Sovereign Boat Club’s 2nd Anniversary of Making Boats Affordable
Two years ago — just two months before the the COVID-19 pandemic hit — BoatTEST started a new division called Sovereign Boat Club (SBC) to create affordable shared access of boats. It started with one 27-footer (8.22 m), and now has six boats ranging from 24’ to 37’ (7.32 m to 11.28 m). The concept was to create a club with boats that could go offshore in comfort and safety for the family. All of the boats are equipped with hardtops, joysticks, electric toilets, chart plotters and all of the rest of it. Additionally, two have Seakeeper gyros and three have cabins below.
In some respects SBC is like other shared access boat clubs, but in other ways it quite different. SBC’s boats cost their owners from four to eight times more than the boats cost in mass-market clubs. It is directed to a much more upscale market for people who want to go 50 miles offshore to fish, or up and down the coast for overnight cruising. In essence, each boat is its own club and a business owned by the boat owner that is managed by Sovereign Boat Club.
It’s All About “Need”
Every new business is founded on a perceived need and when it comes to owning and operating a boat, there is more than enough “need” to go around. BoatTEST has been testing boats for 22 years and over that time had seen them steadily increase in price, out-stripping most boaters’ ability to save enough money to be able to afford one.
Rapidly Rising Boat Prices
Sterndrive boats in 2000, 30’ (9.14 m) or larger had an average price of $54,500. In 2020 it was $284,050 — a 500% increase in 20 years.
Inboard-powered cruisers 30’ (9.14 m) and larger in 2000 had an average price of $284,000. In 2020, the average price was $1,062,000 — nearly 400% more.
These skyrocketing prices were the result of inflation, new, more expensive technology, higher horsepower engines and company overhead spread over fewer units. With rising prices, boats cost more than most people can afford.
In the last 20 years, sales have dropped precipitously. In 2000, 2,500 sterndrive boats and 9,400 inboard-powered boats longer than 30’ (9.14 m) were sold in the U.S. In 2020, those numbers had dropped to 950 and 1,430, respectively, for sterndrive units and inboard cruisers. That’s a 62% drop in sterdrive-boat sales and a 90% drop in inboard cruiser sales longer than 30’ (9.14 m).
The Little “Secret” That Makes it All Work
The “secret” is rarely mentioned by the boating press, boat builders or dealers, but according to the industry association, the average American boat owner uses his boat only 25 days a year. And boat owners themselves do a good job of keeping the secret as well.
So with so little use of a boat, ownership of one in Florida — which has nearly a year-around season — is a financial extravagance that increasingly is hard to justify. That’s why “shared access” makes economic sense, just as it does for Net Jets, AirBnB and hotel condominiums. It’s little wonder that “shared access” is one of the megatrends of the 21st century.
Florida boat owners typically use their boat two or three days a month, 10 months a year. The rest of those days the boat sits idle.
Experienced Boaters Want to Go First Class
Once a boater graduates up to 30’-plus range, he or she knows enough about boats to want the creature comforts that the boating industry has been building into their vessels the last 20 years — things like joysticks, GPS chart plotters and expensive drive systems are just the start of it. Further, potential boat buyers of this caliber want to head offshore and not be limited to protected water locations such as lakes and rivers.
They also want a quality-built boat, which costs a lot money. Premium boats in the 27’ to 37’ (8.23 m to 11.28 m) range including center consoles, dual consoles or crossovers with twin or triple outboard engines typically cost from $200,000 to $550,000 depending on size and equipment, plus tax.
Advantage for SBC Members
- No 20% boat loan downpayment
- No annoying credit checks
- No long-term financial obligations
- No loan payoff short-fall risk
- Expert boat handling training
- Offshore-capable boats
- No waiting lists for use
- Full-day usage, even on weekends
- Joystick and electric heads
- Overnight cruising permitted
Sovereign Boat Club is a Win-Win
Sovereign Boat Club’s motto is “Making Boats Affordable.”® That means affordable for the members and the boat owner through a “shared access” program that is promoted and managed by SBC. The boats are also managed by SBC, which is another big bonus for the boat owners and the members because they are both saving more than 100 hours of management time annually.
SBC currently has 5 full-time boats and one seasonal vessel in its fleet. Four of the boats are located in the St. Pete area, one in Bradenton/ Sarasota and one in Riviera Beach, FL. Each boat is owned by a different individual. All receive from SBC a large portion of the monthly maintenance fees so they can cover their operating expenses.
