21 industry leaders look at 2015 and most see continued growth for the U.S. boating market
American Boat & Yacht Council
Not long ago I had a discussion with a recent college graduate who went to work for a very popular sportswear company. I asked him how he liked it and what his observations were as a recipient of a business degree from a well-known university. He said that on the front side of things, everything looked great, but there were a number of internal issues that really needed to be sorted out. I was immediately reminded of a phrase I used in my retail days: “Sales solve all problems.”
Truth is, our industry was not afforded the luxury of booming sales over the last several years, sales that would have covered up some of our internal issues and attention to detail. Those organizations that made it through the past few years have had to face every aspect of their business model, many in minute detail. Whether it be customer service issues, production scheduling, sourcing or personnel, those of us preparing to enter 2015 have had to put each facet under the microscope.
So why talk about this now? What does this have to do with a prediction for 2015? Only this: The lessons of the past, combined with the sales of the future, will result in a much stronger industry. With tighter controls, more streamlined processes, practical cost-cutting measures and even reinventing business models, more of every dollar earned will go to the overall health of your organization. With a clean and organized house, galvanized by the lean years, everyone reading this should be able to maximize their predicted successes in 2015. The hard work and sacrifices will manifest themselves in many different forms — perhaps the ability to expand to a new or additional location or pursuing new research and development plans for the next new product.
My prediction for 2015 is that the majority of the industry stands poised for success. The foundation is as strong as it can be, and companies will be taking on expansion and improvement projects, not just shoring up the walls in an effort to prepare for the next onslaught. However your company chooses to take advantage of the possibilities of 2015, please consider the consequences of the “sales solve all problems” attitude. Keep your finger on the pulse of the organization. Continue to sweat the small stuff and don’t let those beneficial fundamental changes go by the wayside just because the money is coming in the door.
Dominion Marine Media
The retail boat sales business improved in 2014, and we expect a continuation of the same general trends, including gains in new-boat sales for many of the dealers we work with at Dominion Marine Media’s Boat Trader and boats.com sites.
While brokerage sales volume has stepped back about 5 percent in 2014, no doubt awaiting more recent models to arrive on the market, average pricing has shored up, particularly in the high-volume segments of boats shorter than 45 feet. And in almost every sector of brokerage, the total dollars exchanged in the market have steadily increased, according to members of YachtWorld brokerages.
While these trends are important, as always, and the success of our more than 5,000 member dealers, brokers and manufacturers is the key to our business, our real determination these days is to maintain a primary focus on putting customers first. This means consistently reviewing every aspect of our business and asking how we can make changes to better serve our customers. It’s an approach we think the industry as a whole should work with us to master, so I’d like to describe our efforts further.
In many respects, this isn’t a flashy process; it’s a matter of motivating our entire team to work together in a timely, systematic manner to respond better to customer questions, issues and ideas. And as the Internet evolves, a customer-first strategy is not as simple as it sounds. Set in a rapidly changing environment, our business depends on satisfying the sometimes competing demands of both consumers and customers.
To dig into this, we funded a lot of research this past year. An example of what we learned is that consumers thought we were delivering leads to dealers too slowly. That wasn’t the case; a lead triggers an immediate email. But our CRM tool was not mobile-enabled, so we modified it for smartphone usage, and now our members can receive leads and respond when they’re not at their desks.
We also surveyed consumers, dealers and brokers to understand what they expected in the boat sales process — and what they actually experienced. We discovered some surprising gaps — the most significant being how consumers shop for boats, compared to how dealers and brokers list their boats. For example, consumers search for boats first by type and then by price and condition in equal measure; brokers and dealers list their boats, placing the highest priority on make/model (40 percent), followed by description (18 percent) and the least importance on price.
The impact of this disparity became clear in feedback from dealers who shared that leads were incomplete and “not ready to buy;” the reality is consumers are often forced to contact sellers prematurely for more information, such as price. In recent months we’ve begun a several-pronged effort to educate and encourage members to provide what consumers want.
A more obvious output from our research is the redesign of our three major sites — YachtWorld, Boat Trader and boats.com — a process that’s already begun and will roll forward in the coming months. Not only will they be easier to navigate and responsive to any size screen, we’ve consciously omitted some advertising opportunities to keep the sites optimized for the consumer experience. While some customers will be disappointed that they can’t buy certain prominent positions, we believe our customers, collectively, will achieve better results.
Founder and CEO
We expect the global economy to improve only moderately in 2015. The current global economy is far away from healthy growth across all major regions. Instead it is improving slowly and remains susceptible to disturbances from geopolitical crises or turbulence in the financial markets.
Solid growth is projected for the U.S. The emerging markets have shown declining growth for their overall economies, but Asian markets certainly still offer substantial growth opportunities for the underdeveloped recreational boating segment. Europe is projected to emerge slowly from stagnation, but fundamental economic issues in its troubled economies still have not been addressed.
Independent of economic climate, we will continue to see an increase in electric mobility on the water. Electric propulsion is a segment that has been growing every year in the last decade and it will continue to do so.
The growth in electric propulsion is largely independent of short-term changes in oil prices. It is neither accelerated by a short-term increase in gasoline prices, nor is it slowed down by a decrease in prices. Instead, it is driven by fundamental long-term developments like the need to protect our atmosphere, our climate and our waters for our children and by foreseeable long-term supply-demand discrepancies for energy and mobility. These fundamental drivers will remain unchanged for quite a few years to come.
