet. As we manage the sale of a hundred used cats around the world annually with 15 brokers we have a nice idea of the market composition. Anyways, the owners who are getting their insurance checks will actually benefit on these 4 by 4's as these are the least sought after catamarans on the after market. Many of them will not order a new boat either. Some will. Further, a charter boat is not of much value if it does not have charter guests on it, and I think it will be a long slow road back for both BVI and USVI and St. Martin before charter demand gets anywhere close to what it was before the storms hit. Tortola in particular was not a place with a lot of cruisers, it had a lot of bare-boats and big luxury cats, but many go to Grenada for the hurricane season, so we saw a smaller loss of those types of cats - the owner version, cruise kitted cats that private owners want. That said, St. Martin had a lot more of them than Tortola proportionately. What we also lost on both islands were a lot of the really premier 55 foot plus luxury crewed charter cats. In Village Cay alone, five or six of the really big cats were sunk or flipped. Nanny Cay had Catsy, the Sunreef 62, sitting on the road, and a dear client of ours lost his Lagoon 560. So the issue is this: there are now a lot fewer luxury cats to charter, but how many people are going to cancel their charters in BVI and St. Martin? I fear many. It is going to take a long time, several years, for St. Martin and BVI to get back to the same number of charters as they had last year. Sadly for us at The Multihull Company, both of our agents on Tortola and St. Martin lost their homes, their lives have been devastated by this, along with many others. I do not think these losses will have much impact at all on the voyaging cat market, or the performance cat market, other than perhaps making these boats a bit better value compared to what were always much lower priced, lower quality, production cats. The gap in price between the production cat and the performance will grow a bit smaller as production builders raise their prices. In reality, the largest factor impacting pricing for Americans in the cat market was the rise of the Euro over the past several months. Cat prices were already clipping up in dollar terms over the dollars slide as the Euro drives the bulk of the cat market. As for the salvage boats, as they say in Private Equity, any idiot can buy, you only deserve congratulations when you sell. I think many will miscalculate two things: the true cost of repairing a given boat, and the true value of that boat when it goes up for sale as a salvage yacht down the road. Salvage yachts, salvage cars, there are always buyers! Just be careful here, I agree with Gary on this 100 percent. I also agree with him that there are still a lot of cats in Europe for sale, and this is keeping our agents in Spain, France, and Croatia quite busy now. It is a minefield dealing with European sellers and the total lack of professionalism we see in brokering their, but if one is prepared to suffer through it there are some options.
Great info,thanks for making this video.
Good information that I hadn't thought of. Thank you.
Great video Ryan. Very informative and made us very grateful we bought when we did! And that she survived Irma. Y'all are going to find the perfect boat. Don't give up. And until then you can come sailing with us! Would make a great episode for us both...
Thank you for this video
It's not really good news, but that's really not a surprise. That said, don't give up on your dreams. There are definitely still options, you just might have to be a little more resourceful and/or patient than you would've before the storms. :/
I actually see an opportunity here. Buy a boat in the Med, sail that to the US. You'd be able to sell it for a lot more, then you buy another bigger and better in EU again.
curious how this all stacks up in the COVID era. geared up for less demand now?
Another great conversation with Gary. I'm not looking to buy a boat right now, but these talks are always informative and I have now doubt they will help me in the future. Thanks!!
Great imformative video, thanks
Great Deep insight. Thanks
I've been looking forward to this one... bring it on!!!! 😎
We are supposed to charter out of Puerto Rico in December. Our boat hasn't arrived but this will get interesting after Maria. Hope you guys are doing well.
A critical point to remember that wasn't covered is, what was the condition of the boat before the storm. Repairing obvious damage is one thing. Not knowing what was wrong previously might get overlooked.
I bought a boat in July in St Thomas (after seeing your previous interview with this guy--don't worry, nobody could have planned for TWO category 5 hurricanes). It SURVIVED, with only minor superficial damage. So... I guess now I sell it to someone who lost their boat since there's not really any way for me to get the work done on the boat now that I needed to do before cruising.
I was in process of sale two weeks before the Irma. What year or model, is it a cat :)
1984 35' cutter/sloop (removable inner forestay). Not a catamaran ;) Not a particularly expensive boat, either.
Great interview on the supply side of the equation.
