The future of boating

[wbc1957]

Okay guys, it's winter and we have plenty of time to spend thinking of the coming boating season. I have posed a question in THT which should be offered here, as well. There is plenty of experience on this forum for input. Here is the post:

As we all have witnessed, the number of boat brands has dropped and the size of the boat shows are reduced. The economy is not going to get better for many years down the road, which is clear to see with the housing market still not hitting its bottom yet. Boating is a discretionary spending item, not a necessity, although many of us would disagree. As more boat manufacturers close their doors, what do you think will be the key for those remaining? And for the parts suppliers? Keep in mind, businesses stay in business to make money, not for keeping us on the water. Supply and demand issues and down time while waiting on parts issues, may be common. And the most worrisome issue may eventually be the buyer who perceives that his new boat purchase could be bad, due to a future with a builder that may not be there for the whole warranty period. I am asking for your thoughts related to this, and ask that you consider your position both currently and then as it would look five, ten, and twenty years down the road. I include these intervals because of people's planned purchases, and their past history of stepping up to larger boats as their hobby continues. Your thoughts...

 

[kmarine]

Re: The future of boating

If you look at from a short term perspective there is always a concern for uncertanty. I am happy to say that I am not selling new boats for a living. And yes the econemy has rippled throught every industry I am aware of. As a long term look, most of the engines are prudiced by a few strong companies that have weathered the storm before. Parts are available from both factory and aftermarket sources allong with salvage possibilities due to supply and demand.

People have been boating for thousands of years. There are many die hard boaters who will make boating a priority. Boating will continue and may become as popular in other countries as it is in the USA. People will find entertainment value in boating. I see people buying more fuel efficient boats. I find that many people with summer homes are burried by their property tax bill. As a result they will keep the boat they already have, not buy new.

 

[dingbat]

Re: The future of boating

I hate to say it, but sooner or later boating is going to be a sport for the rich and famous like it is in most other parts of the world. Go over to Europe where gas is $5-7 gallon and see how many 19? power boats you see being towed around the Continent.

When gas went to $4 a gallon here a couple of years back participation and boat prices dropped like a rock. Boats were burned, left to sink in their slips, and people where just about giving them away. I bought my current boat for 60 cents on the dollar which is unheard considering the boat?s reputation.

Overall, participation has dropped shapely in the past couple of years. If gas hit $5 a gallon in the next 2 years as projected, you'll see boating drop down another rung on the priority list. Bet there will be some real nice deals then

 

[rallyart]

Re: The future of boating

It's cheaper to take my family out wakeboarding and surfing all day behind the boat than it is to take them snow skiing so I don't think there is a real risk yet. Other sports get expensive with rising fuel costs and economic changes. It's all relative.
I think a bigger risk of a substantial change in boat economics is when the environmental aspects are fully costed in the operation. Then $5/gal fuel might seam cheap.

 

[Dolfan0925]

Re: The future of boating

I don't think boating will ever be just for the rich. I agree with rally. There's lots of recreational activities that cost way more than boating. Family of four going to an amusement park, with gas and all that costs hundreds easy. You could go out fishing/skiing/ect for days on that price.

 

[shrew]

Re: The future of boating

"Rich" is somewhat relative. What is "Rich"?

Look at average income from a 'percentile' perspective with the average annaul household income being the 50th percentile. (60th percentile, being an annual income 10% greater than the national average). The economy, in regards to both the job market and the cost of goods will simply dicate how far down boating will be able to dip.

People in the <25th percentile will most likely never be involved in recreational boating. People in the >75th percentile will still be able to be involved in recreational boating. People in the >95th percentile have no idea there's a recession. (Note that yacht sales have had the smallest decrease in sales throughout the recession). The 95th percentile folks wouldn't be impacted by $10/gal. fuel.

So, what it really comes down to is what is the percentile group for annual household income that gets impacted? As the economy drops the percentile group goes up.

 

[sublauxation]

Re: The future of boating

I agree with Rally, I took my wife and kids to a 3D movie, cost me $65 for a little over an hour of fun. I have some concerns about launching boats, with the current state "revenue shortfall" they're talking about cutting things like milfoil cuttting. Also they're talking about wash down stations at ALL ramps to fight invasive species. Somebody is going to have to pay for that and I'm afraid launching and boat slip fees may skyrocket.

