Irma and the local boat market

[Red Herring]

Originally Posted by bobnlesley

But not so the smaller(charter operators), perhaps single-base operators...

I don't think the smaller charter operators will survive. Too expensive to rebuild, and I doubt insurance is going to cover all their loses. It will take the big guys years to rebuild, and I don't think it will be possible for the small guys to even continue operating with ongoing costs and no revenue. What they can salvage, they will sell. Sure will be fewer "charter version" boats up for sale, and that might bolster "owner version" values, or at least offset the increased skepticism and decreased buyer enthusiasm.

[txgirllana]

Originally Posted by timbo1123

I'm one of those currently in the market for a used boat. I live in Texas and was interested in a particular cat located on the coast. Have yet to find out the fate of that boat. I was hoping to take early retirement and start living aboard and cruising for a few years. These two storms have given me great pause on that idea!

That was our plan too. Where in texas are you?

[ranchero76]

Originally Posted by bobnlesley

Originally Posted by ranchero76
From my point of view, boat market will be down big time ...- Charter companies will try to repair what's repairable (not total loss), they will have unlimited parts supply from total loss boats. Replacements for total loss boats most likely will be purchased after insurance settlements - not in near future...



We were discussing the subject in the bar just a few nights ago and the conclusion on this point at least was the exact opposite: The Charter Companies need boats out on the water to stay in business and the Caribbean, particularly BVIs fleets are a major part of the world-wide business. We agreed with your point that the from a fleet of say 50 similar, but smashed-up catamarans, you can perhaps assemble 20-30 from the total relatively quickly, the big/international operators like Moorings could also get a bunch extra sailed/shipped across from their Mediterranean fleets to fill the gap short-term, perhaps even sailing them back again next spring as it'll take the major manufacturers a good while to catch-up ont the increased demand (I suspect their share values have jumped?). But not so the smaller, perhaps single-base operators; they'll need replacement boats and will amost certainly be further down on the manufacturers list of 'important' customers than Moorings and the like, so as a result I would suspect that they're already looking around for relatively new/well maintained replacements on the secondhand market; that ought to push prices up, or at least offset the price-falls that you're predicting, though admittedly, only for a small proportion of owners.

Except you're missing one point. There will be no tourists/charters in the area until everything on land and on water will be cleared up, infrastructure repaired/newly re-built . And that will take months/years. Who will buy boats in the rush and than wait long time until they can put them in use? And even then - only very wealthy charters with lots of spare cash will be able to do that without knowing that they even will be able to get settlement money from insurance (and most likely, many won't).

Look what real people post in this thread. They either scared and cancel their plans, or ask questions about salvage auctions (in hope that they finally can afford what they wanted). No one is screaming "OMG, I need to buy good boat ASAP before prices will jump to the sky". And with apparently no insurance available, financing is not an option for a while. How many people have 500K-1M in their pockets to buy catamaran (read - toy)?

Is there guarantee that something similar won't happen in a year or two? Let's guess - even if some insurance companies will survive, will they insure boats from named hurricanes next year? I really doubt it, but if they will, what will be the premium? It's OK for me, because I'm not relying on insurance in this life, but how many people with same thinking still around?

[Kenomac]

I'm wondering how much they'll be asking for the upside down Sunreef 62?

[model 10]

Originally Posted by TheNomadTrip

That said, I have noticed a trend - even just in this thread - that those in positions to sell boats are predicting a slight increase in the value of their sale and those looking to buy are on the other side of the fence. Guess we'll see

It also depends on what class of boat you are selling. Most of the sailing boats destroyed so far are pretty valuable. If you are trying to sell a $30k boat, I doubt you are getting very excited, yet.

[TheNomadTrip]

Originally Posted by Guy

It also depends on what class of boat you are selling. Most of the sailing boats destroyed so far are pretty valuable. If you are trying to sell a $30k boat, I doubt you are getting very excited, yet.

I didn't even know $30K would get you into a boat. From what I've seen it definitely doesn't get you into anything that I consider a boat.

[travellerw]

Originally Posted by TheNomadTrip

I didn't even know $30K would get you into a boat. From what I've seen it definitely doesn't get you into anything that I consider a boat.

Yup.. I agree with this.. Its a wait and see game... Way too early to tell..

However, one thing I'm almost certain will be affected is boat parts. Its only a few days after the event and I have already been offered multiple "spares" at super low prices. This even includes 2 complete spare motors and sail drives. None of it was installed in boats and is brand new (the owners no longer have boats to put it in).

[u4ea32]

I don't know what will happen. But here is my hunch based on personal experience.

I think it will be a boon to boat builders. A really, really huge major boon!

