This is how much sailing yachts cost.

[Eric W. Sponberg]

Over the last five years, I have been tracking the costs of new production and custom sailing yachts as published in the US in some of the major yachting magazines. With over 150 boats in the database, I studied cost against various design parameters and found that cost plotted against length or displacement showed the clearest trends. Length is a better determinant than displacement, showing narrower divergence. For what it is worth, I post the graphs here.

Eric

[Crag Cay]

Very interesting.

Your middle fit line on Cost/Length graph supports my assertion that boats double in price from 40 to 50 feet (360000 to 729000 USD).

Do you have any theories on how to make clients understand this? I'm sure the graphs will help, but I've found my cautionary advice is never as powerful as a wife's plea for a little more space in the galley / heads / lockers or his 'need' for a larger wheel, etc.

[Alik]

What if we plot (Cost/DISPL)=f(LOA)? I mean how the cost of 1 kg boat changes from length.

I used to tell the customer: we increase the length by 10%, the cost increases 30%. i.e. proportional to displacement. This is rough explaination. But sometimes the principle does not work if equipment is same :)

[Raggi_Thor]

Interesting indeed!
I did a simmilar comparision a few years ago and found that sail area was an important factor. It costs more to build a boat light and strong with a heavy keel and large rig.

[Eric W. Sponberg]

Alik and Raggi_Thor,
I calculated Cost/pound and Cost/foot and plotted them against lenght and weight, and the data scatters all over creation--there are no recognizeable trends. Cost vs. Length and Cost vs. Displ. are the only parameters to see changes and trends clearly.

I also see and have known for a long time that a lightweight boat is more expensive per pound than a heavy boat because of the extra engineering involved, the extra care and talent required (higher hourly wages for the workers), and the more expensive materials needed. So a lightweight boat will be on the high side of the Cost vs. Displ. curves.

Crag Cay,
Most design clients don't have a very good idea as to how much a new boat will cost, and most have dreams of boats that are far beyond the sizes their wallets. That was why I started this study and plotted the results. I just posted an article on my website that discusses yacht design and construction and how the process works. I also address costs, using these graphs, and point out place where money can be saved. You can get to the article at www.sponbergyachtdesign.com, and click on "The Adventure Starts Here...." at the bottom under the photos of the boats.

Eric

[Crag Cay]

Most design clients don't have a very good idea as to how much a new boat will cost, and most have dreams of boats that are far beyond the sizes their wallets.
That's a relief. I thought mine were singling me out for torment.

[Guillermo]

Eric,
If I'm not wrong, there's a minor mistake in the COST/DISP curves, as at the formulas at the top, cost appears as a function of LOA instead of Displacement.
Cheers

[Eric W. Sponberg]

Eric,
If I'm not wrong, there's a minor mistake in the COST/DISP curves, as at the formulas at the top, cost appears as a function of LOA instead of Displacement.
Cheers

OOPS!

I had to add the labels separately, and forgot to change the major variable!

Here is the correct graph!

Thanks for catching that Guillermo!

Eric

[MikeJohns]

Eric

LOA is often misleading in the glossies, displacement is a good indicator.

There are presumably other factors at work here. The larger vessels will be aimed at a more sophisticated market than the lower end of the size range.

Looking at the used boat prices I often think the new prices for bigger boats are a bit over the top. I find it interesting that a new boat that currently sells around 1 million can be purchased for a third of that price when only a few years old but still in pristine shipshape condition.
It seems there is good market targeting at a certain sector of society with vessels that attract less interest from the ‘saltier’ used boat fraternity. Particularly when looking at boats aimed at the pretentious fraternity that simply want a floating condo.

Many smaller boats will be budget oriented and competing with a strong used boat market as well.

Always interesting to see what they fetch on the used boat market. I think it is a good indicator of base value to sale price.

cheers
Mike

[Ari]

Eric

Looking at the used boat prices I often think the new prices for bigger boats are a bit over the top. I find it interesting that a new boat that currently sells around 1 million can be purchased for a third of that price when only a few years old but still in pristine shipshape condition.
It seems there is good market targeting at a certain sector of society with vessels that attract less interest from the ‘saltier’ used boat fraternity. Particularly when looking at boats aimed at the pretentious fraternity that simply want a floating condo.

Many smaller boats will be budget oriented and competing with a strong used boat market as well.