Then again I have an 18 ft tinny which is fairly light on gas, I can't talk for those with the bigger cruisers. Gas at $10 per gallon will just make me move closer the lake...then take the bus to work.

 

[smallboatlover]

Re: The future of boating

Well agree there is less and less boat out on the water. i'm 14 and when i was 8 i would go to the boat ramp and just watch the boats go in and out and now, Theres barely any boat that are at the ramp or going out. I look at the bay in the summer and you see mabey 6 boats go by a day. This is the same bay were it would be atleast 50 boats plus a day going by. Since i got my boat i will be adding to the boat population. Right now i know doing boat resorations and reselling the boats isn't the best time so i'm working on my current boat and when the market comes back i will sell it but planning on have more boat in that time so. Gas prices haven't effected the boaters that go out on there 16' and less boats. people can pay for boats that size but over that you don't see to many people. Theres yatchs were i live in a speacil dock place there was 2 that sunk this fall just from the owner not checking on them and working to keep them. I never see those boats leave any more.

 

[wbc1957]

Re: The future of boating

All of the replies are informative to us, the current boat user, but it still leaves the question open for issues like availability of parts, places to even have our service work performed, and what costs would be based on the shortage of shops. Sure, the first five years of many closing due to the fuel crisis and continued poor economy, can be covered with techs advertising on CL. But eventually, there will be too much demand for too little supply in both parts and service. Maybe I am wrong. This is the other half of the question I am refering to. Marinas may or may not be as plentiful, in the future, which means greater costs for those that are keeping their boats in a slip. Trailer boats have the advantage of fuel savings away from the water, but still must deal with costs getting it to the water. Your thoughts on these issues, as well.

 

[fisherguy123]

Re: The future of boating

We have a marina nearby on the Gulf of St Lawrence and we used to see a lot of visiting yachts from the Atlantic seabord from as far south as Florida. The last few years only a few powerboats but more sailboats have been visiting our fair shores. Perhaps this is the trend of the future. I have some friends with boats moored there and they d`ont use them near so much because of fuel prices and they often "boatpool" now on weekends. I have seen a big increase in the use of smaller powerboats....mostly the locally built fisherman style powerdories because they are so plentiful and seaworthy.

 

[emilsr]

Re: The future of boating

I bought my first boat in 1980 and my current boat in 2008. The economy has cycled up and down a few times over the years and have seen this more than once.....so FWIW....

When times are good, lots of people get into boating because they have extra money and/or because loans were cheap (like they were up until this last decline). More boat owners means more people lining up to suck on the boating teat (marinas, dealers, aftermarket companies, etc.). When the economy cycles down, boat prices adjust downwards and many that were making a decent living in the boating industry go broke. It's happened before, and it'll happen again.

When we're on a down cycle, the availability of service, parts, etc. goes down, but so does the number of boat owners so availability of services is something of a wash. When times are booming, boat prices go up but the ancillary stuff (other than fuel which is a completely different animal) tends to get cheaper due to more competition. When the economy tanks, boat prices go down but the price of parts, service, etc. tends to go up due to less competition and fewer boaters seeking these services (look up "economies of scale"). The key to survival is putting aside money during the good times to get you through the bad times. Easier said than done....and somewhat easier for the larger corporations than the mom & pop firms....but businesses require cash flow to stay operational.

There will always be boaters....true boaters....who will boat no matter what. You'll find them in anything from a canoe to a 100'+ yacht. The fair weather boaters (or economic opportunists) will come and go as the economy waxes and wanes. Some of the true boaters die off and are replaced by new boaters. I think what we're seeing today is a "culling of the heard"....the true boaters remain, the fair weather guys are headed to the golf course (or whatever they like doing).

