Private luxury boats – mega yachts 100 feet in length or longer – are also sometimes called “floating mansions.” In many respects, the process to building a mega-yacht is the same as that of a mansion. The owners have certain tastes, some would say peculiarities that they want embodied in an edifice that uniquely reflects their personalities and their success. This can sometimes lead to construction delays if there’s perceived mismatch at one stage or another between the owners’ vision, which may change over time, and the physical reality of what’s built.
This in part explains how Richmond Yachts can maintain a regular schedule of building up to four composite yachts a year. “Our marketing approach is a bit different than the norm in this industry,” explains Keith Kiselback, vice president of operations. “Typically a mega-yacht is custom built for a client who orders it in the conceptual stages or during very early construction. What we do is build the yacht, first, and then sell our inventory at boat shows or through yacht brokers. This is not to say we never do a custom build for an owner, it’s just that we find we can go to market faster this way. It eliminates the second-guessing that can delay a project. It’s not unusual for an owner at some stage of construction to say I thought I’d like this and now that I actually see, I don’t, so let’s make some changes, because it’s my boat and I should have it the way I want it. The same thing happens in building a house. It may just seem like a few changes to the client, but there are ramifications that affect other things getting completed, so production schedules have to get altered and costs can go up.”
In contrast, with a vessel from Richmond Yachts, “For an owner who doesn’t want to wait several years to get his boat made, it’s the best way to get a unique yacht that is state-of-the-art not only in terms of nautical engineering and design, but also interiors and in entertainment capabilities. And because our expenses are more under control, owners get the same quality and features at a lower cost than they might have expended had they contracted to build any yacht of similar design.”
A case in point is the Ward Seltzer-designed 142-foot tri-deck Status Quo series. The fourth in the series was recently launched, with the added cachet that its sister ship, the second hull produced in the series, was featured in the movie Fools Gold starring Matthew McConaughey and Kate Hudson. This yacht offers more than $2 million in enhancements above Richmond Yachts’ traditional builds, with rakish exterior lines providing enhanced aft visibility and improved storage, as well as lighter weight. The interior includes exotic tones and furnishings, and a sky lounge deck and pilothouse that are more typical on much large yachts. The yacht is powered by twin 1800 hp Caterpillar engines capable of top speeds up to 18 knots; at a normal cruising speed of 15 knots, the yacht easily covers a 3,000 nautical mile range.
Richmond Yachts is launching three more in this series, with the seventh scheduled for spring 2009. The yacht builder will then shift upward to 155- and 165-foot tri-decks that will feature expansive 30-foot beams for even more deluxe interiors, with a planned release of the first model in December 2009.
For now, though, Kiselback notes that Richmond Yachts is “the only player in the 145- foot category. That gives us a big advantage. For someone who is looking to upgrade from a smaller yacht, we offer an intermediary category to get a bigger vessel, while lessening the impact on the captain and crew. An extra 10 feet may not seem like much to the layperson, but it makes a huge difference in terms of operation and maintenance. For someone who isn’t yet ready for an 180-foot yacht, we offer a nice in-between stage from the smaller to the larger yacht.”
Indeed, though the average price of a Richmond Yachts product is in the $26 million range, Kiselback notes that owners typically are always looking for the next model upgrade. “It’s not unusual for a client to sell a yacht that hasn’t even completed construction because he wants to get something newer.”
Kiselback says Richmond Yachts is selling simultaneously to two audiences. “First, of course, there’s the owner, who typically has obviously been very successful so that he can afford a multimillion dollar yacht. But, often, he doesn’t really know too much about boats. He’s more likely to be concerned about the quality of the entertainment system or the trim in the lounge area. Even if he is
a boating enthusiast, he’s not going to pilot the craft. Which brings us to the second audience, the captain and the engineer, which is equally important, maybe more so. Owners always consult with their crew. A captain or an engineer wants the best equipment and facilities. A smooth running ship is the combination between the skills of the pilot and the construction of the yacht, and we want to be sure we offer the right mesh. Even the crew, which is essentially a hotel staff on water, can get involved. The easier we can make daily maintenance activities for the crew to make them more efficient, the more attractive our yachts become.”
Indeed, if, in one sense, mega-yachts are “floating mansions,” they are also “floating motels.” Kiselback points out that “owners use their yachts to go from place to place, to take a break and relax, sure, but they are also busy people running their businesses, so it’s not like they spend most of the year on them. Maybe they are on their yacht eight or 12 weeks, at most. The yacht doesn’t stay at
the dock the rest of the year. It’ll be chartered. Which is another reason why the opinions of the captain and crew might even matter more than the owner, who is essentially looking for bragging rights in having a beautiful boat that goes faster than most others and whose spouse loves the decorating scheme. But, the guys who actually have to work on the yacht can also be very particular about the technical and maintenance side, and they have a lot to say about the purchase decision. So, we aim to please them.”
Richmond Yachts builds in a six-acre yard in Richmond, British Columbia, Canada that houses under roof 70,000-square-foot state-of-the-art shipbuilding facilities. It maintains a sales office in Ft. Lauderdale, Fla.
Kiselback emphasizes that Richmond Yachts does all the manufacturing in-house; both the technical and aesthetic are fully under its purview. “We outsource some minor things, such as carpeting, because it doesn’t make sense for us to have a carpet installation crew on staff when you’re only talking about making four yachts a year. Everything else, from installing the engines to the entertainment systems, we do here. Obviously, there’s a lot of skilled labor involved here. We have about 160 employees. But the problem these days is that skilled labor is getting harder and harder to cultivate. I think the shipbuilding industry in general has to start giving a lot of thought to what we can automate in our processes without affecting quality. Maybe instead of having master carpenter custom cutting and fitting trim, we develop standard sizes that can be mass-produced and applied by a crew with basic carpenter skills.”
He emphasizes, “You can’t sacrifice quality because that’s what we’re selling here. Outstanding, unique quality and craftsmanship. But the reality is, we can’t rely on having the same quality labor force we’ve had in years past.”
That perception of quality, real or imagined, has sometimes hurt North American shipbuilders, Kiselback acknowledges. “European-built yachts, like high-end automobiles, have this image of precision engineering because of where they’re made. While there’s some truth to that, at the same time you can make a well designed and engineered yacht anywhere. There are some who will only consider European yachts because of their brand status, but I think that’s beginning to change. Particularly with the exchange rate between the Euro and the dollar, people are beginning to recognize that you get the same quality without a European heritage.”
The company was originally Sovereign Yachts, until it was purchased by Texas businessman Don Davis, whose own yacht was built by the company. “Don is a lifelong yachtsman, owner of several yachts, and he was eager to bring his concepts of quality and design to the boating world,” Kiselback says. “And we’ve been very successful in doing just that.”
He adds, “We’re in a unique industry in that we’re immune to general economic trends. Yachts cost a lot to maintain and operate. But, our customers are in an income bracket where the price of oil isn’t going to make any difference whether they buy a yacht or not. If they want one, they’re going to get one.”
For Richmond Yachts, that means business will not only remain afloat but continue full speed ahead.