- February 26, 2016
The 2016 presidential election evoked a lot of responses among the American public. Some people cheered, some people cried — and others went out and bought a boat.
On Nov. 10, 11 and 12, Action Craft Boats in Cape Coral posted a three-day sales record after taking 17 deposits for new builds. “Usually for us to get 17 deposits it might take two to three months,” says owner Chad Kovarik, who bought the fishing boat manufacturer in 2012. “We were pleasantly surprised.”
Action Craft's not the only one posting notable numbers. After record-setting sales in 2014 and 2015, Cannons Marina expects to reach a new pinnacle in 2016. “And I think it's going to continue to grow,” says Mike Carrigan Jr., general manager of the Longboat Key-based marina, which sells new and used boats as well as offers maintenance services. “I think we'll continue down the same path of double-digit growth for 2017.”
Over at Clearwater-based MarineMax, the company saw revenue growth of more than 25% for the 2016 fiscal year ending Sept. 30, with revenue of $942.1 million compared with $751.4 million in FY 2015. The nation's largest recreational boat and yacht retailer also saw same-store sales increase more than 22% in FY 2016 for the second consecutive year.
The boating industry is going strong on the Gulf Coast after several tough years during the Great Recession. It's a trend that's also playing out across the state and country. The National Marine Manufacturers Association had forecast 5% to 7% percent growth for the industry in 2016 and expects the final numbers to come in at the top of that range. “Heading into 2017, our sense is that we're feeling some pretty strong momentum and even acceleration in the sales of new boats,” says NMMA President Thomas Dammrich. “We're looking forward to 2017 to be on par with or better than 2016.”
A resolution to a tumultuous election year certainly isn't the only thing driving the industry's growth. The recovered economy is creating more boat buyers, especially folks who may have been on the sidelines during the downturn years.
“We're seeing strong consumer confidence, growing disposable income, and growing consumer spending,” says Dammrich. “All of those things contribute positively toward new boat sales.”
Low interest rates and gas prices are also helping to convince boat buyers to make a purchase. And when the housing market's strong in this area, that tends to mean good times for the local boating industry. “People who move here move here for the lifestyle,” says Carrigan. “The first thing they do is buy a house. And the next thing they do is buy a boat.”
Florida's year-round market for boating has also helped its rebound. The Florida Department of Highway Safety and Motor Vehicles says that in 2015, 915,713 boats were registered throughout the state. There was almost $2.6 billion in new boat, engine, and accessory sales in Florida in 2015, which was up 11.4%, and Dammrich anticipates even stronger numbers for 2016. “The boating market in Florida is as healthy as ever,” he says.
For MarineMax, the recession was a lesson in the importance of a diversified portfolio. The company sells everything from small fishing boats to large motor yachts. “We're very happy with the brands that we carry and the differences between them,” says Chuck Cashman, MarineMax's chief revenue officer. “And we don't have a lot of brands that overlap, so there's no fighting internally with a buyer over two brands of boats.”
Cannons Marina has found that the opposite approach works best for it. Over the past couple of years, it's pared down to just two brands — Grady-White saltwater fishing boats and Yamaha outboard motors. “I think we're very efficient because of that,” says Carrigan. “Both brands are number one in their category and people seek them out. Our inventory dollars are lower now, but our sales are up.”
Inventory management has become an important part of the post-recession recovery. “The downturn taught a lot of people that a high field inventory isn't a healthy thing,” says Cashman. “We don't need a truckload of boats in Minnesota in January; we need three truckloads to get there in May. So we're working closely with every single one of our manufacturers to make sure we get the right boat at the right place at the right time.”
That means many manufacturers are producing to dealer and customer orders, which can lead to a backlog of orders, especially when sales are up. Action Craft went from building 20 boats a year in 2012 to more than 80 boats in 2016 and predicts it will make about 110 boats in 2017. It has a five-month waiting list for delivery. “Which is good and which is bad, because sometimes people don't want to wait,” says Kovarik.
Keeping up with growth can also be a challenge from a staffing perspective. “For every salesperson our company has, we have two people in service to service the boats that we sell,” says Cashman. “But the labor pool of solid marine technicians is getting smaller. It's a challenge we deal with every day, but we're managing it. We have some service managers with a little more gray in their hair.”
Trends and differentiators
Buyers these days are looking for boats that mix innovation with versatility, which is helping to drive increases among certain segments of the market.
According to NMMA, sales of pontoon boats were up 9.7% and saltwater fishing boats were up 7.8% in October 2016 compared with October 2015. Sales of sterndrive boats —which combine inboard power with outboard drive — are lagging, however, with a decrease of 1.5% over the same time.
“An outboard-powered boat is more versatile and easier to maintain,” says Carrigan. “And they outperform stern-drive boats.”
Adding to their appeal is the fact that manufacturers like Grady-White have been making what used to be strictly fishing vessels more family friendly by adding cushioned seating and dual consoles. “We're seeing dual-console boats become as popular or more popular than the center-console boats, which is what people think of when they think of outboard-powered fishing boats,” says Carrigan.
Changes in boating habits are also impacting sales trends. Cashman says 10 to 15 years ago, MarineMax sold a lot of sport cruisers designed for weekend or weeklong trips. “Now we've seen that shift to luxury day boats,” he says. “People today have far more money than they have time.”
Action Craft boats have several proprietary features that help drive sales, including the company's Qui-Dry hull that's designed for a quieter and less wet ride. Their boats also include a foam and fiberglass liner that creates a smoother and more stable ride for driver and passengers. “When we take people for boat rides, we have a basically 100% sales conversion,” says Kovarik.
Dealers will be showing off the latest and greatest in boats at upcoming boat shows, which lead to about 40% to 60% of annual sales, according to Dammrich. “Attendance has been slowly growing over the past couple of years,” he says. “In the second half of 2016, we've seen some really strong acceleration in growth and attendance, which indicates that more people are shopping.”
Fort Lauderdale-based Show Management produces five boat shows in Florida. At its December 2016 St. Petersburg Power & Sailboat Show, attendance was up 5% over the 2015 event, and the number of boats on display increased 18%.
“That shows the strength in the industry,” says Daniel Grant, a spokesman for Show Management. “Builders and dealers are confident enough to bring more boats to the show. The more they bring, the more expensive the display, so they have confidence in the market and in the buyers.”