In 1993, there was a huge earthquake here in LA. LA had been in a recession following the closure of the GM plant, the collapse of marine manufacturing due to the 10% luxury tax, and aircraft manufacturing moved to other places. The influx of money and economic activity to rebuild pulled LA out of that recession, and led to a big increase in the value of real estate, both new and used.

In 2015, Sandy hit NY and caused widespread devastation. Now, all the damaged areas are like new! All new cars, all the houses look new and were rebuilt much bigger: because most are being rebuilt on stilts, so an addition of 50% to 33% more square feet, and the views are wonderful! Everyone is much, much better off, the economy is at another level now.

Disasters allow things to be made new. That means a huge increase in the capital value of the entire region. And that capital value increase includes labor and manufacturing too, so its very widespread, pervasive increase in wealth.

[u4ea32]

Originally Posted by ranchero76

Except you're missing one point. There will be no tourists/charters in the area until everything on land and on water will be cleared up, infrastructure repaired/newly re-built . And that will take months/years.

There is no doubt that some things will take quite awhile. However, those islands will look beautiful in weeks -- tropical island vegetation is amazingly resilient to hurricanes. The sun, the wind, the sand, the reefs, the green hills will be absolutely gorgeous by Thanksgiving.

So from a charter boat, its going to be very, very nice very soon.

The demand will be there, the boats will not. The current owners of all those totaled boats -- thousands of them -- will have big fat checks in hand. I am sure they will go ahead and buy replacements, and back they go into charter.

Originally Posted by ranchero76

Who will buy boats in the rush and than wait long time until they can put them in use? And even then - only very wealthy charters with lots of spare cash will be able to do that ...

The exact same people who bought those boats in the first place, will buy new with insurance settlements. Insurance settlements happen, and they happen quickly.

The insurance companies were in fact a bit gun shy after the LA Earthquake, but the rates were not outrageous. Note that no insurance companies will fail due to these disasters. Even the trillions lost in the Global Financial Catastrophe had no lasting negative effects on those banks and insurance companies: huge bonuses were paid out the year of the collapse and every year since.

This world economy is tough. And rebuilding is really, really good for every single player involved. Everyone.

[CaptsWife]

All this storm damage talk and how it affects insurance companies............if they don't insure anyone, how do they make money?

[TheNomadTrip]

One can obtain anything one wants for whatever price they are willing to pay. I understand that as well as the next fellow.

Even with hurricane damage and a salvage title, I'd expect to pay more than $30K for anything that I'd be 'trading up' for - which is where I've come into this discussion from the beginning.


Different strokes, different folks.

PS - My commercial friends regularly tell me my boat isn't a boat. It doesn't have a steel hull and doesn't have 800 HP. I don't take offense at that. Life is way too short to be offended by that kind of thing.

[TheNomadTrip]

Originally Posted by travellerw

Yup.. I agree with this.. Its a wait and see game... Way too early to tell..

However, one thing I'm almost certain will be affected is boat parts. Its only a few days after the event and I have already been offered multiple "spares" at super low prices. This even includes 2 complete spare motors and sail drives. None of it was installed in boats and is brand new (the owners no longer have boats to put it in).

I missed this. PM sent, I'm curious.

[Sawbonz]

Point of interest...about three weeks ago we signed up for a Leopard 45 to be delivered next August 1. We were told, and I believe it to be true, that the next Leopard 45 available will be in 2019. The Leopard 50 that will be announced in Annapolis will not deliver until 2019 also. So, I suspect the market will be terribly tight if most of these boats are scrapped instead of repaired.

[JPA Cate]

This thread has had a few posts edited and a great number have been deleted. Please remember to follow the "be nice" rule in posting. Thank you.

JPA Cate

[keepondancin]

Charter companies don't own boats, they sell them and manage them. They lose revenue because of a shortage of boats to charter but make money selling them to people to put in charter. Top level companies won't be putting patched up boats out there, they charge top dollar for charter time, there not going to be putting a "rent a wreck out there. Owners will get insurance checks, and make a decision whether to replace or quit the game. Sales people at the boat shows will be hawking how good a deal it is to get into it right now, a huge demand for boats, short supply. In all my years in the islands, I have observed how they deal with storms. This isn't the first and won't be the last. They will get up and running quickly and will very quickly cut deals with all the Clorox bottle boat builders, and soon the masses will be back in the Virgins drinking Pain Killers, but it might be under a tin roof, not a mahogany bar. It is cheaper to junk the boats, sell a few to the fool hearty, and start up again quickly. Dockrash is one thing, holed, keel less and dismasted is something else. It is alway cheaper to build new than rebuild, unless you are one of the few that have the skills, talent, time and money to dedicate to the challenge. To the bottom feeders looking to steal that boat, you will get what you pay for.