- April 2, 2014
Company. Offshore Sailing School Industry. Hospitality Key. Travelers are seeking learning experiences.
Each spring break, a group of M.B.A. students from Emory University's Goizueta Business School takes a trip to the British Virgin Islands.
But poolside parties and tanning on the beach aren't on the agenda. Instead, for $3,000 each, they'll be honing their leadership skills on a 50-foot sailboat. Taking turns being leaders and teammates on an unfamiliar boat is part of the curriculum of the business school's advanced leadership academy.
Running this team-learning program is one of sailing's most enduring couples, Steve and Doris Colgate, owners of Fort Myers-based Offshore Sailing School. The sailing school celebrated its 50th year in business last year.
The Colgates have survived the shifts in the economy, deftly maneuvering their sailing school, by delivering a skill that most people dream of. Their fast-track program promises to take you from couch to cruising on a 50-foot sailboat in only one week.
“We're selling vacation opportunities,” says Doris Colgate, CEO and president of the company she owns with Steve, chairman. While 30% of participants tell the Colgates they plan to buy a boat after taking a course, many rent sailboats for cruises in popular destinations such as the British Virgin Islands.
For example, a student who completes the company's weeklong “fast track to cruising” course in the sailing Mecca of the British Virgin Islands can captain his own boat from The Moorings, a well-established yacht charter company. “The Moorings is our largest referral,” says Doris Colgate.
Founded with a single sailboat in 1964 by Olympic sailor Steve Colgate, Offshore Sailing School now has eight locations and about 40 employees. Locations include three resort-based campuses in Captiva, Fort Myers Beach and St. Petersburg, two at Scrub Island and Tortola in the British Virgin Islands and three seasonal schools in the New York City area.
Over five decades, the school has taught more than 130,000 students, creating a core of alumni that spread the word and join in the company's flotilla cruises in places such as the Bahamas and the Adriatic Sea.
People who know the Colgates attribute their success to their involvement in the business. “They're super hands on,” says Tamara Pigott, executive director of the Lee County Visitor and Convention Bureau, who has worked with the Colgates to market the region.
Although Steve Colgate was a champion sailor, his easygoing demeanor makes beginners comfortable. “You'd never know he's this world-famous sailor who is uber successful in that world,” says Pigott, whose own staff participated in a team-building program with the school.
Business of sailing
When they started the business in New York City's harbor in 1964, the Colgates placed tiny ads in the New York Times to attract students. They were selling lessons by riding on Steve Colgate's fame as an Olympic and champion sailor.
Steve Colgate had borrowed money from his mother to buy the company's first two sailboats, paying her back as the number of students grew. Over the years, the company grew as the Colgates carefully managed debt and reinvested the proceeds into their fleet.
In the 1970s, the Colgates expanded outside of New York City by diversifying to warmer climes in the winter. Their first location in Florida was in Captiva, where the Mariner Group had built the South Seas Resort and was trying to sell condos.
At the time, the west coast of Florida was relatively undiscovered by tourists. But the Colgates started selling sailing courses in Captiva in 1975, filling up rooms at South Seas and providing prospective condo customers to the Mariner Group. Even today, Doris Colgate says the sailing school delivers the most room nights to the resort of any group.
In addition, Colgate designed his own 26-foot sailboat, which is manufactured by Precision Boat Works in Palmetto. Since 1999, the Colgate 26 has been used to train U.S. Naval Academy sailors. In fact, Offshore Sailing is delivering 12 new boats to the Annapolis military academy this month.
Although the Colgates don't disclose financial information, they say boat sales only represent 10% of the company's total sales. Most of their company's revenues come from selling courses and vacations.
But boat sales are a good indication of future vacation business. A major sailboat show in October in Annapolis was successful, and “2016 is going to be a good year,” says Doris Colgate. “An election year is usually a good year,” says Steve Colgate, noting generally stronger consumer spending.
Setting a new course
Sailors are high-end clients. Prices for a three-day course in low season start at about $1,600 per person and a four-person course in the busy season could cost as much as $10,000.
The average Offshore Sailing School customer is 55 years old, has household income of $190,000 and two-thirds are men. They're entrepreneurs, managers, doctors, professors and aircraft pilots, the Colgates say.
But the company has seen increasing diversity among its clients. “More solo women are taking our courses,” says Doris Colgate, who helped create the Doris Colgate Clinic and Cup at Edison Sailing Center in Fort Myers this year to train girls to take the helm. Colgate says the company used to offer women-only courses, but she says those aren't needed anymore because women travel independently now.
In addition, the younger generation of travelers seeks both comfort and education in their trips. “Millennials want meaningful trips,” says Colgate. For example, the Offshore Sailing School at the Scrub Island resort is a luxury 52-room Marriott on a private 230-acre island in the British Virgin Islands with a spa, restaurants and marina.
Corporations are spending again on team-building exercises like the one that Emory University offers its M.B.A. students. The stigma of corporations paying for luxury trips for their executives has worn off since the AIG scandal during the recession froze corporate travel. “It came back to us last summer,” says Doris Colgate, who is marketing to meeting planners.
Still, buying habits have changed since the Colgates paid for small newspaper ads 50 years ago. Today, 95% of the customers start their buying process through the Internet, though it takes them longer to decide. “They're spending much more time scouting,” Doris Colgate says. “It used to be you got the phone call and signed them up.”
Now, it can take months for customers to make up their minds. Offshore Sailing's in-house sales team may have to respond to numerous emails from prospective customers before making a sale. “Question after question after question,” Doris Colgate smiles.
Still, some things don't change. Doris Colgate asks each student who completes a course to fill out a paper questionnaire. She says students spend more time with pen and paper than they do filling out an online survey, which is how the company gathers testimonials and gains useful feedback. “I read every single one of them,” she says.
ONE OPTION IS ENOUGH. Sometimes giving customers too many choices will paralyze them. One option may be enough to close the sale. Listen to what the customer wants and give him your best recommendation.
MOBILE CUSTOMERS. Customers are making buying decisions using their cell phones, so be brief. “You want to cut right to the chase,” Doris Colgate says. “Picture what the customer sees on the cell phone screen.”
GOOGLE THEM. Know your customers so you can customize your services for them. In Colgate's business, she can tailor a vacation to customers' interests and time constraints. For example, a Google search may reveal they have children in school and they can only take a vacation during certain times.
KNOW YOUR COMPETITION. You may be surprised to learn that your competitors may not be in the same business. The Colgates recently found that they competed with other active vacations such as skiing, so they had to be competitive with those vacations, too. “If they're looking at sailing, they're also looking at trekking,” Colgate says.