Mega-Yachts and Mobile McMansions

KeyBank brought me down to Ft. Lauderdale a few weeks ago to attend the International Boat Show.  Over one hundred thousand attendees attend this event each year, bringing in more revenue for Ft. Lauderdale than even the Super Bowl.

From KeyBank’s perch in “Mega-Yacht Row,” we had an up-close view of personal luxury yachts that ranged in cost from $6 million to more than $25 million and up and ran upwards of 160 feet. The term mega-yacht isn’t really sufficient though when describing the new up-and-coming yachts that are well past two hundred feet and can run higher than 400 feet. For these vessels, the industry has introduced the term “Giga-Yacht.”

While at the show, I also learned about “shadow yachts.” These are second boats that follow the first boat and contain all the toys the yacht owner could want, from cars and motorcycles to helicopters and speedboats. Shadow yachts also contain beauty parlors, additional storage space and room for additional staff, including security teams.

While I rarely report on the lives of the super-wealthy, I have to say that visiting a yacht that my entire Manhattan apartment could fit into made me swoon a bit.

During my time down there, I had a chance to speak with several experts in the yachting industry. I’m told that the super-yacht segment—an umbrella category for all yachts larger than 148 feet—is thriving. But the bulk of the yachting industry has suffered from a soft market for the past two years or so. Several people asked for my opinion on that dichotomy. Was it, they wondered, a sign of the plutonomy I’ve been writing about in this space so often? I’d venture to say that it probably is.

Further evidence of the plutonomy revealed itself to me in a recent New York Times article entitled, “Housing Crisis? Try Mobile McMansions.” Reporter John Schwartz visited the R.V. industry’s version of the Ft. Lauderdale’s International Boat show in Louisville’s Kentucky Exposition Center.

Schwartz describes the same anemia within the R.V. industry as I found in the boating industry: Sales are slipping. Winnebago announced falling revenues for the first time in six years. The industry association forecasts a 4.8% decline in 2008.

Like yachting, R.Vs are enormously expensive toys. The rule of thumb with a yacht is that annual maintenance costs will probably equal about 10% of the cost of the boat. That means that after you buy a $5 million yacht, you can expect annual costs of $500,000 to enjoy it.

Also, like yachts, the highest end of the R.V. industry, Mr. Howard of Country Coach points out, “is where our growth is.” Country Coach sells “rolling mansions” that can be decked out with Italian marble floors, window-size flat screen TVs and satellite systems to receive Internet and TV signals. Best of all, these models have two bathrooms. This way, according to Mr. Howard, “I don’t have to share my bathroom with guests.”

Country Coach’s target buyer was 63 to 68 years old but he explains that a new market segment—ages 53 to 61—is growing fast.

I have a name for these buyers, Middle-Class Millionaires.

Happy trails, Louisville. Bon voyage, Ft. Lauderdale.