One additional aspect I would like to see investigated, is the effect these storms have on demand. I would imagine some are taking their proceeds and not buying another boat. Further, I would believe that some prospective buyers are now soured on the idea of ownership given these storms, resulting in (probable) increased insurance costs and temporary elimination of this charter hub.
Thoughts?
good information
I was just thinking this morning what Gary would say about the boat market.
Gary, your a Gem.
Wow! The number of vessels lost, if true (and no reason to believe it's not) is staggering. It will be interesting to see what impact this has on boat sales and charters during the Annapolis boat show.
Hi Ryan...THAN YOU for bringing this together. I was wondering if one of the sailing channels would do this. AND...you're the perfect guy for this. My one question would be...how does one know if a boat has been submerged when buying something a year from now? Like, is there a car fax for boats. PEACE OUT!
Thank you!
Judging by the photos posted on Twitter I think chartering companies could have been more careful during their preparations in Paraquita Bay, BVI. Yes may be the impact would not have majorly changed for Irma destruction, but is it really a good practice to leave lazy bags and booms attached before a category 5 hurricane or before any hurricane season. Just from this minor indication it raises the question whether if other safety measures were fully followed before any hurricane season.
This gentleman knows his stuff. What a shame as sailing has hit an all time level of popularity. Great interview.
I believe a significant point is missing here, the charter business is going to be negatively effected for sometime until the island infastructure can support it along with major environmental damage. Also is their now a fear factor from and by boat owners that will effect investment or retainment of what's survived. There are a lot of intangibles that will ultimately effect resale prices.
Agreed 100% David Campbell! Supply definitely was reduced, but a series of "once in a lifetime" hurricanes destroying everything for hundreds of miles will likely have a chilling effect on demand too. Not everyone HAS to buy a boat -- many think it would be an interesting investment that could be enjoyed, until they see complete losses in those investments and in lives from uncontrollable forces of nature. Sailing vessels become a little less desirable to some first time buyers after something like what we've seen over the past couple of months.
Thanks, this was good input. If a boat has been damaged by a hurricane then fixed, does the seller have to disclose this information?
Now is the time to locate the Marine salvage yards in those areas! More than likely lots of useful parts to filter through. > Ryan, can you ask Gary about good salvage yards in those areas affected?
Another great interview Ryan. I was wondering about the market for boat parts for boats that were totaled, parts that would be sold at a boating consignment shop. Much like a car junk yard.
All good advice, but if I lived in one of these places and had been pining for a 40' Bluewater sailboat, now would be the time. Some 'wrecks' will be too small or remote to bother moving to a larger market. A clean title is what you're buying.
Fantastic insights Gary. Ryan - Thanks for sharing! We have a 5 month old 46ft Nautitech cat in the water at Nanny Cay that is still floating with mast and boom intact. Waiting on detailed survey results, but we are hearing it might be reparable. Our big question is how do all the reparable yachts get repaired with the infrastructure knocked out from St. Martin all the way to San Juan. Would love to get insights on how/where to get work done on yachts in the Caribbean. Do you fly crews in or transport yachts out? Seems like the waiting list for parts and work could be a very long time.
Ryan, thanks for getting Gary to talk about this issue! Gary, if you are reading this, I am wondering about your thoughts on the impact on NEW charter boat prices. The charter market is often pretty balanced in terms of the number of new owners wanting to buy boats for charter and the number of charter boats that need replacing. Now you may have a big unbalance because charter companies need to replace their entire fleets but many of the previous owners may not come back to the industry even if they got their insurance checks. So the need for new charter owners may exceed the number of new charter owners willing to buy. Since charter companies are their own brokers, I wonder if they will start giving some attractive offers by reducing their commissions. Is this just wishful thinking or may there be some truth to this?
buyer be ware for the next 2 to 3 years as there will be a lot of 2nd hand come onto the market with potential down the line issues as the saltwater takes its toll over time
After being involved in a couple of rebuilding projects all I can say is you'd better enjoy the work. It happens that I do. I good boat properly rebuilt can deliver a lot of satisfaction. Not sure the ROI will be impressive!
Hi very interesting thanks , what is the insurance situation for charter companies? I would be surprised if they had replacement cost insurance on their boats. Cheers Warren
Until the infrastructure is repaired/replaced and the aesthetically pleasing environment returns will there be a sailing community in this area? It's going to take time for the money, manpower and materials to arrive before the work can even begin. Honestly many of the hurricane stricken islands are struggling to support life for their citizens and as we've witnessed many are fleeing.
