Marcel Perdomo was just starting to make strides in his boat charter business when everything suddenly stopped.
“I had 50 bookings and they all canceled,” Perdomo said, recalling March 2020, when the county headed into coronavirus shutdown. “I made all this effort,” he thought. “Now I don’t know if I’m going to make a living.”
Perdomo had quit his full-time job as a traffic equipment salesman, went through a divorce, invested in a second powerboat and dedicated himself to being a full-time licensed charter boat captain just seven months prior to the start of the pandemic. Suddenly, he was faced with expensive maintenance, fuel and marina fees for two vessels – and no income.
Sid Hoeltzell – Wynwood 2021
Marcel Perdomo in the cabin of his 37-foot-long Sea Ray Sundancer.
“I was freaking out,” he said. “I was thinking, ‘Oh my God, what happened?’”
But in less than two months, Perdomo said his business, M-Boat-M Corp, more than rebounded – it thrived.
Prior to the pandemic, he made $6,000 a month. During the pandemic, he said he's raking in an average of $15,000 a month. In one extraordinary week, Perdomo, who also makes a living brokering deals for other licensed charter captains, made $40,000.
“If I can keep this up and make $40,000 a week, that’s $2 million worth of business a year,” he said.
The COVID-19 pandemic continues to adversely disrupt businesses across America. The multibillion-dollar cruise ship industry was hit particularly hard by the virus, with the U.S. Centers for Disease Control and Prevention still recommending that people avoid sailing on enclosed floating resorts filled with hundreds of strangers.
But while the cruise ship industry’s future remains murky, recreating the experience with friends and family and maybe a few strangers on floating powered vessels is gaining popularity. In fact, boat dealerships, manufacturers, repair shops and charter captains have been reporting phenomenal business across the nation.
Courtesy of Marcel Perdomo
Happy clients of boat captain Marcel Perdomo.
This past January, the National Marine Manufacturers Association (NMMA) reported that powerboat sales were at a 13-year high in 2020, with a large chunk of purchases being made by first-time boat buyers. Likewise, publicists for GetMyBoat, an app that connects charter boat captains with prospective clients, said business tanked in March and April, but a wild surge in demand beginning in May led to a rental reservation confirmation every few minutes. They claim to have seen a 3,900% growth increase by July, with Miami its top booked location in 2021. And Boatsetter, a Fort Lauderdale-headquartered Airbnb-like service for people to rent out their boats, saw its business increase by 74%.
South Florida’s boating industry is doing well, too. Sales for all manner of powerboats were up 21% in 2020 compared to 2019 in Miami-Dade and Broward counties, also a13-year high, stated NMMA spokeswoman Sarah Salvatori.
“People realized that this is an activity they can do with the family where they can social distance and get outside,” said Andrew Doole, president of Informa’s U.S. boat shows division, host of the Miami International Boat Show, which will hold its next event at the Miami Beach Convention Center in February 2022.
Partying on the High Seas – Fines Be Damned
Boating with even a small number of people does carry the risk of catching the coronavirus, especially if they are less than 2 feet apart or unmasked, warned Mary Jo Trepka, a physician and chair of Florida International University’s Department of Epidemiology. Still, partying on a boat with a few other individuals in the open air is less hazardous than being in close proximity with others in an unventilated room, restaurant or enclosed cruise ship.
“In a well-ventilated place, the amount you are exposed to the (COVID-19) virus is much lower,” Trepka said. “It is way more risky to be indoors (with other people who may or may not carry the coronavirus) than outdoors.”
That modicum of COVID-19 safety has helped create such a high demand for boats that there’s now a significant scarcity. And that scarcity, in turn, has helped fuel short-term boat rentals. Three charter boat operators interviewed by the Biscayne Times – including Perdomo – said they sanitize their vessels after every trip, and regularly test their crews for coronavirus. But outside the cabin, in the fresh air, it’s up to passengers if they wish to wear masks or not.
Sid Hoeltzell www.sidphoto.c
Victor Campos, Boat owner
“In open spaces, masks are not required,” explained Victor Campos, a charter boat captain for the past six years, “so customers can be free and enjoy the nature.”
It’s not just charter boat captains who’ve been busy. In fiscal year 2019-2020 (Oct. 1 through Sept. 30), the United States Coast Guard was involved in 422 search and rescue cases – a nearly 92% increase from the previous fiscal year. And not even halfway through 2020-2021, from Oct. 1 of last year to March 17, the Coast Guard has already logged 306 search and rescue cases.
The Coast Guard isn’t just rendering aid; it’s also clamping down on illegal charters. Under federal regulations, boat owners can rent out their vessels to another party who will take on responsibility of that boat during the course of the lease (a bareboat charter). However, that owner can’t be on board unless he or she is a licensed charter captain who, among other things, is familiar with Coast Guard safety regulations.
In spite of civil penalties as high as $95,881 a day, the Coast Guard terminated the voyages of 43 unlicensed charters in the 2019-2020 fiscal year. There have been 38 terminations so far this fiscal year, between Oct. 1 and March 17.
In an email to the Biscayne Times, Lt. Junior Grade Danny Hicks, an investigating officer for the Miami sector, stated he’s never seen so many people flaunt the law.
“I’ve been stationed in the area since the beginning of 2019 and nothing compares to the activity we have on the water now regarding illegal charters,” he stated.