Always interesting to see what they fetch on the used boat market. I think it is a good indicator of base value to sale price.

cheers
Mike
Mike,
In certain group of buyer it is tougher to sell a product at very low price and low profit margin, they won't buy. Normally the price need to be jack up a few times to make sales.The sales section study throughly the potential client market, data likes buying power, the needs,the dream, image carrying,the return from investment -ROACE return on actual capital employed, is very important to all coporate figures, this what sell the product, this very same datas are not important to certain type of buyer, normally in the lower profile group of targetted buyer.Knowing this very well..normally top of the line for any product will have a very big pricing gap with the one slightly in the lower rank.When come to used or pre owned market the product pricing is much more realistic.

[Eric W. Sponberg]

I have found that length overall is actually a pretty reliable number, both in the magazines and when talking to clients--That is the one dimension that can't be hidden, and the one that people refer to most consistently and reliably when discussing a new design. Displacement can vary quite widely--is it the displacement at design, lightship, racing trim, full load--who knows. And designers and builders tend to keep their weights a moving target. So I always take displacement with a grain of salt.

The market will always pay what it thinks a thing is worth, regardless of its actual worth. I remember about 10-15 years ago, a very well known builder was marketing its brand new powerboat at the Newport Boat Show where it was a real hit. Customers were literally lining up on the dock to put down deposts. For each successive buyer, the sales people jacked up the price by $10,000, and people were paying. The boat certainly did not gain that much in hardware or labor just sitting there, but it kept selling nonetheless. The boat still sells for a ridiculously high price, and there is not that much value in it.

Until this country does something about recycling its old boats, old boats will always compete against the new boats. And there seems to be a hint of interest across the continent to do something about it, but it will take at least a generation before the necessary infrastructure is built to handle it.

Eric

[marshmat]

It's interesting to note, Eric, that your regression curves for Cost/LOA are all somewhere between 3rd and 4th power functions, while I would have expected a simple 3rd power relationship. To me, this seems to confirm that big boats are not only larger, but tend to be fancier than small ones. The huge cost spreads in the bigger sizes seem to bear this out too- a very significant portion of the cost of many big yachts appears to be not boat, but luxury within it. For instance a 27-foot daysailer might have veneer-over-pressboard cabin work, while a 70' yacht would be more likely to have solid Honduran mahogany or some other fancy, labour-intensive interior.
I'm curious what the million-dollar 21-footer was!

[MikeJohns]

In certain group of buyer it is tougher to sell a product at very low price and low profit margin, they won't buy. .............

Ari
I took a few marketing units at Uni 10 years back , some of the case studies were quite surprising ,some cars for example didn't sell until they added 40% to the price and targeted a wealthier sector. Funny what motivates people.


I have found that length overall is actually a pretty reliable number........................
Eric

I think the NA's LOA is often not the marketers LOA, theres all sorts of extraneous overhanging gear that can find its way into the marketers LOA.
LWL and D always give me a much better idea of a boat .

Interstingly on your displacement comments don't you find that new boat marketers often tend to err the light side when it comes to displacement ? since it gives them better ratios (and often these days a better stability curve). I agree displacemnt is a bit nebulous but the scantling design displacement is a very good indicator of how much material has gone into the hull.

When it comes to the used boat market the descriptions of LOA are wild exageration . One case went to court here when the interstate prospective buyer sued the broker for the hardstand and survey cost when the advertised 65 foot vessels turned into a 55 foot vessel with a bowsprit and davits. They lost the case as the court accepted confusing practice on marketing of LOA and caveat emptor. So you can see why I wince at LOA .

Cheers

[Guillermo]

Maybe LOD would be a better, and still easy to know, indicator?
Maybe LH, as per the RCD. It's becoming of widespread use troughout Europe.

[Eric W. Sponberg]

The million dollar 21'er was a typo--should have been a 51'er, and that puts it just inside the red line. Sorry about that.

As for LOA, in the charts, the only thing I had to rely on was the published LOA, the marketers' LOA, for whatever it is worth. If the boat does have a long bowsprit or anchor platform, then you might see LOA AND Length on Deck, LOD. Certainly in dealing with clients for potential new boats, the one thing they really know is LOA, which is the net length of the hull. The second thing they know is draft, usually they want 6' or less of draft. All else is a little fluid, whatever it takes to make a comfortable boat that performs well.

You are right that the published displacement is more often much lighter than the actual displacement, whenever I have been able to investigate further. Certainly this was true ten years ago in the open classes for round the world racing. One never sees scantling displacement published, and it would be quite time consuming to try to track that down for each and every design. I had to rely on published data.