One final thought; there are lots of "boat owners" who don't really boat but love to work on their boats and/or talk boats. You see a LOT of these folks on some of the internet forums. I see them having more of an effect on the aftermarket supply houses than anything else. They generally aren't buying new boats, and they rarely wear anything out as it doesn't get used much (if at all). Again, when times are good the businesses grow and multiply to the point there are too many of them competing for a limited market. The economy tanks and they go away....but it doesn't really affect those that spend their time on the water instead of polishing their trailer queens. There's nothing wrong with "show" boating mind you, and lots of people do it, but I really don't think they have much of an effect on those who are out putting hours on their machines.

Just my opinions guys, so don't take any of this as factual information.

 

[5150abf]

Re: The future of boating

I have been in the industry since 1987, all but about 1 1/2 years of that has been with pontoon boats.

I think we are just in a normal cylce, I have seen it before, at one time a few years ago there were something like 54 companies just making pontoon boats, obviously that number has dropped alot over the last 2 years but as the economy takes off again more and more will get back in untill it crashes again, just as in nature the strong survive and the weak die.

Bigger boats are the same, they will be back when the economy picks up, in the mean time smalller and mid size boats will be the majority of the market.

I am dead center in the RV capital of the world here in Elkhart county in norhtern Indiana, If you have or have seen a motor home or any towable chances are it came from within 20 miles of my house, at one point we had at least 20 boat companies also, currently 6 that I can think of are still around, Bennington, Godfrey, Sylvan/Smoker Craft/Starcraft,JC pontoons, Southbay pontoons.

Oddly enough all the other one died in a previous reccesion, all the companies that were around here when things tanked are still in buisness.

Boats will evolve as everything else does with consumer demands driving what you see on the boats and what kind of boats you see, with all the boat shows going on now you can bet almost everything that the sales people hear is being brought back to the factory, the majority of the changes to our boats are fro dealer saying x number of customers have to have X on a boat which we do.

Go fast boats will be back when tha money comes back and credit opens up again, you know the banks will find a way around things just as they did this time.

I do however think we are done forever with cheap gas which is going to really affect the big off shore boats, few people willbe able to afford to run them so fewer and fewer will be built at a higher and higher cost.

 

[wbc1957]

Re: The future of boating

I have been in the industry since 1987, all but about 1 1/2 years of that has been with pontoon boats.

I think we are just in a normal cylce, I have seen it before, at one time a few years ago there were something like 54 companies just making pontoon boats, obviously that number has dropped alot over the last 2 years but as the economy takes off again more and more will get back in untill it crashes again, just as in nature the strong survive and the weak die.

Bigger boats are the same, they will be back when the economy picks up, in the mean time smalller and mid size boats will be the majority of the market.

I am dead center in the RV capital of the world here in Elkhart county in norhtern Indiana, If you have or have seen a motor home or any towable chances are it came from within 20 miles of my house, at one point we had at least 20 boat companies also, currently 6 that I can think of are still around, Bennington, Godfrey, Sylvan/Smoker Craft/Starcraft,JC pontoons, Southbay pontoons.

Oddly enough all the other one died in a previous reccesion, all the companies that were around here when things tanked are still in buisness.

Boats will evolve as everything else does with consumer demands driving what you see on the boats and what kind of boats you see, with all the boat shows going on now you can bet almost everything that the sales people hear is being brought back to the factory, the majority of the changes to our boats are fro dealer saying x number of customers have to have X on a boat which we do.

Go fast boats will be back when tha money comes back and credit opens up again, you know the banks will find a way around things just as they did this time.

I do however think we are done forever with cheap gas which is going to really affect the big off shore boats, few people willbe able to afford to run them so fewer and fewer will be built at a higher and higher cost.

This economy is not going to bounce back like those of the past. I admire your optimism but have to disagree with the money coming back as it did, or credit opening up as it once did. But I do understand that as a person in the industry, you don't wish to have the public, the consumer, doing anything that would suggest major thought of their future purchase based on a questionable future. To you this would be like a panic. But it is necessary to plan a major expense that is held, maintained, and somehow afforded use, through a decade or more.

 

[emilsr]

Re: The future of boating

This economy is not going to bounce back like those of the past.

Just out of curiosity, and for the sake of debate (and with respect) why do you think that's the case?

