Recreational boat industry fights sinking feeling
By RICK ALM
The Kansas City Star

Innovations such as more fuel-efficient engines and better steering systems will help bolster the industry’s sales, some insiders hope.

“Anybody that tells you that business is great is lying,” said Carl Johnson, co-owner of Sportsman’s Outfitter & Marine in Lee’s Summit. “We feel fortunate that 2007 was flat. And ’08 isn’t going to be any easier.”

While new boat sales in the U.S. — down to the smallest kayak and canoe — were up 6 percent overall in 2006, sales in the key powerboat segment were down almost 5 percent. And experts fear that figure could hit double digits when 2007 data is released in May.

Preliminary 2007 data released by the National Marine Manufacturers Association disclosed wholesale shipments of powerboat units last year were down 14 percent, with the dollar value of that inventory down around 9 percent.

That disparity tracks with a 10-year trend of generally declining unit sales but steadily rising consumer prices.

In 2006, the association calculated the average price of a new boat, outboard motor and trailer package was up 3 percent from 2005, to $26,085. In 2000, the comparable price was $23,606.

Despite recent softness, which may reflect a broader slowdown in consumer spending, there are still devoted boat buyers.

“We’re here to buy, if the price is right,” said Doloris Barnes of Independence. She and husband Elbert were at last weekend’s Mid-America Boat Show at Bartle Hall looking to upgrade from their 1989 model pontoon boat.

When the weather is right, they go floating almost every day to fish and swim at Lake Jacomo. “We’re retired,” she said. “We love it.”

At first they rented a pontoon boat for their outings but finally decided it was cheaper to own one, even with marina fees around $1,000 a year.

Price creep is only one factor in the current boating industry slowdown. Other factors are rising gas prices, the subprime mortgage meltdown that has tempered consumer spending, and broader concerns about a slowing economy.

The bottom line is that sales, at best, have flattened in recent years for the $40 billion-a-year recreational boating industry.

Sailboat production was off 5 percent in 2007, to 14,158 units, according to the annual North American Sailing Industry Study. The latest drop capped seven years of production declines.

Industry giant Brunswick Corp. reported 2007 revenues from boat and motor sales were down 6 percent, with actual boat unit sales down 10 percent.

Family cruiser and luxury boat giant MarineMax Inc. recently disclosed sales at the company’s 80-plus outlets fell 9 percent in the quarter ending Dec. 31. In an interview earlier this month with trade journal Boating Industry, MarineMax chairman William H. McGill said the numbers rivaled the industry’s recession of the early ’90s.

“While we have limited visibility into the remainder of fiscal 2008, initial results of the boat show season, industry data and our experience lead us to believe that marine retail sales have weakened even further.”

Notably, more boats are being retired than are entering service.

According to the latest figures available from the U.S. Coast Guard, private boat registrations in the U.S. fell to 12.7 million in 2006 from 13 million a year earlier. And registrations were reported down 7 percent through the third quarter last year.

Those numbers don’t count an estimated 5 million canoes, small sailboats and other non-motorized vessels in service that do not have to register.

Florida was No. 1 with 988,000 registrations, followed by California, Minnesota, Michigan and Wisconsin.

Missouri was No. 14 with 324,826, including a No. 12 ranking for 212,000 outboard registrations. Kansas ranked No. 35 overall with 95,677 total craft.

Any downturn in sales and registrations ripples across related industries like local marinas and repair shops, regional resorts, fishing lodges and other watery vacation spots that are mainstays of Missouri’s tourism industry.

The U.S. Army Corps of Engineers estimates 13 million people a year visit the corps’ 14 reservoir lakes in its Kansas City District alone.

“This area is blessed with water,” agreed Frank Svoboda, a sales manager for MarineMax, which has five Missouri outlets and is considering a sixth in the Kansas City area.

Manufacturers association president Thom Dammrich is trying to stay upbeat during the downturn.

“The Fed’s lower interest rates will help us,” he said at the January Kansas City Sportshow at Bartle Hall, one of 25 the association stages nationwide each year.

The show is the traditional kickoff to the local boating season, and at least some dealers said they were heartened by large crowds eyeballing the industry’s latest boat models and boating gizmos.

“It’s not on par with bumper years, but our sales were slightly up over last year,” said Bruce Crowder, a manager and a former co-owner of Bruce Marine in Kansas City who recently sold the business but stayed on in a merger deal.

Dammrich said product innovation will help pull the industry out of its tailspin. New twists for this year include more fuel-efficient engines and computerized joystick docking steering systems that are helping to spur consumer interest.

“There are sales out there,” he said. “There are people buying boats, just not as many as we’d like.”

Gordon Swindler of Hamilton, Mo., was at the Mid-America show to shop the new technology — and paint jobs.

Swindler bought a new personal watercraft at last year’s show, but said he is already looking to trade it in. Some of this year’s models, he said, are built 25 percent lighter for easier handling on the water.

He also was also looking longingly at ski boats. “They’re prettier this year,” he noted.

Dammrich acknowledged demographics may be working against the industry, with the aging of the baby boomer generation that has driven sales for 20 years.