Electric mobility in boating is happening earlier for certain segments, such as tenders or auxiliary motors for sailboats, and later for others. When electric mobility becomes feasible for a certain boating segment depends on typical usage profiles and the suitability of electric propulsion for that use.
The number of segments that can be addressed with electric mobility are increasing over time, driven by an increasing demand for more sustainable mobility and advances in technology with regard to batteries, motors and hybrid technology.
In 2015 I expect many of the trends that have established themselves during this recent marine recovery to continue: The U.S. will remain the brightest part of the global boating market as the rest of the world remains in a flat to low growth mode; some key segment growth rates will significantly outpace the market; and consumer sentiments around versatility and functionality will prevail.
Though the overall boating market remains about half the size it was at its peak, the popularity of boating itself remains very strong. Our job as boat manufacturers is to ensure that boating continues to deliver a positive value equation for consumers around the world. And to do that, the center of our focus must be catering to the changing needs of our customers.
Consumer preferences drive our evolution, and recently those preferences have been firmly centered around versatility, reliability and simplicity. This favors smartly designed outboard-powered center and dual console boats that offer increased levels of functionality and usability of space.
Take, for example, the incredible success we have had with our Dauntless and Vantage series, which combine premium fishing and water sports activities with a high level of comfortable cruising, and our Outrage line, which incorporates that same level of comfort in a highly capable offshore fishing boat.
In addition, boaters are demanding easier access to the water, and features like our new swim patio answer that. A boat is a system of systems, and therefore it is essential to partner wisely. Through our partnership with Mercury, we’ve integrated joystick piloting and ushered in a new era in propulsion — simpler, more intuitive and easier to use than ever.
And through our world-class dealer partners, we continue to improve the purchasing, service, support and ownership experience. Of course, there is an enduring concern around safety; a boat is an investment, and peace of mind should always come standard. In terms of safety, reliability and ease of use, Boston Whaler stands today, as ever, like no other.
The best boat manufacturers understand these dynamics and are constantly innovating, constantly searching for smart, simple solutions that make boating more enjoyable and more accessible. That is why, in a market barely half the size it was, many manufacturers have never been bigger. And this sort of growth is exciting, as it fuels continued investment in our facilities, in our people and in our local communities.
Boston Whaler is investing $10 million and adding almost 60,000 square feet of manufacturing space to its Edgewater, Fla., location and has created over 120 jobs in the last 12 months. The introduction of our new 420 Outrage, the largest and most sophisticated Whaler model ever, embodies this growth and heralds our continued success in 2015.
Director, consumer insights and planning
Lopez Negrete Communications (the industry’s Hispanic outreach marketing firm)
You’ve probably read more than your share of articles about how economic times, like the tides, have risen and fallen. Boating and fishing are increasing one day, decreasing the next. Most recently, people are buying smaller boats, spending less time on the water and less money on just about everything.
Some of this may be debatable. But one thing that is certainly not up for debate is that the demographics of those fishing and boating are shifting. The racial and ethnic makeup of people that will be the future of the industry — those that will be keeping our national pastimes flourishing over the generations to come — is becoming increasingly diverse. And this diversity is being led by Hispanics.
When I look into the future, I see dramatic shifts in the population makeup of the U.S. It’s not about immigration, who we let in or who we let stay. Diversity is coming from people already here in the U.S. That’s our new reality.
Unfortunately, the other side of the reality coin is that folks that have traditionally been the industry’s core — non-Hispanic males aged 50-plus — are dying out. Literally! This demographic is decreasing in both numbers and as a percentage of the total population. A 2012 Census report showed that between 2000 and 2010 non-Hispanic whites experienced more deaths than births.
Our nation is quickly becoming majority minority, i.e., very soon there will be no single racial or ethnic majority. Diversity is the future and you don’t need a crystal ball to see it. If you look at the current under-5-aged population, kids entering first grade this year, it’s already a majority minority. And that’s total U.S. Take a look at the racial/ethnic makeup in our top markets: L.A., New York, Miami, Chicago, Houston, etc. You don’t have to be smarter than a first-grader to figure that one out.
The work we’re doing with the Recreational Boating & Fishing Foundation demonstrates our need to increase the number of Hispanics boating and fishing and our need to embrace diversity. Hispanics do not have the same incidence of participation as whites. Yes, there are those that do boat and fish. And there are those that love it, but they are in the minority.
We must understand there are cultural nuances and unique situations in which different ethnic groups participate. We must adapt to these. We need to educate and inform, to invite and include. And we must welcome with open arms. If we do this right, with genuine sincerity and authenticity, we all stand to gain: boating interests, fishing, conservation, our beloved customs and tradition.
Looking further into the Latino crystal ball, I see a small but significant segment of avid, passionate Latino anglers and boaters emerging from under the radar. The first wave will be led by those anxious to tell their own stories of el pez gigante, the one that got away. As with the mainstream, the tales of many of these Latino a-fish-ionados may actually be true.
In response, Latina voices will follow: countless wives, mothers, sisters and daughters who began the sport accompanying their male counterparts, simply to participate in a family outing. They will soon have their own stories of that primera pesca, or first catch of their own. However, via their desire to share and the magic of social media, these ladies have pics to prove their prowess. And the rest will be history.
