Management class takes on millennial yachting

By Dylan Hart

When College of Business professor Stephen Diasio saw an op-ed criticizing the excess of yachting in the Jan. 20 edition of The Crow’s Nest, he knew it was the perfect opportunity to show how students in his class are challenging public perception.

“(The author) was following a common bias or common perception of the industry that may or may not be true, but it’s what my students are tackling,” Diasio said of the article.

He’s taught the class, Strategic Management/Decision Making, for four years and partnered with a different local business each semester. This semester, Diasio’s students are working with Navigare Yachting.

The perception may be that yachts are reserved for extraordinarily wealthy baby boomers, Diasio said, but as the baby-boom generation dwindles, the class’ student-driven research aims to help Navigare find a way to market to the millennial generation.

Navigare was founded in 2001 in Malmö, Sweden. The company has bases in Croatia, Thailand, Rhode Island and the British Virgin Islands, among others. It recently opened offices in St. Petersburg.

The packed class of about 38 students meets every Thursday evening. Students are split up into eight groups, each conducting their own research on the target market, the company, operational best practices and competitors. On Jan. 30, the groups presented their preliminary research to the class.

Some groups decided to pick names to accompany their pitch presentations. Some were serious in their emulation of a research and development company, like “Sixers Strategic Solutions Inc.,” while others were a bit more playful, like “Boats & Pros” or “The Leading Ladies +1.”

Collectively, the groups came to similar conclusions about the target market. Yachting is a growing industry projected to reach as high as $25.5 billion by 2027, and millennials may be a better consumer base than some may assume because of the rise of yacht chartering.

Instead of selling yachts outright, companies like Navigare give vacationers the opportunity to take one out for a short period, usually one to three weeks. Experienced sailors can crew their yacht, or more casual consumers can pay a bit extra for a crew to tag along.

But how can millennials — a generation perceived as broke and frustrated — afford to take a luxury boat out for a spin? Their misfortunes may be a misconception as well, the students found.

“Younger consumers are on the rise, since they’re much more frugal than their parents,” said presenters from the group Boats & Pros.

Millennials travel for 35 days per year, more than any other generation. With an average annual vacation budget of $4,500, some yacht charters may be within reach — although “luxury crewed” options still stand at over $14,000.

The challenge for companies like Navigare, then, is to make yacht chartering attractive enough for millennial consumers to spend their budget on a single trip. 

Yachting may be a good match for millennials, though. Students found that millennials prefer experiences over relaxation or sightseeing, and sailing a yacht may be a way to fill that niche — especially if supplemented with other activities. They also said millennials care more about the environment and experiencing culture than other generations.

Regardless, the biggest weakness of yachting is still its barrier to entry, the groups concluded.

The class plans to conduct more research and will turn in a research booklet toward the end of the semester detailing their findings. It’s an opportunity for business students to get real-world experience conducting business research and pitching their ideas.

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Written by: Dylan Hart on February 3, 2020.
Last revised by: Kat PiccoloFebruary 6, 2020.