But he said he was encouraged by the findings of an annual survey by the National Sporting Goods Association that found a 6.2 percent uptick in the number of Americans age 7 or older who participated more than once in a motorized boat activity in 2006. Dammrich said that number had been in annual decline from 1998 to 2005.

On the downside, however, that same survey found a 2.5 percent decline among those who fished in 2006.

Joann Austin already knew that. She and her husband, E.B. “Catfish” Austin, own Smithville Marine.

“I don’t see the new people coming into boating,” she said. “I think people are still outdoorsy, but families aren’t going to the lake on the weekends anymore. They’re following their kids to sports arenas … or might have overspent on a big home, two luxury vehicles in the garage and a big-screen TV.”

Austin said any extended downturn in the economy could drive a few more mom-and-pop boat dealers in Kansas City out of business or into mergers.

“There will be shrinkage,” she said. “They’re all good dealers, but there’s not enough room for everybody.”

Jim Rand, owner of Blue Springs Marine, doesn’t agree.

The family-owned store has been in business 48 years and has built a loyal clientele. “We’ve got customers whose grandpas bought from us,” he said.

And Rand said some of those soccer moms out there are becoming customers again.

He said one shopper the opening night of the Mid-America show told him, “We’re getting back into boating now that the kids are grown.”

The competition isn’t getting easier with the proliferation of big-box boat retailers like Cabela’s and Springfield-based Bass Pro Shops, and used-boat Web sites with search tools that can tailor a shopping list of nearby boats for sale.

Last week Bass Pro opened an Independence store, its second in the metro area and 49th in the national chain.

Each store shares floor space with sister firm Tracker Marine Group, which manufactures a variety of vessels under 10 brand names, including Sun Tracker, Nitro and SeaCraft. Tracker builds boats in four states, including Missouri plants in Clinton, Lebanon, Ozark and Bolivar.

Bass Pro claims to sell more boats than any other U.S. retailer, albeit smaller and less expensive models, but a spokesman said the privately held firm does not disclose sales figures.

Bass Pro doesn’t scare Rand. “They’re beautiful stores,” he said, and they expose more people to the outdoors, which is good for the whole industry.

“But I compare them to Wal-Mart,” Rand said.

“We don’t have stuffed animals and waterfalls like Bass Pro,” he said of his Blue Springs store. “But we’ve been here 48 years with the customer service and the industry expertise and the same people who will wait on you year after year.”

Interesting article.

I talked to the Chaparral rep at the boat show in Indy this year, he said attendance was down but sales were good. He said the people coming to the show are seriously looking to buy, v/s people just "kicking hulls" and thinking about getting a boat.

Not sure how much truth to it but he knew I had a boat and wasn't interested in buying, it was slow at his booth at the time and we were just bs'n.

Sales talk? Sometimes I think they say things like this over and over just so they start believing what they are saying.

The sales guy in the Marine Max booth at a recent show was bragging about them selling so many boats.

I wonder if he was one of the 5 salespeople that MM let go after the show concluded???

Declining boat sales generally results in declining prices.

That's good for those of us who are thinking of upgrading and don't HAVE to sell the old one before buying a new one.

^^^^^

That is a good position to be in.

As well as guys like me who recently sold their fishing boat in order to buy another one.

Cash in hand, looking for a deal...

That's a sad commentary.

Boats are well outrunning current inflation, and wages are stagnant in relation to inflation as well. People have to stretch that little bit of fun money as far as possible now. A $500 a month boat payment (and that's cheap) isn't in the cards for many, then tack on all the extra money it takes to run one. Boating will continue to decline. Probably tremendously within 2 or so years.

I agree.

But where will all the used boats go? Not to mention the new ones.

It's easy to store a set of golf clubs in the closet when you want to take a break from that, but a boat is a little different story.

Doesn't look good.

AVERAGE price 26K? I wasn't looking too closely at the outboard powered boats at the Utah Boat show, but I don't recall seeing an I/O for less than $26K, and the admiral is drooling over boats pushing $100K
Prices have gone out of sight. Just to change from my current 230 to a new X-30 would cost twice as much as I paid. Not in the cards.


Doloris and Elbert Must be from Missouri

I may be tooting my own horn a bit, but new boaters don't need to spend anywhere NEAR $26,000 to "get into boating" with a new, waranteed boat. They can go to any Bayliner dealer and buy what we bought, a fun bowrider that will seat 7, complete with dealer prep, bimini, covers, stereo, taxes, license and half a tank of gas and a trailer for less than $16,000. 10% down for 10 years, your payment is less than $175. And this boat gets 6 mpg at cruise speed, so it's cheap to use. Even insurance is relatively cheap.

But I do agree that boat prices have risen pretty quickly in the past few years. Our 175 for example, in 2003 it had a base price of $9995, the new version is $11,620. Still cheap, but a little calculator action shows an 11.6% increase, or 2.3% per year. Another boat I'm fond of, the Party Cruiser. 2006 boat show price: $39,995. In 2007 the redesigned it. (They succeeded in making it even LESS of a possible live-aboard than ever!) Price: $45,995. This year, the show price was $49,995. 25% increase in 2 years?! Yow...and this is boat built with very little 'oil'...!