Saturday, May 21, 2011

2011 American Superyacht Forum - Reality and More

Every year I attend the American Superyacht Forum and most years I attend the Global Superyacht Forum; both hosted by The Yacht Report Group.  Every year I hear how wonderful everything is...or will be...while this clearly troubled industry fails to respond in any substantive way other than to claim "If you build them they will come."

This year, however, it was different.  The three day conference (and networking SuperBowl) was held at the home of American yachting:  Fort Lauderdale, Florida from May 16 - 18, 2011.  And the cold, hard, facts were honestly discussed. 

In a nutshell, the superyacht (over 140 feet) and yacht business has been suffering not only because of the stigma (rather than the bragging rights pre-economic meltdown), but a lack of consistent quality and service and, to be sure, the seemingly increasing in complexity generating oneupmanship while failing to consistently deliver the hype of these new technologies.

The essence is that new, expensive, toys are cool only if they work and the cost is not totally disproportional to the value perceived by the owners and perspective owners. 

One subject that really struck home this point was on paint jobs.  Probably the single greatest area of dispute is the quality of the paint job.  Even with the industry finally moving away (albeit too slowly) from obtuse definitions such as "Northern European yacht finish" to qualitative measurements of such things as gloss, mirror finish, amount of "orange peel" and dust, the paint problems remain many-fold.  For example, Can the human eye really see the difference after a certain level is achieved?  Does a little imperfection in an area never seen up close or by the public really matter?  What intervening events (i.e. crew washing the hull too soon after the last coat) affected the measurements?  And the list goes on. 

Trying to prevent these disputes by achieving an extraordinarily high standard or fighting to use a more reasonable one only increases the lack of a pleasurable experience or a yacht owner.  The owners generally rely upon the captain and their retained "experts" (some of which are not really experts), so there is an element of blind trust...or who do you trust.

Discussion was had about why there even are standards and, if they are needed, why does there have to be one.  In the typical yachting industry fashion, the knee-jerk reaction was that there should only be the highest standards.  This was, of course, pushed by someone in the paint contracting business, so it is to his benefit for higher standards and, thus, a reason to charge more money.

But I put it another way.  I said, if an owner of a yacht is perfectly happy with a finish akin to a Chevy why should that standard not be available to him?  I mean there are other aspects of his new yacht that he may find better value in, such as speed, electronics, mill work, etc.  So if he wants a Chevy finish, rather than a Rolls Royce finish, the industry needs to be able to provide that to him.

But that lead to a discussion after the presentation about why the yards do not do a better job on welding the hull, because if they did, possibly 40% of the fairing (smoothing) compound could be eliminated...which would in turn eliminate many of the finish paint issues, would noticeably reduce the weight of the yacht making it more fuel efficient...and significantly reduce the cost of a paint job. All of these things would make the owner's experience better.

In another session on managing the supply chain I was shocked to hear one of the more prominent technology companies admit that it had been ordering antiquated parts rather than discussing with its supplier if the parts it was order were the best available for the purpose intended.  I said to myself, "OMG!  There is the nightmare of an owner. He buys what he thinks is the newest, latest and greatest, but when it fails that particular part is no longer available and, rather than going to the same supplier, another genius wrongly advises that an entire portion of his system has to be rebuilt because of that antiquated part."  That happens more than you could imagine.

So the bad news is that there is dirty laundry.  The good news is that it is being aired and, hopefully, addressed.  And, believe it or not, the biggest takeaway was that maybe...just maybe...more complicated isn't better.  Maybe it makes more sense to build 140 foot yachts...and more of them...than one 240 yacht that can bring a yard to its knees and an owner to tears.

A friend of mine owns a company called Intelisea.  It is a pretty cool interface system, but what is better is his tag line:  "It Works.  Period."  As an industry we need to build on that.

OK, enough of the analytical stuff.  We also has some nice social activities.  Of interest to many of you who depart on cruises out of Fort Lauderdale, we had our annual dinner at the revolving restaurant on the top of the Hyatt Pier 66.  It was as it has always been, a rotating restaurant with acceptable food and a great view. 

We also engaged in a sport fishing tournament which was sponsored, in part, by my law firm Goldring & Goldring, P.A.  A fleet of 20 sport-fishing yachts headed out onto the high seas.  Our boat was quite successful with all four of us catching something.  I caught a nice dolphin (mahi mahi) which was later grilled for us at a barbecue at Bahia Mar Yachting Center.  But the big fish was a 7 foot 5 inch hammerhead shark caught by my boatmate.  (Unfortunately, the fish was hooked so deep it did not survive.  Quite a shame.)   So if you are interested in doing something pre-cruise, a bit of fishing just might be an interesting alternative.

An ironic note:  Wartsila, the manufacturers of the engines aboard the Seabourn Odyssey, Sojourn and Quest was present at the conference as it seeks to enter into the superyacht industry.  It had a door prize.  I won.  Coincidence?

To close this out, I thought I would give you a bit of perspective.  As I sat on my balcony with a yacht friend, we looked out and saw the 59 meter (195 foot) Azteca docked right in front of us.  While most people would be thrilled having a view of a superyacht, my friend turned to me and said, "Why don't they move the damn boat.  It's blocking our view!"

That might help explain why I look at the cruise industry a bit differently.