The NMMA helps cut costs for exhibitors struggling with harsh economic reality
The mood among exhibitors going into this year’s Miami International Boat Show is hopeful, but realistic. Leaders from all segments of the industry speak of the unprecedented downturn in 2008, but they also say a new year, a new U.S. president and lower gasoline prices bring hope of a turnaround – or at least signs of one.
“We hope consumer confidence will go up with the new [Obama] administration,” says Jeff Kauzlaric, communications manager for Furuno, the marine electronics manufacturer. “We’re hoping boats will be selling and things will pick up.”
Others have thrown out their crystal balls altogether.
“I’m out of the prediction business,” says Glenn Sandrich, vice president of marketing for MarineMax. “It’s so topsy-turvy out there right now.”
The 2009 Miami International Boat Show will be held Feb. 12-16 at the Miami Beach Convention Center and Sea Isle Marina & Yachting Center, while its Strictly Sail component takes place at Miamarina at Bayside. The five-day event brings together thousands of the latest powerboats, engines, sailboats, electronics and marine accessories from more than 2,200 exhibitors – at least that’s the figure in a good market. It’s a safe bet that the number of exhibitors and public will be down this year.
Adding to the sprawling marketplace, independent producer Show Management Inc. stages its big Yacht & Brokerage Show simultaneously along Miami Beach’s Collins Avenue.
The National Marine Manufacturers Association is doing what it can to help exhibitors sell more products at the show and clear excess inventory.
The association is temporarily relaxing its model-year policy for its winter boat shows, allowing exhibitors to display a 50 percent mix of new models and unused boats from the 2008 model year. This is up significantly from the traditional 20 percent limit on previous-year models.
“In tough times, you’ve got to reduce inventory,” says Ben Wold, NMMA executive vice president in charge of boat shows.
The NMMA also is helping exhibitors identify the more serious buyers coming to the show. The association sent free tickets to “hot leads” from Discover Boating — those who indicate they are in the market for a new boat and want to buy within the next three months.
“We will give them a special wristband and tell dealers to look for these people,” Wold says.
Finally, the NMMA is trying to help exhibitors cut costs by working with contractors to reduce rates for services such as installing carpet or hanging signs.
“We’re trying to help them save money wherever we can,” says Wold.
Budget-conscious NMMA also is scaling back on various industry events to keep its own costs in check. With fewer resources to work with this year, the NMMA says it is trying to curtail its normal industry activities at the show while still providing a quality event and delivering important information to media and the industry at large.
For example, instead of a full-scale media breakfast on opening day, the NMMA will host a simple press briefing at which president Thom Dammrich will deliver his traditional State of the Industry address.
The Miami Innovation Awards will be presented Feb. 13, but there will be no Grow Boating meeting this year, because the NMMA decided to forego an advertising campaign this year and redirect the assessments back to manufacturers.
‘Working it hard’
Exhibitors say they hold no unrealistic expectations for the Miami show, given the state of the economy and the fact that many are closely watching their budgets. But everyone seems determined to put their best efforts forward — from new product offerings to special retail promotions.
“Obviously it’s a tough year, but we’re going to work it hard,” says MarineMax’s Sandrich.
“We have scaled back somewhat on boat shows,” he says. “We’re trying to be smarter. The effort is the same or more, but with less expense.”
Tiara Yachts, on the other hand, will increase its exhibit space by about 28 percent.
“A lot of companies … were forced to reduce the size of their space,” says David Walsh, director of marketing for the Michigan-based boatbuilder. “When the right space became available and allowed us to grow and show our larger products, we felt this was the time to take advantage of it.”
Tiara plans to unveil its new 4800, the company’s largest convertible.
“It fits very well in that market,” says Walsh. “We’re very hopeful we’re going to do well in that market.
“We’re going into the show to be as successful as possible,” he continues. “We are committed to the show. We will be more conservative in our spending, but from a participation and R&D standpoint, we’re in it for the long haul.”
Sea Ray holds line
Sea Ray Boats has increased its space at the Miami Beach Convention Center and moved its in-water display from Collins Avenue to the Sea Isle Marina. Overall, the exhibit space comes out about the same, says Rob Noyes, Sea Ray vice president of marketing.
“We cut some expenses, but not our presence,” he says.
Sea Ray will have 16 new boats with joystick docking at the show, including the new 54-foot Sundancer, as well as the new 27-foot, 25-foot and 23-foot Sundancer models. The company will also feature its new 22-foot Pachanga to celebrate its 50th anniversary year.
