Originally a lumber town and port, Saugatuck, along with the adjacent village of Douglas became a noted art colony and tourist destination in the arts and crafts movement of the late 19th century. In the early twentieth century, Saugatuck was home to the famous Big Pavilion, a large dance hall that attracted bands and visitors from across the Midwest. The building was a popular destination on Lake Michigan from its construction in 1909 until it burned down on May 6, 1960.
Today, tourists are drawn to the art galleries, harbor, marinas, scenery, unusual stores, the view from atop Mount Baldhead, and tourist attractions as well as Oval Beach on Lake Michigan, which enjoys a worldwide reputation. Nearby are Saugatuck Dunes State Park and Allegan State Game Area as is the city of Holland.
As of the census of 2000, there were 1,065 people, 549 households, and 265 families residing in the city. The population density was 893.6 people per square mile (345.5/km²). There were 928 housing units at an average density of 778.7 per square mile (301.1/km²). The racial makeup of the city was 95.21% White, 1.60% African American, 0.38% Native American, 0.94% Asian, 0.09% Pacific Islander, 1.41% from other races, and 0.38% from two or more races. Hispanic or Latino of any race were 4.32% of the population.
There were 549 households out of which 18.2% had children under the age of 18 living with them, 37.5% were married couples living together, 9.3% had a female householder with no husband present, and 51.7% were non-families. 41.5% of all households were made up of individuals and 12.0% had someone living alone who was 65 years of age or older. The average household size was 1.93 and the average family size was 2.62.
In the city the population was spread out with 16.8% under the age of 18, 7.8% from 18 to 24, 26.6% from 25 to 44, 32.1% from 45 to 64, and 16.7% who were 65 years of age or older. The median age was 44 years. For every 100 females there were 96.5 males. For every 100 females age 18 and over, there were 96.9 males.
The median income for a household in the city was $44,318, and the median income for a family was $64,583. Males had a median income of $46,161 versus $26,484 for females. The per capita income for the city was $34,382. About 6.7% of families and 11.5% of the population were below the poverty line, including 19.1% of those under age 18 and 5.4% of those age 65 or over.