Eric

[Eric W. Sponberg]

Both graphs have been corrected in this post, thanks very much to the watchfull eyes of the readers, thank you. Here they are again, together.

Eric

[PFalcon]

http://www.sponbergyachtdesign.com/Adventure.htm

A VERY detailed, insightful, informative read! I recommend it to anyone!
It was not too long to enjoy on the laptop. I loved it and your designs!

The prototype home you designed at Flagler Floating Homes, is a very clean and complete design. What a great view to the ICW.

[Eric W. Sponberg]

PFalcon,

Thank you for the compliments, glad you enjoyed the Adventure article.

The Flagler Floating Homes on the website are the first two prototypes, and I am in the middle of the first custom home that will be the next one built. Now that we have the construction process down, we can look a variations in architectural design to inject some variety into the concept.

The floating homes cost a lot less than a typical yacht of the same length, plus they have a lot more room to boot! The reason is because the construction is basically square, very simple design, typical household construction and finish (although the house is anchored to the barge with steel tie rods), and no installed power. I don't think we're going to have too much trouble selling them--a home on the water for less money than a yacht, and for less than just an empty lots costs on the waterway.

Thanks again,

Eric

[Saf]

Eric,

For how many years have you been a naval archi?

[Eric W. Sponberg]

Since December 1971 when I graduated from the University of Michigan in Naval Architecture--35 years! I have been operating Sponberg Yacht Design since August, 1978, 28 years.

Eric

[MikeJohns]

Ah, Eric you look so young, I took you for a whippersnapper I'm sorry to say !
Happy that you are an irrascible old greybeard too:)

On the subject of boat pricing
Dick Koopmans website ( http://www.dickkoopmans.nl ) has the attached cost breakdown . The red line is the total amount, each addition is incremental to the trend line below it.

On Dick's graph the internal fitout makes all the remaining costs look exponential but looking closely they are increasing close to a linear relationship to length.

It concurrs with my experience that hull,motor, rig deck gear costs are almost linearly related to length while the time taken for interior fitout adds the exponential factor.

Cheers

[marshmat]

Very interesting, Mike.
Looking at these various data sets leads me to believe that luxury does tend to go up with length, at least in typical yachts. I'm really starting to like the big-and-simple thing: no teak, no foreign leather, just a good strong roomy boat without any of the $$$ luxury extras.

[Ari]

Very interesting, Mike.
Looking at these various data sets leads me to believe that luxury does tend to go up with length, at least in typical yachts. I'm really starting to like the big-and-simple thing: no teak, no foreign leather, just a good strong roomy boat without any of the $$$ luxury extras.
It depends..if your boat are build from teak timber..than teak will be everywhere on board.Once upon a time that same teak is not a luxury item, it's a need.Mine build from Chengal and Resak wood/timber.So those wood will be everywhere on board. Luxury item for me is to have all those special metal alloy, even marine grade alluminium is very expensive to me,carbon graphite, kevlar, very advance sail and mast material, USD15K stove,etc. A boat hull and cabins actually is not what caused the cost to shoot up, it is the material and equipment that we add in later to make life more easier and enjoyful or to show off to the others is what make the cost to shoot up. A cargo boat with basic cabin will cost about 60 % less than a same size pleasure yacht.

[Eric W. Sponberg]

Mike,

Thanks for the curves from Dick Koopman. His total seems to closely follow my blue trendline in the lower size range. The hull/deck and interior costs, both about 17% of total, closely follow what I typically figure in cost breakdown, which is generally around 20%.

Ari points out that there are variables all over the world, and it is sometimes hard to establish absolutes. This is why I always advise clients that they really have to know a foreign region, its people, and its resources pretty well before they go build a boat there.

Eric

[yipster]

I'm really starting to like the big-and-simple thing: no teak, no foreign leather, just a good strong roomy boat without any of the $$$ luxury extras.
the philosofie goes to some extend
f.e. think i wouldnt mind having a chesterfield sitee
but not a leather ( attracks mildew )
my new boat: practical AND comfy but WHEN :(

[CDBarry]

You may want to check cost vs. international gross tonnage. (Approxiamately cubic number.)

Manhours/compensated gross tonnage (compensated by ship type) is a standard measure of shipyard productivity.

[Eric W. Sponberg]

Gross tonnage is never published in listings of boats or their designs, so it is not a readily available number on which to rely.

