|Boating in 2011|
Table of Contents:
When people talk about the boating industry, it is important to understand what they mean. It is a richly diverse and segmented group of mostly small businesses. The industry includes everything from new boat, engine and accessory manufacturers and dealers to marinas and service yards, to tourism, Internet sites, yacht clubs, and other non-proﬁt organizations like the U.S. Power Squadron, the U.S. Coast Guard Auxiliary, the Black Boaters
Club of America, and the National Marine Manufacturers Association (NMMA). There are an estimated 30,000 businesses in the United States dedicated to serving new, experienced, and even prospective boaters.
So when it’s said that the boating industry was hard hit by the recent recession, it’s partially true. There are 12 million registered boats in the U.S. and one-quarter are in the Great Lakes. Ninety-ﬁve percent of the boats in the U.S. are less than 26 feet long and are trailerable. Less than 1% of all boats in the U.S. are larger than 40 feet.
Combine that with the fact that 75% of all boat owners have a household income of less than $100,000, and you can only conclude that boating is predominantly a middle-class, American pastime. Sure, there are millionaires in boating. But too often this activity is characterized as something only the wealthy can afford. And the facts just don’t support that.
The NMMA estimates that 66 million Americans, or 28% of all adult Americans, went boating in 2009. With the excellent summer weather most of the country experienced in 2010, and based-on some anecdotal feedback, I am conﬁdent that when the industry’s studies on 2010 boating participation are complete, they’ll show that even more Americans went boating in 2010.
This huge base of 17 million boats and 66 million boaters is the real strength of the boating industry. If you were one of the thousands of small businesses in the boating industry serving boaters, business has been pretty good. In the past 3.5 years, it has been new boat and engine manufacturers and dealers who have been hit the hardest. But, as the numbers above conﬁrm, it is not because the desire to go boating has diminished during the recession. In fact, while new boat sales at retail are down 55% nationally since 2006, sales of all boats (including new and pre-owned combined) are only down 15% during the same time period.
And those numbers are beginning to change. In 2008, demand for new boats plummeted and dealer inventories measured in months of sales soared to unprecedented highs. Repossessed boats ﬂooded the market with fairly new, pre-owned boats. Bargain hunters snapped up these boats during the past two years. For more than a decade, pre-owned boat sales represented about 72% of all boat sales. However, in 2009, pre-owned boats represented 82% of all boat sales.
At the close of 2010, boat dealers’ new boat inventories were at record lows. Repossessed boats have been fully absorbed. Business failures have ceased. Manufacturers have seen production numbers increase 50% to 60% above 2009’s historic lows. The availability of pre-owned boats has declined. And manufacturers are developing new boat models with features and accessories that are not available in the pre-owned market. It is expected that all of these boosts, combined with improving economic numbers, will lead to recovery of the new boat segment of the industry in 2011.
Already there have been signs of improvement. Sales of new aluminum boats and outboard engines were up in 2010. There has been a strengthening of sales in all types of boats under 30 feet. Recall that these boats represent 95% or more of the total market.
Another indication of a coming improvement in new boat sales is that consumer conﬁdence is trending up, though it remains at historic lows and the upward trend is coming in ﬁts and starts. The gross domestic product (GDP), though growing weakly, has been rising for ﬁve consecutive quarters. Auto sales are reporting year-over-year gains, and new boat sales typically track alongside new car sales. In spite of lingering high unemployment, economic momentum is positive. All of these factors point to increased sales of new boats in 2011.