As seen with traditional American sports, such as the NFL and NBA, when you build an outreach program targeting Hispanics, they will come. While Latinos are adamant about maintaining their culture, they also seek to incorporate elements of other cultures into their lives when the merger brings positive benefits. Once the message is out, once Latinos see people with whom they can identify fishing and boating, they will understand these fun, family-focused, outdoor activities are indeed for them. And they will join.
Managing partner, Coburn & Associates, and past president, National Marine Lenders Association
The skies have been steadily clearing in the boating industry and our outlook for 2015 once again signals optimism. Similar to 2014, recreational boating companies that have reinvested in and restrategized their businesses are clear winners. That takes a great amount of discipline, given that the industry’s post-Great Recession growth has been a slow ride — as far as post-recession periods go.
The overall economic news remains on the plus side of the ledger and we should expect similar trends in 2015. Recreational boat inventory levels remain healthy, as dealers have retooled their inventory management strategies and overall new-unit sales have been fairly flat for the past six years. The U.S. unemployment rate is making progress and is expected by many economists to break the 5 percent mark in early 2016. The Consumer Confidence Index should continue its march back toward 100 — a level we have not seen since 2007. A sustaining of recent (lower) fuel prices at the retail level should help boat sales in early 2015.
U.S. adult participation in boating has increased for four consecutive years and is expected to remain strong at this writing. The industry’s annual recreational boating expenditures are strong and should easily exceed $37 billion this year.
On the cautious side, interest rates should begin heading upward in 2015. Pontoons, aluminum outboard/fishing, PWC and a few other price-leader boats will likely again lead the sales drive as we move into 2015. That brings us to boating affordability. It does have an effect on boat sales, as the industry seeks to gain millennial buyers and their yet-to-fully-develop incomes. It’s a good time for industry businesses to focus their marketing and education programs to that of “value” and “budget” for every boating consumer.
Boat loans remain available, as more lenders in both wholesale and retail lending have entered (or re-entered) the financing space. Automobile, marine and RV loans have led the growth of overall consumer credit for the past four years and will continue the trend into 2015.
Recent lender surveys reveal that boat loan underwriting guidelines have eased slightly and boat loan bookings increased again in 2014. Surveyed lenders also indicated they are mildly optimistic for increased business in 2015. Overall consumer boat loan delinquency rates have declined for four straight years. The lenders project delinquency to remain stable for 2014 and 2015.
Regulation and legislative issues will continue to play in the boat loan field throughout 2015. We expect the second-home interest deduction to be revisited and more activity from the Consumer Financial Protection Bureau. Significant fines have recently been levied in the residential mortgage and automobile financing sectors. Marine lending — both bank and non-bank lenders — must remain on alert as extensive examinations begin to move in their direction. It’s the “coattail effect” of the automotive indirect lending business.
As we head into 2015, our recommendations are similar to those of last year. While it is expected to be another year of slow economic growth, embrace that as good news and strategically manage to it. Always recognize and satisfy the boating needs of consumers, as they are the constant for earnings and success to our businesses.
National Marine Manufacturers Association
I would characterize 2014 as the year we could say “We’re back!” Boating participation was strong, new-boat sales are expected to be up 5 to 7 percent and retail expenditures on boating products/services are expected to eclipse pre-2007 highs. We’ve seen sales strongest of ski/wakeboard boats, saltwater fishing boats, pontoon boats, aluminum fishing boats, fiberglass runabouts and personal watercraft. Sales of larger boats are also starting to gain traction.
In 2015 the economy is expected to continue helping to boost new-boat sales. Expectations for GDP growth are around 3.5 percent. Historically, when GDP exceeds 3 percent, new-boat sales experience healthy growth. The housing market is expected to see continued improvement — a healthy housing market will be important for sustained growth of boating. Consumer confidence, which hit a seven-year high of 94.1 in October, was resting just below 90 in November and is expected to improve in 2015. When consumer confidence is strong, so are boat sales. Consumer spending has seen record growth, and should confidence remain strong, so, too, will spending.
Let’s not forget we’re currently enjoying a multiyear low on fuel prices that’s putting more money in people’s pockets. Fuel prices are projected to remain low through 2017.
It also helps that we have a surge of new, innovative product hitting the marketplace at the same time there is a shortage of late-model pre-owned boats. We are expecting a very good winter boat show season. Space sales for the NMMA’s winter shows are up 12 percent, signaling stronger industry confidence in the 2015 selling season. And the NMMA will invest over $5 million in marketing to drive buyers to our boat shows!
So, with a good year under our belt and positive economic momentum carrying us into 2015, I’m anticipating 5 percent growth in new-boat sales and retail expenditures in the coming year. It’s likely we’ll start to see gains in larger boats and sterndrives, too, as all of the key indicators for economic growth and consumer confidence continue to improve.
On the flip side of this optimism and barring any unexpected economic shocks, there are three areas that could negatively impact this forecast: Washington, D.C., the weather and our industry’s failure to keep focused on improving the consumer experience.
I am hopeful Congress and the president can work together the next two years. The NMMA will be working in Washington and key states on a pro-growth agenda for the U.S. boating industry and in Ottawa and provinces for the same in Canada. There are several important pieces of legislation that will promote more fishing and boating. I encourage all in our industry to attend the American Boating Congress May 11-13 to ensure we make an impact.
Though we will have to wait and see, the Farmer’s Almanac is predicting a hotter and drier summer for most of the country. That would be welcome after the slow start the past two years.