The amount of income the boat owner receives depends on how many members there are in his/her boat. Typically, after the first six months of promotion there are enough members to pay the boat’s annual operating expenses. With more members, depreciation is mitigated and with full membership, there is positive cashflow on the asset.
Not a New Concept
SBC’s program offers a shared access, “bareboat” (i.e. no captain), similar to bareboat charter companies in the British Virgin and other places. Bareboating got started in the BVI in the mid 1960s. In most cases the individual boats in the charter fleets are owned by boaters who have made the investment for income — and two weeks free usage a year. The companies that are in business today, such as the Moorings, have been successful and their owners are generally happy.
The advantage of the Sovereign Boat Club is simply that the owner’s boat is nearby and does not have to be used two weeks at a time. It can be used whenever the spirit moves for a weekend outing or entertaining during the week.
12-Month Club Agreements
The only way to realistically cover annual expenses, mitigate depreciation and have a chance of achieving positive cash flow is to stay with the SBC program for five years or more. This is the typical amount of time that the bareboat charter operations contract for their boats. SBC, however, only asks for a one-year agreement, with the provision that all members will be given their 12 months agreed usage of the boat if the owner plans to withdraw it. In two years no owners have withdrawn.
A Six-Month Winter SBC Boat
One of SBC’s six boats is only available in Riveria Beach, FL, from Nov. 1 to April 30th. The Edgewater 370 is owned by a gentleman in the Northeast who uses the boat in the summer and then repositions it in the winter. He flies down to use it a few times in the winter. The rest of the time SBC finds and sells the members, trains them, handles the reservations, oversees the maintenance of the vessel and helps with other details such as billing. A Siren 3 Pro helps monitor the vessel 24-7.
Because this boat is only available for six months, the owner can cover his operating expenses with the eight members in the boat. Because this Edgewater 370 CC is equipped to the nines, is so big and robust, has a Seakeeper and cabin and full head below, it is in demand. Typically, people sign up for this boat in the summer to be sure of getting one of the 8 permitted memberships.
The Price of Living the Boating Lifestyle
Of course none of this comes cheap. We are not talking about pontoon boats. SBC’s premium brand boats are typically the most expensive in class and are loaded with amenities. Due to lack of slips and rack storage, prices have gone up, as have insurance and maintenance. Further, providing a first-class boating experience is labor intensive for the SBC back-up team.
Membership Costs of Each Boat in the SBC Fleet
BOAT LOCATION LOA ANNUAL DUES MO. MAINT/PYMT
Everglades 235CC St. Pete 24 $5,795 $525
Pursuit DC266 St. Pete 27 $6,495 $609
Robalo R317 Bradenton 32 $7,650 $640
Regal 33 SAV St. Pete 33 $9,995 $870
Regal 33 SAV Tierra Verde 33 $9,995 $870
Edgewater 370CC* Riviera Beach 37 $10,557 $1173 (6 mo)
*6-mo only.
Seasonal memberships for snowbirds are available in most of SBC’s boats.
Typical “All-Up” Cost of Boat Ownership
Today, most people finance their boat purchase, which adds another layer of expense to the enterprise. The two examples above show the actual cost of ownership, taking into account annual operating expenses (ex fuel), and finance charges over a 5-year period.
As can be seen, the average cost of owning the boat ranges from $65,140 for a $200k boat to more than $100,000 per year for the $400k boat. At the end of five years when the boat is sold, the owner will have parted with from $300k to $500k and no longer has a boat.
The total of annual cost of memberships in SBC’s five boats, ranges from $12k to $20k — 18% to 20% of the cost of ownership. (The savings is enough to send children or grandchildren to college.)
That’s why we say that being an SBC member is just like owning your own boat — only better.
Close Relationships with the Members
The Sovereign Boat Club is a small, intimate club where the principals interact with the members and owners on a weekly basis and daily if wanted. Club policy is to give every owner and member thorough education in handling and operating the chosen boat. That goes for the spouse and any other family members older than 18 who will be operating the boat as well.
The club rules are structured to maximize everyone’s enjoyment of the boat and the boating lifestyle. That’s why SBC members can reserve full days even on weekends, can operate out to 50 miles offshore and can cruise up and down the coast overnight.
Come See Us at the Miami Boat Show
Sovereign boat club will be sharing a booth with BoatTEST at the Herald Square in-water venue on the Miami side at the Miami International Boat Show next week. BoatTEST’s Capt. Steve will be on hand to answer questions.
For more information about SBC and its boats, click here…
