At long last, light at the end of the tunnel. And no, wise guy, that's not another train coming at us (at least I don't think it is).
We are making a slow, wide turn out of what has been a deep trough. And, as if we were turning a very large ship in a narrow fairway, it takes time.
Where are we headed in the coming months? For our annual report on the year ahead, "Outlook 2011," turn to Page 10. If you read nothing else in this issue, pay attention to what these 18 industry leaders have to say about the next 12 months. It's smart reading.
So what lies ahead?
Although there still is no shortage of headwinds - the moribund housing market, the stubbornly high employment picture, sovereign debt concerns - there does seem to be a brightening of the general U.S. economic picture. Although you can never say never, the likelihood (not to mention the fear) of a double-dip recession has abated significantly since mid-2010. That's part of the reason we saw renewed confidence and enthusiasm at many fall shows. It was a pleasant surprise.
Boaters with the wherewithal came off the sidelines after two years in hibernation and spent a little money. They bought at Newport, Annapolis, Lauderdale and elsewhere. Perhaps it was recession fatigue. Or pent-up demand. A combination of the two?
The numbers were very modest, but the trajectory was in the right direction. For the foreseeable future, however, buyers will remain the exception rather than the rule. We're still looking at a long upwind slog.
2010 will prove to be the low-water mark for new-boat sales. Moving forward, slow, steady improvement in consumer confidence - especially confidence in retaining one's job - will nudge the dial on new- and used-boat transactions. No one is expecting miracles in 2011, but incremental improvement across more sectors is likely, with the lion's share going to the strongest, best-capitalized, most professionally run businesses.
Good news and confidence are contagious. So is fear. The spate of reports predicting chronic underemployment, if not permanent unemployment, for workers over 50 who lose their jobs in this market is not exactly pushing baby boomers into new-boat showrooms. A slow improvement in jobs and housing, an easing in the credit markets and a reduction in fear will help immeasurably in steadying would-be consumers and turning more of them into buyers.
Traditionally, product innovation differentiates new boats from used, driving interest and ultimately sales. But unlike the past, it's not simply a case today of saying, "If you build it, they will come." In order to get buyers to part with a larger pile of shekels, builders and dealers will have to do an effective job of explaining the tangible benefits of technology to those cost-conscious consumers who are now viewing their purchases through a more finely ground lens of price vs. value.
The re-emerging buyer is simply much more sensitive to cost than he or she was before the recession. Less profligate. More focused on paying down debt. Human nature notwithstanding, there will be fewer folks overextending themselves in order to buy more boat than they need just so they can strut down the docks like a rooster.
In the meantime, service, system upgrades, repowers and the like will continue to represent important revenue streams in the year ahead.
The "creative destruction" recession has wrought on vulnerable businesses and industries around the globe will continue to take a toll on U.S. dealers, builders and related businesses. In the short term, we will see more failures - thankfully nothing like what we experienced in the recent past. But capacity still outstrips demand, and more right-sizing seems inevitable.
To the positive, new business models and methods for the ways boats and equipment are developed, built, marketed, distributed and serviced are emerging. Innovation and change are in the air. It's a good time to be nimble.
Our great strengths are the large pool of existing participants and the enduring attraction of being on the water. We have a great story, which we need to tell and retell and reshape with confidence and conviction across the many channels available today. Discover Boating will be a key driver in pushing those stories out to a national audience.
The recent past has ensured that the future is not for the perennially wary and cynical, nor the fainthearted, nor those for whom all change is anathema. Looking well beyond 2011, it is precisely because of these difficult times that the long-term potential and opportunity in this industry is so strong.
This article originally appeared in the January 2011 issue.