Lastly, attracting younger adults and minorities to recreational boating should be a priority. According to Info-Link, boat owners are becoming six months older every year. We must be inclusive, not exclusive!
I know that when we work together, we can accomplish great things for recreational boating and I look forward to working with each of you in 2015.
Maverick Boat Co.
It’s always a leap of faith and a bit unwise to make sweeping, forward-looking predictions and even more so to put them in print. However, with that caveat, here’s what we anticipate 2015 will bring.
Expect to see continued moderate, albeit inconsistent growth in most of the marine market segments for 2015. Some segments that have struggled in the past will continue to do so and others will be buoyed by an accelerating improvement in the economy and lower fuel prices. The marine recovery has not nor will it continue to be shared equally by all segments and all companies. The innovative, fast-reacting companies will continue to gain more share and those slow to bring new, exciting product to market will miss out. Product cycles will continue to shorten, putting more and more emphasis on speed to market and R&D cost control.
MBC is primarily an outboard saltwater fishing boat builder, with our Cobia, Pathfinder, Maverick and Hewes brands, so our perspective is somewhat different than, say, a sterndrive builder. Fortunately for us, our market has rebounded very well and I see nothing on the horizon to indicate that it is going to change trajectory. We expect total segment growth of 10 percent for 2015 with some interesting changes in product mix. Trends I have noticed include the fact that the typical boat buyers have changed. By and large, they’re older than they were and the hard-core “angry at the fish” guys are largely being replaced by folks looking for fishing and boating as family entertainment and really want a comfortable platform to pursue that end. The hard-core guys are still there, but there are more of the former than the latter. That’s led to larger boats and boats with more creature comforts across most sub-niches, and most of our brands’ offerings have evolved to accommodate that shift.
Looking more narrowly, for MBC I expect strong revenue growth and slow to moderate unit growth as our product platforms continue to grow in size, complexity and cost. This will continue the current trend of very strong margins for us and our dealer partners. We don’t plan to grow our business through an increased dealer count, but by working closely with our business partners and further strengthening our already strong relationships. We have just completed the best year in our history, and 2015 will be our 30th anniversary as Maverick Boat Co. We fully intend on honoring that milestone with another record year!
If you liked 2014, you will probably like 2015.
Sure, we all miss the heydays, but today’s boating market is fundamentally different than it was a decade ago, so one could argue that the less dramatic market fluctuations we experienced during the past few years are good for our industry. They have given us an opportunity to catch our breath and adjust to the new normal while enjoying a much needed, albeit somewhat restrained, recovery. While this period of calm is unlikely to last long, we expect 2015 to be another year of modest growth. Here’s why:
Generally speaking, the U.S. economy is healthy. Most key economic measures, such as employment, GDP and consumer confidence, have shown clear improvement over the past few years and the general consensus among economists is that we will see more of the same in 2015.
In most major markets, home values, which have a high correlation with boat sales, increased significantly the past couple of years. This is good for boating because people are more apt to make discretionary purchases when they are sitting on a comfortable equity cushion.
Fuel prices are the lowest they have been in five years and the U.S. Energy Information Administration expects prices to remain low through 2015. This is not only good for the economy, but it could encourage people to spend more time on the water while fuel is “cheap.”
New-boat sales have had three years of solid, single-digit growth, which continued well into the latter part of 2014. As of November, we saw no signs of slowing, except in the few segments that have been struggling all along.
New-boat inventories are in check. Prior to a slowdown, we usually see a buildup in the number of days boats sit in inventory. Some builders manage their production levels better than others, but as of November the overall pipeline looks clear.
Pre-owned boat sales decreased slightly during 2014, but we believe this is primarily due to lower supply rather than a decrease in demand. In fact anecdotal evidence suggests that quality late-model pre-owned boats are in short supply. This is supported by the data, which show that the number of 5-year-old boats being sold today is less than half the number sold three years ago. This is good for both new sales and pre-owned values.
The overall fleet (almost 12 million registered boats) will shrink about half a percent again this year, but this still leaves a lot of boats that need equipment, insurance, maintenance, storage and new engines. The existing fleet is our industry’s foundation and with a healthier economy, consumers are apt to spend more time and money on their boats.
All of the evidence suggests 2015 will be another good year. However, I can confidently say that our industry and our customer base will change dramatically over the next decade. We have to take advantage of this period of relative stability to better position ourselves for the inevitable changes headed our way.
Marine Retailers Association of the Americas
In a survey conducted in early December by MRAA and Baird Research, 61 percent of boat dealers suggested that they expect to grow their businesses again in 2015.
More growth is great, right? Especially as we look in the rearview mirror and distance ourselves from the downturn. But as we grow, we’re beginning to reacquaint ourselves with an old industry problem: the lack of qualified job seekers.
Let me ask you something: Who among us does not love working in this great industry? We make an incredible product. Boats. Engines. Water toys. And all kinds of incredible accessories. Then we sell them and we get to experience the joy of watching families grow closer together, enjoying their time using our products and creating an incredible lifestyle for themselves and their kids. That’s pretty darn rewarding if you ask me.
So why aren’t we doing a better job of telling the story of how great it is to work in this industry? Why aren’t we more motivated to attract people to work alongside us?
MRAA members have been asking us for help in finding qualified job seekers. We have responded by partnering with the American Boat & Yacht Council to create an online career center to begin addressing the problem. Now, we’re not naive enough to believe that this will solve the problem by itself, but we’re glad to be taking a step in this direction.