The second thing that comes to mind my mind; is this the new normal and are we witnessing what's in store in the coming hurricane seasons?
Glad I stumbled across this video. Thank you for your opinion and insight. It really made me think beyond the obvious.
I figured the prices would go up because of this. Good to hear it from an experienced broker. Luckily for Janice and I we are thinking of buying in 5-6 years so we have some time to (hopefully) see some deals again in used Cats. I feel bad for you guys though. I think you were in the market to buy fairly soon? The timing sucks! Sorry.
There is one more piece of the pie to look at. There is about to be a real glut of damaged boats on the market too. Tons of boats damaged by Irma.
I get the feeling he was talking mainly about the top 3 selling brands, Leopard, Lagoon and FP which are the most popular charter cats as well. I wonder how the storm will affect the sales of other brands of catamarans as well as custom and one offs. Yes there are other catamarans out there besides the top 3, and imho quite a few that are designed and built better.
A J agreed. There are plenty of cats that arent built for charter and consequently are better sailing and live aboard vessels. Outremer, mcconaghy etc
So to recap: Tortola and St. Maarten which comprise 70% and 15% respectively of the world charter market suffered complete devastation. Moorings/Sunsail lost 50-70% of their boats. Dream Yacht Charters lost 90 of their 91 boats. TMM Yacht Charters lost all 40 of their boats.
I have to ask this question: Why didn't the charter companies take better care of their fleets and move them south out of the path and danger zone of Irma before it hit? It's not like Irma was a surprise. It was tracked since forming off Cape Verde and models showed the most probable paths of travel a week before it made landfall.
Because they already paid insurance and insure for replacement value so really cheap way to make fleet brand new
Yes, I suppose. But in the meantime, they lost most of their revenue stream for the next couple of years as well as the ability to sell off their older boats onto the used market.
David B I asked the same question. I don't get it. Maybe they wanted the insurance companies to buy them new boats. Stranger things have happened when it comes to insurance claims. Ö PEACE OUT
Plus the charter companies could have an insurance option called business interruption where they get reimbursed for the days, weeks or months they cant do business cause of the storm.
I thought about that too Mike. Business Interruption Insurance in the event of a natural disaster. However I would have thought the insurance underwriters would have some sort of indemnity clause stating if the disaster could have been avoided (as in moving out of the way of a major storm) then they would not be held liable for said damages.
I would love to know how the boats on the hard made out.
Ryan... please consider an update to this video. It's 2019 and we're interested to know how the market is doing. THANKS!
You forgot to mention that insurance fees almost doubled post Irma. If you paid $7,000 last year you will be paying $10,000 post Irma.
Hi Ryan, just wondering if people will still charter for these islands or will refrain fm going there. What do you think it´s a timeframe for yacht tourism to return to these areas? Do you think they will wait for reconstruction?
Good discussion, but I wonder how many potential buyers were turned off from buying because of Irma, and if that will offset any of the price increases from loss of stock?
Pearadise Vlogs - I agree with you 100%! I can certainly see many young couples and new retirees reconsidering the purchase of a boat and changing their minds about living aboard after this continuous string of hurricanes smashed everything for hundreds of miles. Salespeople always look only at the side of the equation that helps their narrative. I was told by many realtors in Southern California in 2006 to "hurry and buy a home before you're priced out of the market!", a market which completely collapsed 12-18 months later. The supply of boats in the region has undoubtedly been reduced, but the demand may also be equally or even more greatly reduced than the supply.
Although bad news for buyers, I'm curious is this will be good for the boat building industry.
Well its now almost 2yrs since irma and other storms and 10months since your last update, what is the market like now?
Wonder what happens to the quality of new boats that will be produced to fill the demand? I would wager on lower quality boats produced following a catastrophe like this. Manufacturers will cut some corners to meet their contract demands yet demand higher prices.
My other question re new boats is this: With this huge increase in demand caused by the major charter folks needing to refill their inventory, will the builders, even the most reputable ones, try to ramp up production, hire people who aren't as skilled, rush processes that should be taken slowly and carefully--in other words, will quality of new boats suffer from over-demand and the attempt to meet it?
Next, interview an insurance agent and see had bad they project they'll raise everyone's rates :(
Agreed the insurance variable could increase so much in the hurricane zone that it impacts owners and buyers just as dramatically. 3 huge hurricanes in a month... when insurance rates were 1.5-2 percent of value or equal to 1 event in 50-66years? Not anymore I would guess.
