FIT FOR THE LONG HAUL
A GROWING YACHT REFIT SECTOR IS GOOD NEWS FOR YACHT OWNERS, AND IT CAN BENEFIT NEW-BOAT BUILDERS AS WELL.
A growing yacht refit sector is good news for yacht owners, and it can benefit new-boat builders as well.
The yacht refit sector of the shipyard industry is booming. In a world where most manufactured items are treated as disposable, nothing burns brighter than the hope of a yacht owner or new buyer who wants to spend a fraction of what a brand-new boat would cost yet end up with something just as good… or better.
New builds have traditionally been the celebrity darlings of the yachting world—even though many of us in the industry have known for years that repair and refit work is actually more profitable with a consistently higher return on investment.
Back in the early 2000s, when I was running a major refit yard in the Savannah area, our refit work alone generated, on average, annual gross revenue equivalent to $30 million today. Just as importantly, we could achieve a net profit on that work more than double what the company could return on building and selling new yachts. Yet, at the time, if you mentioned that disparity—even to industry insiders—you’d often be dismissed out of hand as little more than a nut case.
While I can’t say for certain why that was, I suspect it was because refit is associated with repair—correcting things gone wrong. New builds are shiny and clean while yachts for refit are, well, broken or at least worn out—and probably corroded and dirty to boot.
Today, the landscape of the industry has changed materially. No longer is refit seen as the poor cousin of new build but rather as a business activity to be nurtured and grown on its own. I suppose we could say that refit has come into vogue. Or perhaps, that refit is finally being appreciated business-wise for what it is: a potentially strong profit center even for new-build yards.
Back to the Future
While many U.S. yards have, at times, downplayed refit work in deference to building their respective new-build brands, many European yards have tended to openly identify with their historical roots in refit services and capabilities. They’ve long recognized that, run properly, refit is a serious profit center. And U.S. yards are finally catching on.
The emergence of superyacht yards in the U.S., including Rybovich and Lauderdale Marine Center, has brought with it a genuinely new attitude toward the refit sector. According to Doug West, CEO of Lauderdale Marine Center (LMC), the Fort Lauderdale, Florida–based yacht yard just had its best year ever. And West sees a continuing strengthening of the refit market over the next two to three years. In anticipation, LMC has restructured its operation and recently added 50 slips for yachts 80 feet and larger. The shipyard now provides a working venue for two dozen general yacht refit contractors, plus facilities for numerous other specialty subcontractors and other vendors. There is no doubt that, in South Florida and beyond, refit is a serious business that promises to become more serious each year.
That view is echoed by some builders of smaller yachts as well. For instance, I recently visited TLC Yachts in Fairport Harbor, Ohio. TLC builds the long-established Tartan line of sailboats and the newer Legacy brand of Down Eaststyle express cruisers. These boats, which range from 32 to 53 feet, are by no means “megayachts.” Yet TLC has also found it worthwhile to offer refit services. Owners of older Tartans in particular find a refit to be a great option. Their yachts are so stoutly built they will probably last into the next millennium, but they might need a cosmetic makeover and perhaps a rig redo.
Certainly it’s worth noting that even a new-build stalwart like Burger Boat Company in Manitowoc, Wisconsin—a veritable icon of U.S. yachtbuilding—now speaks unabashedly about the refit services it offers. Indeed, Ron Cleveringa, Burger’s vice president of sales and marketing, notes that last winter their yard was “packed” with major repair/refit work, including refurbs not only on a Burger but also on a Hatteras and a Hargrave.
Traditional Trawlers, Today’s Technology
It’s not just the yacht yards and boatbuilders that are benefiting from this refit renaissance. The contemporary refit sector offers owners the chance to give their older yachts a new lease on life by taking advantage of new technologies without taking on the expense of buying a new boat.
This is especially true for traditional trawler owners. I was recently asked the question of whether I thought that technological evolution in the refit sector bears in any specific way on the refit of the traditional trawler. At first, I thought simply to answer that it didn’t. After all, shipwright work is shipwright work, electrical work is electrical work, and piping is piping. Some may be simpler and some more complex. But basically, it all involves the same skills whether the vessel is a fast motoryacht or a trawler.
However, upon reflection, it occurs to me that advances in materials and in modern computer-based auxiliary equipment have, indeed, impacted the refit of trawler yachts. For instance, the retrofit of joystick-based vectoring control systems can open the door to making an older trawler into a truly modern vessel that is safer and easier to operate with a small crew. And the same might be said about upgrades
to modern electronically controlled propulsion engines and active stabilizing systems. Today, doing a serious refit of an older trawler yacht might make sense, whereas the cost and effort might not have been worth it just a decade or two ago.
Refitting the Refit Business
The increasing interest in refit on the part of boatbuilders and service boatyards has brought with it higher standards, both for the craftsmanship involved and for the planning and management of major projects. “On budget and on time” is no longer an empty slogan, as numerous yards enter into this new market sector with a serious dedication to refit as a core business.
It’s important to understand that a major refit is not simply a list of repair tasks. Rather these refits involve tasks and sequential dependencies that can rival the complexity of a new-build project. Between managing the supply chain for materials and fittings, coordinating subcontractor services and protecting the yacht and the owner’s investment in the project, a major refit demands a level of business sophistication best delivered by a reputable, established yard that has a vested interest in maintaining its reputation in the market.
Don’t get me wrong. Not all first-rate craftsmanship requires a fixed base of operations. But with so much at stake in these refits, the business side is just as important as shop-floor performance. Consequently, if you’re thinking about investing in a major refit, you’d do well to keep in mind that the bigger the project, the greater the need for professional organization and management.
This is why yacht yards like Lauderdale Marine Center are working to improve the standards of the refit industry by requiring the contractors and subcontractors who use their venue to demonstrate proper skill and experience, as well as have required licensing and insurance.
Some might see this move as an attempt to limit entry into the field and eliminate competition. However, as Colin Kiley, executive vice president of LMC, explains, the shipyard doesn’t simply hold contractors and subs to a high standard of professionalism. Yard management also works actively to help them achieve that standard with counseling and consulting in areas like project planning and management, contract development, warranty and general business management.
But whichever way you see it, the recent growth of the refit sector is good for just about everybody involved with yachting—including yacht owners and buyers. After all, not all buyers are in the market for a new yacht. And having a broad range of choices available for refitting pre-owned or older yachts is certainly a way for many potential buyers to enter or stay in yachting. It is also, truth be told, a way for some builders to stay in business.