As I look out at our growth expectations for 2015, I see the workforce issues only becoming greater if we don’t start to act. This need for qualified employees is not unique to our industry. What is unique is the outstanding product and lifestyle and the culture they create. Let’s use that to our advantage and begin attracting more people to work in our great industry.
Northwest Marine Trade Association
2014 will be the third consecutive year that Washington state new-boat dealers have a year-over-year increase in unit sales. Through September, new-boat sales in Washington are up an impressive 23 percent in units and 40 percent in dollars. October and November sales have been strong, with 30 percent and 31 percent increases in units, respectively, and a whopping 78 percent and 51 percent increase in value. Impressive numbers as our members prepare for the Jan. 23-Feb. 1 Seattle Boat Show.
When I dig into the sales data it’s obvious that recreational fishing in aluminum boats is driving nearly half of the new-boat sales. The Northwest Marine Trade Association has worked hard with other advocacy groups, our Fish & Wildlife Commission and legislature to expand fishing opportunities for hatchery chinook and coho salmon, dungeness crab and shrimp. Passionate anglers recognize the opportunity and expanded seasons they have today and have responded by investing in new boats.
In the past two months we’ve seen a surge in large-vessel sales that has pushed up the average value significantly. Unlike sportfishing, these sales likely have more to do with overall economic conditions than anything else. The Puget Sound region is booming right now, with nearly 40 major construction projects under way and industry clusters like aerospace, financial services, information technology, life sciences and global health fueling employment growth that is almost double the national average.
For 2015 I expect another strong year of boat sales for our members. Manufacturers are developing new boats for the Northwest and dealers are taking on new inventory, which is evident in requests for space at the 2015 Seattle Boat Show. Combine all this with year-round boating, world-class destinations and great fishing, and I’m very optimistic for 2015.
Volvo Penta of the Americas
Signs are positive for a strong year in 2015 for the boating industry. Unemployment is down. Consumer confidence is up. Fuel prices are falling dramatically. Demographics are on our side as millennial families want to spend more time together in leisure activities.
For our diesel engine business, we project growth of about 5 to 7 percent in 2015. Builders are reporting a considerable backlog of orders — the best in more than five years. Marking its 10th anniversary in 2015, the Volvo Penta IPS is a mature technology, with more than 17,000 units sold. Our sterndrive business is also showing growth. We believe the new generation of Volvo Penta gasoline engines, building on the technology introduced in the award-winning V8-380, will have a positive impact on sterndrive sales in 2015 and beyond.
The Volvo Ocean Race 2014-2015 will have stops in Brazil and Newport. Like the America’s Cup races last year, this race is attracting attention to the sport, showing what life at the extreme is like. Many of the innovations from these high-tech racing machines will filter down into the boating industry in the coming years.
The challenge facing the boating industry will be to sustain the momentum and market growth. Discover Boating is promoting the boating experience, and boat shows are generating excitement and driving sales. New types of “boat clubs” promise a painless way to enjoy boating without ownership. How do we deliver on the expectations that are being stimulated by these marketing initiatives?
There are three keys to accomplishing this. The first is innovation. At Volvo Penta, we like to say that innovation is in our DNA. Innovation builds excitement and interest, and drives sales. Our “Easy Boating” initiative focuses on innovations like the award-winning Glass Cockpit that makes the boating experience easier and more fun. We believe operating a boat should be just as easy and intuitive as driving a car.
The second is customer satisfaction. This is an unswerving commitment at Volvo Penta. We’re very proud of our 11 consecutive CSI awards for our sterndrives. We will continue to lead the industry with innovative warranty and extended service plans, dealer training, factory technical support and shorter lead times for parts delivery.
We’re also making it easier than ever to do business with Volvo Penta. As an integrated helm-to-prop supplier, dealers and consumers can get service for their entire engines, drives and controls from a single source. We are also expanding and strengthening our dealer network in the Caribbean, South America and Central America, as well as North America.
Finally, the new generation of environmentally conscious consumers is increasingly concerned about air and water quality. Protecting the environment is a core value at Volvo Penta, and we’re making the cleanest-burning marine engines on the market today. We’re meeting all EPA, CARB and EU emission regulations — by a large margin. This, too, will help create a new generation of lifetime boating families with a passion for the boating lifestyle.
National marine sales manager
Statistical Surveys Inc.
Barring any economic mishaps, I believe the momentum we saw in 2014 will continue throughout 2015. The segments that were hot this year will continue to perform in 2015, i.e., ski boats, fiberglass outboards and pontoons.
There are a lot of great success stories in 2014, with some dealers and manufacturers having their best year ever. The manufacturers are really hitting their mark with new, innovative products packed with features and benefits consumers want.
We’re seeing a trend of consumers buying larger boats in segments like pontoons (sales up 15 percent for boats 23 feet and larger); fiberglass sterndrives (up 5 percent for boats 23 feet and larger); and fiberglass outboards (up 28 percent for boats 23 feet and larger).
In 2014 the industry saw continued recovery in wholesale and retail shipments in most sectors. At our own Regulator University and at the recent Marine Dealer Conference & Expo we noted that dealers’ attitudes had shifted from survival to growth. At the MDCE, dealers were exploring the possibility of taking on additional boat lines — an activity that alone indicates a level of optimism.