If you'd like to interview an insurance agent. Contact me. My firm owns a marine specialty Insurance Firm. 850.454.89five1.
After Sandy, there were a lot of salvaged boats that went for some lesser prices...not so, now?
So when are you buying a boat? I know you want a catamaran, but why get a Catalina 30 for cheap and sail cheap for two years then upgrade. My biggest regret is not having started sailing trips sooner. We ended up with a 27 foot Catalac Catamaran that is great for us and cheap to own.
Pricing increase must referring to the US market, not the global market
Gary has such a cool accent.
Buy from the UK good deals to be had right now
I'm curious if, overall, theft (not so much whole boat theft, but really boarding and theft of components) might increase due to low inventory.
Bad news for insurance companies, good news for charters and manufacturers companies (As usual in this area).
I wonder if this will jack the entire used boat, even 10-12 or sub 20 year old monohulls?
Do you think this will affect up here in New England?
What happens if there is another hurricane event next year?
Hi guys, a little off topic but still Irma bvi related. I live in tortola, and have been running charters for close to 3 years. I was lucky on antigua at the time, and now back in the uk, anyway, originally we were booked to do the USVI boat show in early November. Most of our friends owners have said no way, and moved elsewhere. My yacht management company are pushing for us to do it, the brokers are pushing to do it. I just wanted your opinion on the matter, I know the area needs the tourist dollar, but as the way I and many of our friends see it, as just far too soon, and far too inconsiderate to demonstrate luxury in front of people who have lost everything. What should I do? Many thanks and keep up the videos.
Been following for a while. Have you guys bought a boat yet?
I'd love to be able to buy a salvageable boat. If I lived closer to the Gulf. But living in the dfw area it would be to awkward. I have the know how to do a bunch of the work myself. If not all the work. But then you have to have some place to store the boat while working on it. Because I still have to work around the country, there might be a problem with the time restraint. The good Lord knows that it would cost to much to truck a boat all the way up here too. Some day! Some day! I'll have my catamaran, I know I will!
Hi,
I’m a novice sailor, I only have 1 time experience aboard a catamaran, and that was the Outremer 45 lat week. I ‘m shopping for a Catamaran and believe the interior of the Bali 4.5 is more suitable for us. I just need to understand how much different will the Bali performance be versus the Outremere 45. From last week experience, I was lucky to witness winds varying from 37 knots to 0. My observation was that we reached 18-20 kts surfing down a wave, however other than that we were most of the time at 40%-50% of the TWS depending of the AWA.
I know that speed depends on many variables, I just want to know when the Outremer will sail for instance at 9 knots, how fast will the Bali sail in the same exact condition. Also, if in certain conditions the Outremer will sail close to wind at 35 AWA, how close the Bali can sail in the same conditions.
Again, I know these are questions that are difficult to accurately answer, just please try to give me a perspective on how they will be different.
Regards,
Karim El Hamawy.
Wharram Cats go together pretty quickly.
New boats are in under garuntee thought so they should replace them for free
Prices up? Half that had boats will decide a boat isn't worth it. Half of potential buyers will think "I'll pass." Just my thoughts.
I'd be very concerned that the factories ramping up of production will create more and/or worse quality issues (ref: Harley Davidson under AMF control). ;-(
I was quoted $6-8K dollars and I ended up being charged $21K that includes yard fees etc...
I am looking for a boat can you recommend a broker in orlando I am going there to start looking next week
I have mixed feelings on this price increase. First of all who would want to sail in this region after such devistation accept to maybe assist in the rebuild. you are talking years and years before these Islands are what they once were.
So there is this supply and demand factor there and I cannot see the demand is really going to happen. If anything it's something to acknowledge when it comes to pricing .
Buyer be ready to pounce though:)
A wise man ounce said, if it flys or floats, RENT IT!
Ian Henderson your forgetting the last of the "f's" flies,floats, or f****.... rent It lol. Not my saying, I'm just he messenger lol
If it flies, floats or flirts.
Ian Henderson You got the saying wrong Ian,over here in England we say if it Flies Floats or Fcuks rent it lad !!!..think about it ,particularly the last one, it would have saved a lot of men and awfull lot of money!.
👍
With this sort of production pressure, say goodbye to quality manufacturing on cats for the next two years..