[bertho]

interresting thread.. ( always moneymoney..)
boat go by cubic if i'm not wrong, double the LOA will increase the weight much more than double, you can do cost per kilo! like patatos ! expected than if you have a lot of room, you will fill the box with expensive stuff..
did you see the ratio on industrial production as beneteau.. cost for hull and deck 15% of the total cost of the finish product ! same as the commercial cost! ... many people look after the hull/deck and thing the ''remaining detail'' will never cost more than the hull !! expensive error!
rgds
bertho

[Ari]

interresting thread.. ( always moneymoney..)
did you see the ratio on industrial production as beneteau.. cost for hull and deck 15% of the total cost of the finish product ! same as the commercial cost! ... many people look after the hull/deck and thing the ''remaining detail'' will never cost more than the hull !! expensive error!
rgds
bertho
You are right there..to own a boat is not really expensive..to own a luxurious boat..yes..it is expensive.Bottom line is..how much do you want to spend..!

[brian eiland]

Regrettably my internet service was down all day so I've not had a chance to read your new site addition yet Eric. I will make a copy now that service has returned and read it tomorrow.

Meantime I thought it might be applicable to look at the 'cost breakdown' of building a yacht. I've drawn up a rough outline of such a Boat Building Cost Chart, and would welcome all input as to recommended modifications and/or additions.

I think such a chart might be of assistance in determining the possible savings one might expect to see in a cheaper labor market, by dividing out the labor verses materials and equipments equations

[Guillermo]

Gross tonnage is never published in listings of boats or their designs, so it is not a readily available number on which to rely.
You're right, but maybe you could use the Cubic Number (L*B*T). We use this to figure out costs/value for fishing vessels in a first design stage or when appraising, based on a similar vessel's cost. It works. Maybe it could work here too.

[Eric W. Sponberg]

Guillermo,

For what it is worth, I plotted Cost vs. LBD and attach the plot. It does give a reasonable trend which might be of use to some, although the scatter is similar to Cost v. Length or Cost v. Displ. LBD is related to Displacement so one would expect a similar sort of plot. The trouble with using Cost v. LBD in a cursory way is that you have to calculate LBD for any given vessel before entering the plot, and LBD is harder to visualize than simple Length or Displacement. Also, to be more accurate and more indicative of the volume of the vessel, one should use Lwl x Bwl x Draft, or Loa x Boa x Depth (preferred, I think). Unfortunately, Bwl and Depth are almost never published, so the data is not readily available. Within one design house or for a single manufacturer where this data is readily available, then it could be quite useful.

Thanks to Brian Eiland for your chart. You and I have talked about it in the past privately. For building in a cheaper labor market in a faraway place, one should include the cost of monitoring construction which is a real and direct cost. As I mention in my article on my website "How to commission a yacht design and have it built", not every design detail and spec can be covered in the design documents. Many things are left up to later decisions on the shop floor. And human nature being what it is, we all make mistakes, we change our minds, and we think of improvements along the way.

These all have impacts on other parts of the design, and decisions have to be made to build the boat correctly, on time and on budget, or as closely thereto as possible. That requires that the owner, his/her naval architect, and/or the project manager be on site to handle the decisions. To be there costs money, real money added to the cost of the project, and oftentimes this comes out to more money than is saved by cheap labor.

One also has to think of equipment, and locations of cheap labor do not necessarily have sources of the proper grades or brands of equipment. These have to be imported to the locale, and that too adds to the overall cost.

Every boat building situation is different and should be analyzed accordingly for the best possible combination of cost, time, and quality. That, as I say in my article, is part of the adventure after all.

Eric

[Vega]

I have been looking for prices of boats for sometime, and it seems to me that The Koopmans look pretty accurate to me, but I don’t think it applies to the majority of boats sold in the market (up to 50ft in length).

Koopmans’s boats are expensive, with very good interiors. I think that those prices apply to the Top of the range production boats (Halberg-Rassy, Najad, Southerly, Island Packet, Malo, Arcona, Cabo Rico etc.).

It seems to me that custom boats cost a little bit more (including the project), but I believe that most of the boats sold in the market are Beneteau, Dufours, Jeanneau, Bavaria, Hunter, and the like, and these cost a lot less than the average in the graph.

[Eric W. Sponberg]

Hi Vega,

The data in my spreadsheet includes many production boats sold in the US, including Halberg-Rassy, Najad, Island Packet, Cabo Rico, Hunter, Beneteau, Jeanneau, Bavaria, Oyster, Moody, Kanter, J-Boats, Tartan, X-Yachts, Catalina, Caliber, Cigale, Shannon, Hanse, Morris, Santa Cruz, Pacific Seacraft, Amel, Wauquies, Saber, and Saga, to name most of them in no particular order. So there is a full range of quality and price, production and custom in the list.