That's what "they" said in the early 80's too, that we'd never bounce back, and times were even tougher then than they are now. 10 years later we were making money faster than we could spend it. 10 years from now I suspect we'll all be "fat, dumb and happy" again.....just the nature of the beast, at least in my understanding of it all.

The economy is cyclical; has been ever since they invented money. If that's somehow changed I'd love to know how/why.

 

[JimS123]

Re: The future of boating

I'll go ahead and make predictions, and then pray that I am wrong. I've been a boater for over 50 years and currently own five. Not likely I'll ever quit, but I have a pension and stable finances and at worst I'll mothball the fleet and end up using only my 14" tinny that only uses a little over a gallon per hour.

I have seen many recessions before. What we're in now is not a recession...it's borderline depression. The root of our problems is the housing market, which was always a staple, but now will be the death of us all. Unless and until housing improves, you will see a lot of the discretionary money disappear, and that will spell drastic changes for the boating industry.

There are at least a dozen boat businesses in my neighborhood. Naturally, they all sell boats and do service. The ones that do only that are suffering badly. I can't remember when I went in a showroom and saw a brand new boat for sale that was a 2 year old model. The only people I know that are actually keeping their head above water are the ones that have a marina too, and are making a profit from renting dockspace.

But, how long can that last? In the 1990's all my local marinas had a 2 year waiting list to get a dock. By the early 2000's there was space available everywhere, with no waiting list. Last year, most marinas had 25% open docks. How much further down can it go before the marina owners can no longer pay the rent? Those renting the docks are typically older folks that have owned the boat for years. On Sunday you see them sitting on the boat, not cruising the river.

Now, I'm not really complaining, per se'. Our "big boat" goes out on weekends with the family, but I've never been comfortable taking out the "fishin boat" on weekends by myself because the river can get a bit choppy for a 14' tinny on Saturday. But in the past year, if mother was busy with her horses on Saturday I had no problems navigating the river because hardly anybody was there!

I'm a trailerboater, so launch ramps are of great importance to me. I can remeber a time when we had to get up early on Sunday so we could get to the ramp and have a place to park the car/trailer. If we got there after lunch we had to park on the side of the road 4 blocks away. Last year on Sunday we typically had no more than six or seven cars parked in the lot along side us!

I know many people who want a boat and are seeing the rock bottom prices on the crap that is being advertised on Craigslist. (My nephew is one of them) They'll end up buying something that they really can't afford in the first place, then find that it takes another thousand to get it to run and they'll give up. I just cant believe the boats for sale here. Stuff that has sat in people's backyards idle for years and now they need money so they are selling everything they don't use.

Even people with realatively good boats just aren't using them and not taking care of them either. They are turning to junk in a hurry. The used boat market can be quite dangerous.

Bottom line....new boat sales will continue to drop off. The regional manufacturers that have a small customer base will cease to exist. The congolmerates with several brands under their wings will drop product lines and concentrate on the ones that are most profitable.

As we continue to move toward a global economy and USA manufacturing continues to decline, the purchasing power of Americans will go into the crapper. Marine products will start to be affordable overseas (where it never was before), while it will continue to decline in the USA. When we all are employed by WalMart at $9 an hour, we'll struggle to make our mortgage payment, much less have disposable income for our boat.

Two years ago I built a small manufacturing plant in California. The CEO was hellbent on using a chinese company. Against my advise and against my better judgement we went that way. Got a turnkey process, including labor. I'm ashamed to say that I paid the chinese workers $6 per day. (read that again....I said per day not per hour). Those guys were really nice people. Many of them owned cars and some even houses of their own. When they saw boats running in San Francisco Bay owned by private citizens, they said that was their goal.

That might just happen! I wish them well. Just hope it doesn't happen at our expense.

 

[JimS123]

Re: The future of boating

Just out of curiosity, and for the sake of debate (and with respect) why do you think that's the case?

That's what "they" said in the early 80's too, that we'd never bounce back, and times were even tougher then than they are now. 10 years later we were making money faster than we could spend it. 10 years from now I suspect we'll all be "fat, dumb and happy" again.....just the nature of the beast, at least in my understanding of it all.