Dealers are on the front line. They hear and see consumer confidence long before the rest of us in manufacturing. Boats and accessories are discretionary purchases, so consumers need to feel confident in other areas of their financial lives before investing in a boat.
The consumer confidence level was at a post-recession high in October, and it dropped in November. We are hopeful that this was only a slight adjustment and that the Consumer Confidence Index will continue to rise throughout 2015. With the CCI, manufacturing activity and stock prices up and first-time unemployment claims down — all leading economic indicators — 2015 should see growth.
To grow and improve the boating industry, we need to give this confident consumer what he wants to purchase — products he/she can learn to use quickly and products that are reliable. Today’s boating customer has less leisure time to learn to operate boat and electronic systems and to wait for either to be repaired.
Our industry has come a long way from the early 2000s, when quality was a real issue. In the launch of the NMMA manufacturing certification program, Thom Dammrich said “a rising tide floats all boats.” And it has! The overall quality and reliability of boats in the marketplace is much higher today, and our consumer will — as he/she does with all other products — continue to expect us to provide this.
While reliability is important, it isn’t the only factor. There’s a need to understand more about what drives our current boaters toward boating and what it will take to bring new boaters into our sport. Most manufacturers have internal feedback systems for existing customers, and we are fortunate as an industry to have Discover Boating and the Recreational Boating & Fishing Foundation asking questions about what future boaters will expect. As an industry, it is up to us take this information and develop marketing strategies and products that will reach these potential customers.
Speaking of getting more people involved in boating in order to help non-boaters and lapsed boaters experience the thrill of being on a boat, the NMMA has offered, at some boat shows, HOST — hands-on skills training. Once someone is introduced or reintroduced to boating, it becomes easier to start talking with them about moving toward a purchase.
We have a great story to tell: Boating and fishing are great fun. As I look ahead for 2015, I see that we as an industry must remain vigilant in monitoring boating and fisheries issues, making sure that our rights to boat and/or fish are not restricted. Our job is to introduce others to the boating lifestyle and to help protect it.
Chairman and chief executive officer
At Brunswick, we believe that the global economy will remain challenging as conditions continue to improve, with GDP growth in major markets remaining at or below 3 percent. As for the global marine market in particular, our assumptions are for stable to modest growth, with the U.S. market — the world’s largest — approaching 175,000 to 180,000 units of new-boat sales over the course of the next 24 months.
That assumption is inclusive of a stabilizing to modestly improving fiberglass sterndrive/inboard boat market, which has not recovered as well over the past few years as aluminum fish and pontoon boats, which have recovered to 70 and 90 percent of 2007 levels, respectively.
But even with such varied results, the industry is fundamentally healthy and will continue to improve. Boaters continue to go on the water at record rates and are highly satisfied with the boating lifestyle. However, boating’s value is continually scrutinized as boaters weigh the cost, the time and the effort of boating, particularly relative to other leisure activities.
As an industry, we need to better understand consumers and deliver on their desires and aspirations for boating to make their time on the water all that they wish. Concurrently, we must drive out unnecessary costs to make boating a pastime that is more economical, affordable and attractive. To do so, we must seek product feature innovation that is meaningful and resonates with consumers. We can do this through deeply understanding consumers’ needs and motivations and then better incorporating those desires into our products and marketing while being mindful that we must do all that we can to reduce the consumer’s investment to participate in boating.
In short, our belief is that marine manufacturers need to win on product, as well as address the cost and value of product, to lure and retain boaters, convert used-boat owners into new-boat owners and ensure the long-term health of the industry, no matter the economic or political challenges.
President and CEO
Recreational Boating & Fishing Foundation
Recreational boating and fishing are poised for growth in 2015, and we as the marine industry need to take action to ensure it happens. While there are always factors out of our control, such as weather and the economy, both boating and fishing offer benefits that today’s and tomorrow’s consumers are looking for.
According to the National Marine Manufacturers Association, boating participation is thriving, achieving the second-highest percentage on record in 2013. And according to our 2014 Special Report on Fishing, both 2012 and 2013 saw the highest increases in newcomers to fishing ever, with 4.1 million in 2013 alone, an increase from the 3.5 million average per year between 2007 and 2012.
Research also shows us that our growth audiences, including women and Hispanics, both took to the water to fish more in 2013. With fishing as the No. 1 activity done from a boat, according to the NMMA, there’s a great opportunity to harness interest in other on-the-water activities from these groups.
I’ve heard a lot of buzz this year about engaging millennials in boating and fishing, as they are our nation’s up-and-coming/next generation. I believe this group is important, but I also want to point out that millennials share a lot of the same characteristics as our above-mentioned targeted growth audiences. Collectively, these groups are the future of boating and fishing, and they’re all looking for things they can do to disconnect from technology and spend quality time together with their family and friends — a perfect match for boating and fishing.
At the outset of 2015, I am hopeful that these trends will continue. Nonetheless, we all need to do our part to support growth.
How can we secure growth in boating and fishing in 2015? We need to continue to grow awareness of the sport among our target audiences and, in doing so, be inclusive of people in different life stages and cultures in our outreach. We need to provide exceptional customer service to our existing customers and we need to focus on recruiting new, non-traditional customers to ensure the future growth of the sport and the businesses that rely on it.