There may be a lot of people who will take their insurance check and be done with boating. I suspect many, many people to be leaving the market entirely.
Wincrasher2007 - I agree 100%! Not only will previous boat owners take their insurance checks and leave the market entirely, but many young couples and new retirees will reconsider purchasing a boat and trying to live aboard after this continuous string of hurricanes smashes everything for hundreds of miles. Gary is like most salespeople -- only looking at the side of the equation that helps their narrative. I was told by many realtors in Southern California in 2006 to "hurry and buy a home before you're priced out of the market!", a market which completely collapsed 12-18 months later. The supply in boats in the region has been reduced, but the demand may also be equally or even more greatly reduced than the supply.
Agreed .. I had exactly the same thought in watching this video. If in fact; a large number of people throw in the towel then demand will drop. This will be an interesting thing to watch over the next year or two.
Man, that's a downer for someone like me who has the dream to buy a cruising cat in the next five years. I'm guessing monohulls have on taken nearly as bad a hit. Would this cause you to reconsider the cat route?
I'm wondering about monohulls also. My uninformed guess is they will take a hit on price, but not nearly as big. I think the manufacturers of monos can crank them out quite a bit faster than the cat builders, so I would expect the market to stabilize for them more quickly.
I feel.bad for the boat companies.
why doesn't the air craft carriers come ahead of storm and pick up boats cars and
cruise ships pick up and evacuate people.
Too soon.
$16k to bring a boat to the east coast from Europe. I presume that covers transport captain and crew, and food? Given some of the favorable prices I'm seeing in Spain, Malta, etc., that doesn't seem too onerous. Am I missing something here?
I think he meant to ship it on a container ship.
Jessica Kirchoff Probably not a container ship, their decks are laid out for intermodal boxes, more like a general cargo ship or one of the dedicated yacht movers, some of which are float on, float off.
Gary Fretz Will delivery skippers raise their prices if Med to Carribean becomes a short term thing now?
Wow - video leads off with a 1:20 advertisement! No thanks.
Is it now a sellers market?
no way those charter market share % real !! (70% + 15% in just Tortola & St Maarten)
So Sad To see all these awesome boats damaged,, If anyone needs a partner to help get these boats back on top of the water, I am looking at getting into boat repairs and stop flipping houses !! Seams like they all have to float these days ! :)
Very interesting... sad news, the big cat companies will make out.. but production quality will go down.. It'as already not good.... lol. plastic hatches.....
I see profits made by DIY not corporate methods. It looked horrible tho, and is there enough money to cover all that damage? Crazy!
If you want a salvage your best bet is to fix it yourself.
Hello Jessica and Ryan - I work for Florida Yacht Group in Fort Lauderdale. What Gary said is exactly right! But we still have a few Jeanneaus and Lagoons coming this year from the manufacturer - so message me if interested!
Sound track out of sink!
MC1R Gene g
Those Islands are destroyed and the people are suffering Donate to the Red Cross Now back to sailing I'm thinkin' a Chris White 42' Atlantic Catamaran works to cruise anywhere; quickly/safely/comfortably
the broker is a broker. he makes money when a boat is sold or bought. Im not surprised his response to salvage was filled with boogeyman stories. if you are tring to get a 600k dollar boat for 30k then you will get a bad boat. but if you want a 50k for 10k you might find something
My family has a sailboat under TMM, it has damage just like every boat in the BVI but it NOT totaled aka sunk or flipped. We received a spread sheet of TMM's boat status the 24th. The CEO of the TMM didn't get the spread sheet till the 23rd. So how you can have this conversation before the 21st when the OWNERS and even CEO of the boats didn't get information till the 23rd and even then states not all boats are a LOSS is truly in-factual. Please work on your information before trying to be a expert. So much of that this guy says is misinformation its crazy. Nobody is there right now getting quotes on boat damage. The BVI is a disaster zone, they don't even have electricity.
Hello....I would like to ask you some questions about TMM, how can I contact you?
Spoken like a true salesman. Why are you trying, in the worst possible way, to get people to make a panic purchase.
Next time get a expert that dont claim that Caribbean is the hole world ? he claim that 85 off the charter is in Caribbiean ? And that its so hard and dangerous to buy a boat from Europe because the laws are so bad there etc thats not true. Typical American that think everything is spinning around him ;) but he has right in most of the rest