Yet for licensed captains who are savvy in the use of social media services and apps like GetMyBoat, Instagram and Boatsetter, COVID-19 has provided a bountiful feast.
Campos, who divides his time between Miami and Dallas, said his business went up more than 300% thanks to the pandemic.
“The pandemic was incredible for me. All people wanted to do was be out on the water,” said Campos, who charters three vessels.
Ximena Pena, who also charters three vessels, said she’s been swamped with business as well.
“I have been busy because everybody is tired of being indoors,” she said. “Everybody wants to be on a boat.”
Unprecedented Growth Boosts a Dying Local Economy
Phil Purcell, president and CEO of Marine Industries Association of South Florida (MIASF), said when the shutdowns started this past March, many in the industry were terrified that the nation was headed for another Great Recession event. During that period, which commenced in 2008, boat sales plummeted and several companies went bankrupt.
“In March, we all got into a fetal position,” Purcell acknowledged. “We thought we’d have to move all our stuff, and move into a station wagon.”
But by May of 2020, when the county was relaxing strict lockdown rules, Purcell said it was apparent that the “opposite happened.” People were buying or renting boats in droves. Yacht sales alone went up 35%, he said.
“People wanted to go outside,” Purcell emphasized. “Instead of going to Disney World, they want to go out on a boat.”
This isn’t just good news for the boating industry. More business means more hiring in a sector that has a $12.6 billion impact on Miami-Dade, Broward and Palm Beach counties. Between 2018 and 2020, the number of marine industry jobs in the tricounty South Florida region has grown by 6,996 to a total of 148,908 jobs, according to studies by the MIASF. In Miami-Dade alone 143 new jobs were created in the marine industry between 2018 and 2020. Those jobs, Purcell added, pay 16% higher than the average wage in Florida.
The growth in the boat industry has been beneficial for other sectors, too, he said.
“The positive upward trend of boating and yachting increases the positive economic impact on South Florida,” said Julie Fisher Berry, a commercial real estate broker and a senior vice president of CBRE Group’s capital markets division. “Boat owners are buying their provisions here, they’re getting repairs here, they’re filling up with gas here. They’re going to area restaurants. They are staying in the area.”
Courtesy of RMK Merrill Stevens
RMK Merrill Stevens' expanded manufacturing facilities on the Miami River.
In Florida, the COVID-19 boost propelled an industry that was already on an upswing. In recent years, affluent individuals have been flocking to Florida to take advantage of its low taxes and great weather. Many of them have been purchasing boats, leading local boat manufacturers and repair facilities to expand their capabilities. RMK Merrill-Stevens on the Miami River, for example, invested $40 million in 2019 to upgrade its ability to repair and refit yachts and superyachts that are now in demand by the ultra-rich.
Nevertheless, boat manufacturers are still having trouble keeping up with the demand.
Low Inventory Creates a Buying Frenzy
“There are no beautiful, good boats to purchase, because everybody has gone out to buy boats, so they can spend time with family and friends while they’re social distancing,” summarized Nicole Squartino, social media and marketing manager for RMK.
Robert Ponce, director of yacht sales at RMK, said it’s now an extreme seller’s market, where vessels are often sold soon after they reach inventory.
“When people call me, it’s usually in panic mode: ‘Is the boat still available?’” Ponce related. “Boats, they’re here today and gone tomorrow.”
Rudy Tomarchio via LinkedIn
Rudy Tomarchio, Marketing Manager for Invincible Boats
Rudy Tomarchio, manager of marketing for Invincible Boats, an Opa-locka-based manufacturer of center counsel fishing boats, said boat builders all over the nation had order backlogs of between six months and two years before the pandemic.
“With this increased demand, all this has done is pushed [orders] even further back for some of us,” said Tomarchio, whose company expanded into a new 50,000-square-foot facility in the summer of 2019 to meet the demand. Pre-owned boats are in high demand, too, he added.
“The used boat market is huge. Relatively new boats that are five years, 10 years old are flying off the market within days,” he said.
It isn’t just boats that are in short supply. Berry said there are fewer boat slips for someone to park their vessel.
“As a result of boat sales surging, the marinas got filled up, so there’s a shortage of marina slips in many areas,” she said, a problem exacerbated by travel restrictions set in place by the pandemic. “A lot of the yachts, they were scheduled to travel, to go to the Mediterranean for the summer. They ended up staying in the United States.”
Additionally, environmental regulations designed to help protect manatees restrict the ability of developers to create more boat slips, Berry said. This scarcity has caused marinas to trade at inflated values. On March 9, a Delaware-registered company of unknown ownership paid $11 million for the 72-slip River Cove Marina on the Miami River. The previous owner, RCI Group, bought the property for $3.8 million in 2006, the South Florida Business Journal reported.
There also a scarcity of skilled labor – people who know how to maintain, repair and build boats – not just in South Florida, but also throughout the world.
“Every manufacturer is trying to find people,” Tomarchio said.
MIASF is seeking to increase the number of skilled laborers here in South Florida by recruiting local middle and high school students into marine-related vocational schools and yacht service technician apprenticeships. Purcell said that students who graduate from these programs can make anywhere from $60,000 to $80,000 a year within a couple of years. There’s also plenty of work, especially when it comes to repairing yachts.
Said Purcell, “The nice thing about the big boat world is that it’s very labor intensive.”