Megayacht Market Expands

By Larry Pearson

Basic laws of supply and demand seem to have little impact on the megayacht market. It is driven by the financial health of the builders, not the purchasers. In the past, the market had been plagued by high profile bankruptcies of some of the builders, driving buyers to Europe or even the Far East for their dreamboats. Today the U.S. market is healthier because of one firm, Trinity Yachts of New Orleans.

Trinity has been in business for a little over four years, but in that time they have continued to grow to a point where they are building a new outfitting building for vessels up to 250 ft. long and typically have three boats in their outfitting shed and three in fabrication. "Outfitting one of our boats takes at least a year," said Billy Smith, VP of Trinity Yachts.

A typical Trinity Yacht sells for at least $20 million and often $30 million or more. "Our vessels are usually in the 155-161 ft. range because owners want to max out at 500 tons International. Once you get over 500 tons, regulations place increased cost burden on owners," Smith said. Trinity's next delivery in the first quarter of 2005 will be a milestone of sorts for the company. "At 180 ft., it is the longest vessel we have delivered, it is full displacement and has a steel hull and an aluminum superstructure and falls within the 500 ton rules," Smith added. Called the Mia Elsie, it is the third vessel Trinity has built for the same owner. "Last year, we completed a 150-ft. Mia Elise for this owner who had sold another boat. It is likely the owner will sell the 150-ft. Mia Elise when the 180-ft.er is delivered." according to Smith.

"We are very anxious for this boat to get into service so others can see what we can do," Smith added. Typically vessels of this size and quality are built in Europe, so Smith believes he can divert more business that might "automatically" go to Germany and other foreign yards to Trinity. For the most part, Trinity's yachts work at least part of the year in the private charter market. "Of the 30 plus boats we have built, only about five are truly private yachts. Most are chartered at least part of the year," Smith reported.

Three factors influence chartering of these megayachts. The major factor is that most of the owners run major businesses and simply do not have the time to be on their yachts all the time. Secondly, as businessmen, owners do not like to have investments of this magnitude idle not producing a return. Thirdly, the crew loves charters because of the generous tips involved. "And every owner will tell you that a well paid crew is a happier crew that goes all out when the owner is onboard," Smith said. Right now in the three bay outfitting building, Trinity has the 180-ft. Mia Elise being finished for March-April delivery, the 157-ft. Relentless, another spring 2005 delivery and the 156-ft. Lady Florence, slated to leave Trinity in the fall 2005.

The 157-ft. Janie is complete but waiting in a Trinity slip for the crew to sail it to the owner. In the fabrication buildings are three 161-ft. vessels….Lady Linda, Wheels and a yacht for an undisclosed interest. These three vessels are for 2006 delivery. No doubt there are more under design. While each vessel at Trinity starts with a clean sheet of paper, there are some similarities among recent deliveries. All are Trideck motoryachts, with main power a pair of Caterpillar 3512 or Caterpillar 3516 diesel engines. In addition all are ABS classed.

Trinity is also looking beyond luxury megayachts. They have formed Trinity Offshore, headed by one of the most respected pros in the shipbuilding industry, Jim Rivers. Rivers like Smith and President John Dane III are ex-Halter Marine executives. "We have the engineering and fabrication capabilities to do all kinds of "high value" aluminum fabrication, everything from complete vessels to subassemblies," Smith added. "We are not doing to be building standard oil field crew boats. That is not our expertise," according to Smith

No doubt Trinity Yachts is looking to cash in on the huge high-speed catamarans that the military will be buying in the next few years. While Austal USA and Bollinger/INCAT will probably be building many of the vessels, Smith feels that Trinity Yachts with its fabrication capacity and expertise in aluminum will play a role in this market.

In the meantime, Trinity Yachts continues to make its presence felt on the World megayacht stage. The 2005 deliveries headed by the 180-ft. Mia Elise should convince an increasing number of U.S. and foreign multimillionaires that New Orleans is the place to build their dreamboat.