With good weather and economic conditions in 2014, the BoatUS towing fleet saw more boaters using their boats and we had nice growth in BoatUS membership. For 2015, we see the indicators for continued rising boat sales coupled with low fuel prices, which should help powerboaters feel comfortable spending more days away from the dock. These things, in conjunction with weather like 2014, could make for one of the busiest years for boating in a long time!
We are seeing more activity in the peer-to-peer rental markets. We know “lapsed” boat owners find this model appealing, but what it can offer the younger demographic is also exciting. I was encouraged at MDCE to see many marina operators with younger family members — sons, daughters — contributing to the business. Are we ready to offer their friends — the folks that wear their baseball cap backwards, who may have a tattoo or two, or have over 200 apps on their cellphone — an easy path to boating and boat ownership? Converting a 28-year-old gives us the potential for 40-plus years of business. So within the industry we really need to find ways to start them young, embrace technology and offer boating as a lifelong social outlet.
It doesn’t stop there. We need to promote diversity on the waterfront, too. Women and Hispanics are great growth opportunities. According to the latest estimate from the Motorcycle Industry Council, almost 12 percent of motorcyclists in the U.S. are now women. While that may not sound like much, it’s a 30 percent increase over the past decade and it’s been one manufacturer, Harley-Davidson, that has singlehandedly captured nearly all of that growth. How? By introducing two new models specifically for women, offering “garage parties” (remember Tupperware?) where women can gather to learn more about riding and offering instruction at every dealership.
Harley is delivering what this market asks for: strength, independence and confidence. We also need to work harder in 2015 to appeal to family-centric Hispanics, who now make up 17 percent of the total U.S. population and are forecast to make up 31 percent of it in 2060.
On the legislative front, It is critical that we continue to work with our Angling and Boating Alliance partners to ensure that the Sport Fish Restoration and Boating Trust Fund is reauthorized by Congress before it expires in May. This is the trust fund that boaters pay into when they purchase boat engines, fishing tackle, gear and gasoline.
In 2015 the new Congress presents an opportunity for Renewable Fuel Standard reform, which could fix the mandated increase in the use of ethanol. We’ll need to work together — industry and consumers — to ensure that Congress takes some responsibility for safe fuel for boat owners and other gasoline consumers. And we all must continue to educate boaters so they know that E15 (15 percent ethanol) doesn’t belong in boats.
Larry Russo Sr.
Owner, president and CEO
The Great Recession struck us over seven years ago. So why does it still feel like we haven’t fully recovered? Since 2010 our company has produced five consecutive years of healthy profits and the past two have set records for us. Net profit, as a percentage of sales, is the best it has ever been in the history of our company. And yes, better than the heydays of the late 1980s. Still, in many respects, we feel unfulfilled.
Perhaps it’s because we are reaping rewards from holding down expenses instead of selling more new boats. We are also not seeing any new job creation. We simply figured out how to get more out of less. There’s not much fun in that.
I have been doing this long enough to have experienced the recoveries that followed the recessionary downturns in the early 1980s and the early 1990s. As I recall, those of us that survived prospered very quickly in the post-recessionary periods. Within a year or two of those recessions, demand was back, sales took off and we were fighting to get product. We were hiring more people and opening additional locations to capture more market share. In general, not much of that excitement seems to exist today.
I see the primary issue as “weakening demand” for the boating lifestyle. The pressures of price and the constraints of time have caused buyers to step back and rethink a full-on commitment to boating. Sure, there are pockets of prosperity in our industry with respect to certain boat segments, pre-owned boats and “boomer” demographics. But the big picture is not in focus. We need to perform better as an industry. Here are some opportunities for improvement:
- We need to get our arms around the cost of our products. As I see it, we have brought a ton of exciting new product to the market in the past few years. However, it is mostly high-end product that is targeted at wealthy baby boomers. We have priced the next generation out of affording a new boat. If Gen-Xers are seeking the boating lifestyle, then they are buying a more affordable, pre-owned boat. We give them no option.
- We need to embrace new technologies to power our vessels. Just look at what has happened in the automotive world in the past 15 years with diesel, electric and hybrid vehicles. These are what customers are buying today. They look to the marine industry and see next to nothing in this category. Surely we possess the engineering expertise to create some innovative alternative propulsion systems. All it seems we are good at lately is jamming as many V-6 and V-8 outboards onto the transoms of very expensive pieces of fiberglass as possible. This is not a long-term strategy for sustained success.
- We need to generate more demand for boating. That means we need more promotion. Grow Boating’s Discover Boating campaign is ideally positioned to generate more exposure for our lifestyle. It simply needs more funds. The current funding model is now 10 years old. It needs to be revised, and every member of this industry needs to step up their financial commitment.
This is the reality of the boating industry today, as I see it. Can it get better? Sure it can. I’m all-in to make a positive contribution. Are you?
Yamaha Marine Group
What’s the outlook for 2015? To put it simply, new-boat consumers are stepping back in at a higher level and buying up feature content with new boats. We need to provide them with the features and benefits they are looking for.
Let me start by taking a look at the macro-economic items. Gas prices are down, and they may stay that way for a little while. That’s a great sign, and there are others. GDP is above 2 percent for a change, and employment numbers are better. Industry data tell us that more people are fishing and boating. Participation is up. These indicators, I believe, will lead us to even better fortunes this year and in the years to come.