Eric

[Vega]

Hello,

Eric, I think that I was misunderstood. By the way, I have appreciated your Graphs. It is an interesting piece of information and thanks for making it available.

What I mean, is that if you take the number of all boats from each brand sold in the USA last year, the number of Cigales, Santa-Cruz or Cabo-Rico, is minimal regarding for instance the number of Beneteaus. I do not know well the USA market, but probably, Bavaria, Hanse, Hunter, Beneteau Group and Dufour have probably sold more boats than all the others put together (and those are relatively inexpensive boats). What I mean is that this is not showing in the graph, regarding the average price of a boat.

[Guillermo]

L*B*H (Not T, or D in your notation, sorry) takes into acount the total volume of the circunscribing parallelopiped to the upmost continuous deck, not to floatation. It works well only when comparing quite similar vessels, this is, of the same type and not very far away dimensions.

Thanks for the plotting you've done with this. Dispersion is quite the same than for the other data, as you state, so of not better use. I agree with you that not having better data, LOA is the easiest way of facing the issue.

Anyhow, could it be possible (and useful) to categorize your boat's database packaging boats by types (or qualities) to try to find out if dispersion is less?

[Stephen Ditmore]

As Guillermo knows, I've been writing a fishing boat optimization spreadsheet based in part on the work of my teacher, Cyrus Hamlin. Cy always used CUBE (cubic number = LWL x Beam x fairbody depth amidships), as the dimensional corrollary of hull/deck construction cost, and in early versions I did the same.

More recently I've been using:

(LB + LD + BD) * Displ^(1/3) * 1.275

where:
L = LWL
B = Beam (max)
D = fairbody depth amidships (rabbet to top of deck at side)

This is derived from the surface area of a box of these dimensions, which would be:

(LB + LD + BD) * 2

Since static pressure and therefore panel strength/thickness vary with displacement, I multiply by displacement^(1/3). The result scales as a cubic value. Since the result gets multiplied by a cost per cubic unit factor anyway, I changed the constant, 2, to a value that would give a similar result to the cubic number for the heavy displacement fishing vessels I was considering (allowing me to use the same cost per cubic unit factor).

Do you see any problem with doing it that way, Eric?

[Alik]

[QUOTE=Stephen Ditmore;112175]
...
This is derived from the surface area of a box of these dimensions, which would be:

LB x LD x BD x 2

...
[QUOTE]

But why 'area' is cubic from this formula?

[Stephen Ditmore]

Oops. I made a mistake, Alik. I've now edited my previous post so the expression is correct. It's a sum of areas multiplied by displacement^(1/3). The logic is that, when buying material, it's a sum of the areas you are generally using. Multiplying the sum of the areas by displacement^(1/3) makes the result cubic.

I've read several places that doubling the freeboard adds less cost than doubling the length. That made me think there was something not quite right about CUBE = LBD as the function correlating with cost.

There are some previous postings that I'm still reading through. If I have not yet understood something said previously, please forgive.... I'm working on it.

Retired U.S. Naval Academy professor Bruce Johnson has tried to persuade me I should be using T instead of D for fairbody depth. I've been using D because the versions of ABS I've used use upper case D for depth, and lowercase d for draft. T means time to me.

Cheers,
Stephen

[Eric W. Sponberg]

Do you see any problem with doing it that way, Eric?

Stephen,
Your formula probably has some merit. The overall dimensions LB, LD, and BD, necessarily set the equation to rectangular areas, which is then influenced by the multiplier 1.275. To my thinking, I would probably put some kind of block coefficient into the equation to reflect actual surface areas, and then I might expect the multiplier to go up. If you seem to get reliable trends with your collected data, then it probably works. The point of the exercise is to have a reliable estimating tool for future boat designs, so that you can estimate closely what a boat will cost based on arbitrary given numbers.

Vega,
You are correct, my graphs do not reflect the average prices of boats over the whole population of boats on the market. It is nearly impossible to get those numbers, and I would suspect that the data would be pretty suspect, biased, and not at all uniform. But that is not the point of my graphs. What I want to show is the variance of price to boat size for one example each of each design using overall and readily available dimensions. It goes so far as to include boats from all over the world, both custom and production. As one would refine the data, for example, doing custom boats and production boats separately, one might find a further refinement and narrowing of the graphs.

Eric