“We’re excited to showcase those new models,” says Noyes. “I don’t have any unrealistic expectations, but we will sell boats.
“With fuel prices down, there is a good chance there will be more boating this year,” he continues. “Lifestyles are getting trimmed back, but they’re not getting cut back drastically.”
Loans will be there
One looming question: Will there be financing available for those who do want to buy a boat? Don Parkhurst, senior vice president of SunTrust Bank, says there will be, even with the departure of several retail lenders in the last year or two.
“The pool has shrunk, but there will be lenders at the show and there will be adequate financing for consumers,” says Parkhurst, past president of the National Marine Bankers Association.
He cautions, however, that fewer consumers will qualify than in past years. Some prospective buyers who would have been given loans in previous years may find it more difficult, because the remaining lenders have adopted more stringent standards, he says.
As for the show itself, Parkhurst expects turnout will be down — particularly among the big international contingent that has become a Miami staple.
“People have extremely modest expectations for the show,” he says. “I think they will sell some boats there, but I think there will be a lot less people than in past years. The Miami show has been buoyed by international buyers — South Americans and Europeans, in particular. They’re one year behind us in the recession; they were more optimistic in February 2008. This year is going to be different, because they’re really feeling the recession now.”
The absence of those international buyers, however, could make the show a better harbinger of what 2009 holds in terms of domestic sales.
Fuel prices may help
Dale Barnes of Yamaha Marine Group acknowledges that times are tough, but he says there are
opportunities for those who remain focused on success.
“We all recognize the difficulties of the marketplace … but at the same time there are good things happening,” says Yamaha’s marketing division manager.
“Gas prices are way down compared to last summer,” says Barnes. “That was one of the biggest hurdles we faced [last year]. Now it’s an opportunity.”
Manufacturers note that attendance and sales were down during the fall and early winter shows, including Fort Lauderdale and New York. However, opinions are mixed on what that will mean for the Miami show, and for the rest of the year.
Furuno’s Kauzlaric believes sales at Miami may be a little worse than those at Fort Lauderdale.
“Fort Lauderdale is megayachts, and those people are less affected by the economy than those who go to Miami,” he says. “But we’re hoping for better,” he adds.
Kauzlaric says the boatbuilding segment is hurting more than the aftermarket business because consumers who aren’t willing or able to take on the large expense of a new boat may be more willing to buy newer equipment and accessories to outfit their current boats. He hopes that will help generate sales for Furuno’s latest software, Maxsea Timezero, which offers a 3-D perspective of navigation charts.
Barnes, on the other hand, believes Miami will produce better results than Fort Lauderdale.
“I think we will see some upside in Miami,” he says. “People use Fort Lauderdale as a research show and hold off on purchasing until Miami. Given the economy, we will see a lot of that attitude.”
However, Barnes cautions against using Fort Lauderdale to predict sales in Miami.
“We’re trying not to judge our Miami decisions based on what happened in Lauderdale,” he says. “It’s a new year. There’s a lot to be excited about.”
He applies the same philosophy when it comes to using Miami results to determine sales strategy for the rest of the year.
“I think we have to be careful in how we use Miami to gauge our planning process and our marketing,” says Barnes. “As big and important as Miami is, we have to be careful not to let the results impede our efforts to conduct business each and every day.”
Barnes says Yamaha is doing everything it can to help its customers — dealers and boatbuilders — maximize their sales success during the boat show season. This includes two retail promotions.
The first, Repower Now, offers a credit on rigging components and/or dealer installation services, or Zero Zero financing, for those who buy qualifying outboards. The second promotion, Two Ways to Save, offers either a 36-month Yamaha extended service contract for eligible outboards or a consumer credit toward goods and/or services at the authorized dealership that sold the engine.
Barnes says Yamaha’s success in Miami will be judged by how well these promotions helped its customers.
“In this particular environment, success is going to be on the back side of the show — was our time and effort helpful to our customers?” he says.
Other exhibitors echo that sentiment. They all say they want to generate sales for their dealer networks, and ultimately for themselves. But they know — perhaps this year more than ever — those sales may not be immediately evident.
“We won’t be able to gauge success until afterwards, when we see how many orders our dealers place,” says Furuno’s Kauzlaric.
Walsh says Tiara’s main goal in Miami will be to sell boats, establish relationships, and make contacts with potential customers. At the same time, he says he will use the show to monitor overall consumer sentiment.
“We’ll be watching others also to see what’s happening out there,” he says. “Where’s the market and what’s the activity? How many people out there are in a buying mood?”
This article originally appeared in the February 2009 issue.