Other important trends: Consumers want more horsepower. Across the industry, the average horsepower of outboards purchased has risen from 86 to 100 since 2010. In fact, new-boat customers want more value-added features, such as power anchors, navigation systems, multiple electronics displays and, yes, options such as Helm Master, Yamaha’s fully integrated boat control system. Couple that with the fact that Yamaha consumers, on average, have owned five or more boats in their lifetimes. These are not first-time buyers; they are veterans who are invested in the boating lifestyle. That means we at Yamaha — and everyone in the industry — need to provide feature-rich products.
Many Yamaha 4-stroke outboards have sophisticated double-overhead-cam, 4-valve-per-cylinder designs. Many have variable camshaft timing. These features provide benefits such as better response and stronger midrange torque. We also have counter- balancers on our most popular in-line 4-cylinder outboards. These provide the benefit of smoothness and quieter operation.
Yamaha is once again launching important new products, this time in the V MAX SHO lineup, and we see a lot of potential growth there. We have modernized our legendary F150, and new F8, all of them with more features than before. The official launch of these new outboards will take place Jan. 22 at the Minneapolis Boat Show.
Paxson St. Clair
Like everyone, we had a challenging 2009 and 2010, but we feel we recovered faster than the industry — mostly due to our investment in new-product development and dealer development.
Starting in 2011, we began to see stronger shows in the fall, and since then the market for our segment has continued to slowly and steadily improve.
To that point, 2014 was one of the best years in our history, and the sales unit figures are comparable to our 2007 sales.
For 2015, we are forecasting another good year for Cobalt, with sales growth in the high single digits, up to around a 10 percent gain (year over year).
Industrywide, we see a repeat of 2014, or maybe even slightly better. Our industry’s success is so tied to consumer confidence and how good people feel about their portfolios, and people are definitely feeling better and gaining confidence.
In the big picture we see two clear trends for our industry.
First, it appears that mid-sized cruising boats are starting to rebound, and we are beginning to see growth in the segment again.
At Cobalt, one of the two new product lines we introduced in 2014 is our first boat in the cruiser segment, the A-40, and it speaks to our belief both in that segment and in growth through new product development.
The second trend we all see is that as boating continues to get more and more expensive, the market is moving stronger toward the higher-end products. Affordability is definitely a factor for consumers and something that we, as an industry, need to keep a watchful eye on — the rapid growth of the entry fee for boating.
Granted, we are in the high end of the small to mid-sized boat market, and it’s a very competitive segment, but up and down the scale it’s an expensive investment that keeps shrinking the pool of participants.
The statistics might say the smaller boat segment is not back to the “good ole days,” but when you look at sterndrives 23 feet and up, which is the strength of that segment, that segment is showing steady growth, even if the small, price-point volume segment has not quite recovered.
We’ve been blessed with an outstanding group of dealers who consistently outperform the market.
We find that the dealers throughout the industry that are successful are breaking out of the traditional mode of selling and getting aggressive — getting out and meeting with the consumer and creating door swings any way possible.
The successful dealers are social media-minded and event-minded. The dealers who are promoting events like raft-ups, rendezvous, cruise clubs and making boating a lifestyle are winning. It’s not business as usual where you can wait for the door to swing — it simply isn’t happening, and those who make it happen are seeing results. The “game on” dealers are separating themselves as the strength of the market.
Efrem “Skip” Zimbalist III
Chairman and CEO
Active Interest Media
I believe 2015 should be an excellent year for the marine industry. There has been a step-change improvement in marine consumer attitudes over the last several months. There is a wealth of creative, responsive new product on the market that is now beginning to ship in volume. Credit, although at a slightly increased cost, will most likely remain available. And the domestic economy is gaining traction, but international demand will be very mixed.
As you walk the docks of the major boat shows and dealer showrooms around the country, there is a palpable improvement in the attitudes of visitors. For a combination of reasons, those who have been sitting on the sidelines have decided that it is time to get off the fence and make that long-delayed purchase. Buyers have done their homework and are ready to make a deal. Why now?
Consumer confidence continues to build as GDP growth picks up steam, housing prices are generally improving, the growth of employment has accelerated, inflation remains under control and fuel prices for the present have declined dramatically. Although a majority of Americans believe the country is on the wrong track, there is a sense that we’ve seen the worst of the class warfare and the criticism of economic success. It is beginning to be all right again to reap some of the rewards of your hard work. And of course each year we (and our existing vessel) get a year older, and the time to enjoy a new boat with friends and family is shrinking.
A second reason people are now in a buying mood is the wealth of new, innovative and responsive product that is now available in volume. At the last two Fort Lauderdale Boat Shows alone, literally dozens of revolutionary new boats, engines, accessories and services have been introduced for all types and sizes of boats. They respond to the way families are boating today and make it tempting, and almost mandatory, to upgrade to the current state of the art. And credit and insurance are available, although not yet back at previous levels.
That being said, the news is not all good. For that part of the industry that relies on foreign markets, there are several areas of weakness. Demand from Russians has cooled noticeably in the face of sanctions and geopolitical instability. The economies of China, Brazil and Venezuela are experiencing tougher times. And while low oil prices are good for consumers, they will provide a real jolt to those exporting nations that rely on $100-plus-per-barrel crude prices to finance their government programs.
And we must be vigilant to protect the infrastructure that enables our industry to thrive. Challenges to the accessibility of our waterways, cannibalization of marinas and well-intended but overreaching environmental regulations are among the greatest threats.
But all things considered, 2015 should be a very good year — perhaps the best since 2007.
This article originally appeared in the January 2015 issue.