PALM BEACH, Fla. — Rough economic seas will force the luxury yachting industry to rethink the way it is doing business, according to Christos Livadas, chairman and CEO of Tricon Marine. Livadas also thinks a number of yacht companies may fold this year.
Livadas shared his thoughts in a recent written statement. He predicts:
— Outsourcing will become a familiar and successful solution, even for companies that never thought they would embrace it. Because shipyards have invested a lot of capital in infrastructure expansion over the years, overhead costs are now unsustainable high, he says. Outsourcing and downsizing is a quick and viable way to cut costs, and land and other assets can be sold off creating liquidity, according to Livadas.
— The situation in the near term is very weak. After this down cycle completes itself, it will take 12 to 24 months to return to the growth rates of prior decades.
— The charter market will recover more quickly than the ownership market as consumers across the board have become more conscious of spending habits.
— In the near- to long-term, Baby Boomers will support the yachting industry from declining as steeply as other industries.
Tricon Marine, based in Palm Beach, Fla., builds yachts out of a shipyard located just outside the city of Zhuhai in China's Guangdong province.
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