The economy is cyclical; has been ever since they invented money. If that's somehow changed I'd love to know how/why.

Sure, there have been doomsdaysayers in every recession. What sets this "depression" apart from the past ones is the housing market. Home ownership has always been good as gold. You could count on your investment appreciating. That's not the case today and that's why this depression sets us apart from those in the past.

The '80's may have been bad, but the real economists were not scared - they told us all would be OK. (and of course it was) Sure, it's cyclical, and we always could predict when the upswing was to come. But right now, even the pundits won't stick out their neck and predict prosperity. Except the government ....but we all know that they have no brains at all....LOL.

 

[BTMCB]

Re: The future of boating

The "future of boating" as it pertains to ME today....is....I will be launching as usual bright and early tomorrow (Saturday) morning. I am not smart enough to comment on the future of the industry and the impact this horrible economy has on it - except to say I wish all those who love to boat, can always do so.

 

[Home Cookin']

Re: The future of boating

for the discussion to make sense you have to divide up the various markets that comprise "boating." This includes:
The new small boat market--down in depressed times
The used small boat market--up in depressed times in some respects
The commercial small boat (crabbers, service boats, rentals) steady
Commercial large boat--affected by economy like all other industries generally
Luxury boat-new
luxury boat-used
Mid to large pleasure boat--probably the hardest hit in a down cycle. That's the $90,000 boat you buy now for $25,000.
Repair industry relies on new sales but work decreases, but is bolstered some as people hang on to old boats. Not so much as car repairs, which boom in down times for this reason.

 

[emilsr]

Re: The future of boating

Sure, there have been doomsdaysayers in every recession. What sets this "depression" apart from the past ones is the housing market. Home ownership has always been good as gold. You could count on your investment appreciating. That's not the case today and that's why this depression sets us apart from those in the past.

The '80's may have been bad, but the real economists were not scared - they told us all would be OK. (and of course it was) Sure, it's cyclical, and we always could predict when the upswing was to come. But right now, even the pundits won't stick out their neck and predict prosperity. Except the government ....but we all know that they have no brains at all....LOL.

Good point; the housing market is a major driver this time. The thing is the housing market was inflated before the crash....so how much of the housing crash is a "market adjustment"? I don't think they've broken the code on that yet and that's why none of the smart economists want to stick their neck out and pick a date for recovery. With the one in the 80's we had "stagflation" which was also something new at the time. The crisis passed then....I think (and hope) it will this time too....but of course I could be wrong.

There are signs of recovery now, just not in the housing market. I think we're in this for a while yet, but somebody please tell me when the recovery is in full swing so I can go buy a new boat before the prices go up.

 

[wbc1957]

Re: The future of boating

Just out of curiosity, and for the sake of debate (and with respect) why do you think that's the case?

That's what "they" said in the early 80's too, that we'd never bounce back, and times were even tougher then than they are now. 10 years later we were making money faster than we could spend it. 10 years from now I suspect we'll all be "fat, dumb and happy" again.....just the nature of the beast, at least in my understanding of it all.

The economy is cyclical; has been ever since they invented money. If that's somehow changed I'd love to know how/why.

Yes, I would normally agree with you about a cyclical market based on historical data. The problem with that belief for this time around, are the other variables not found in the past. The debt ceiling and looming entitlement programs which are unfunded. They are no longer going to be put off.Plus, the babybomers make the country top heavy with obligations, like a company with too many chiefs. Guess what the result is. Those days of letting the next administration worry about that is coming to an end. Any person who plans to commit his/her credit, or actual cash towards a long term ownership of a boat, is going to either look deep into this very issue, or is going to left in bad shape on the otherside. Historically, a depression in the US economy happened approximately every 70 years. The belief of why is due to the generations of peiople not passing on the knowledge of the lesson learned, longer than one full generation. A depression was due in the early turn of this century, but the new bubble of the housing market and the global absorbsion of our debt instraments delayed this from happening. Oil is not going up in price, even with a greater global need from China. The truth is worse than that. The truth is that the price of oil is directly related to the value of the dollar, which is dropping fast. The days of a cyclical economy are over.