Powering into Profits

2. Powering into Profits • According to Statistical Surveys, 2017 US boat sales totaled 273,251, a 5.6% increase from 2016, which were approximately $37 billion. Sales of powerboats increased 6.8% during the fourth quarter and 5.2% for the year. • Of the total boats sold, 179,859, or 65.8%, were powerboats. The pontoon segment increased by 14.3% during Q4 and 7.8% for all of 2017. • Ski and wake boats increased 15.9% during Q4 2017 and 7.1% for the year, while outboard-powered fiberglass boats increased 5.8% for the quarter and 6% for the year.

3. A Strong Wind at Dealers’ Backs for 2018 • Both January and February 2018 had strong sales. During January, sales increased in the main powerboat segments by 2.9% YOY. The yacht and cruiser segment did especially well, with the 41’–65’ segment increasing 64.7% and semi-custom and custom +50%. • February sales in the main powerboat segments increased 2.5%. Pontoons increased 10.8% and ski and wake boats increased 11.6% YOY. Pontoon boats are popular in the Midwest, but more are selling in California (+70%), Texas (+20%) and Florida. • Florida and Texas, the top two states for boat sales, both had sales decreases during February, of 12% and 8%, respectively, due to bad weather. California sales, however, increased 44% and sales in Georgia and Washington each increased 30%.

4. Dealers’ Perspective Indicates Smooth Sailing • The Marine Retailers Association of the Americas Retailer Sentiment Index for February 2018 was 70, on a scale of 1-100, for the 3–5 year outlook, an 11-point decline from January. The short-term outlook decreased from 82 in January to 79 in February. • Seven in ten dealers said they expected horsepower to be significantly (38%) or moderately (32%) higher. Higher horsepower on pontoons appeal to young people. They forecasted that boaters will want to upgrade their engines during the next few years. • Dealers were optimistic about general new-boat-retail trends during January 2018, but thought new-boat inventory levels were too low. They also thought there was a need for an affordable entry-level boat to attract young people to boating.

5. Sailboat Sales Are Possibly Heading Towards Calmer Waters • Statistical Surveys reports only 1,764 new sailboats were sold during 2017, a decrease of 26.7% from the 2,406 sold during 2016. This was by far the largest decline in sales of any type of boat. • SoldBoats, another database that tracks brokerage sales, reports, however, 5,252 sailboats were sold during 2017, a 2% decrease from 2016. This resulted in $435.99 million in sales, a 6% increase from 2016’s $412.04 million. • At the Miami Boat Show during February 2018, vendors at the Strictly Sail area reported excellent traffic and very good sales. Of the HOST sailing sessions visitors, 21% were actively shopping for a sailboat and 29% expected to buy within 6 months.

6. Avoiding Demographic Shoals • Boating Industry’s State of the Industry 2017 report shows the number of boat-owner households in the US decreased from a high of 9.84 million during 2000 to 8.58 million during 2015. It is forecasted to decrease to 8.44 million by 2020, as US population grows. • When asked how concerned they were about aging buyers, 22% of dealers said they were very concerned and 13% said they were not concerned at all. Many Millennials are unable to buy or consider buying a boat because of student loan debt. • As US demographic patterns shift to become more diverse, almost half (48%) say non-Caucasian customers comprise less than 5% of their business. Another 30% say they are 5–10%; 13%, 10–20%; 6%, 20–30%; and 3% 30–50%.

7. Attracting Landlubbers to Boating • Research from Grow Boating showed 42% of people who shopped for but didn’t buy a boat cited the surprise of additional costs, 35% said they couldn’t find one in their price range and 21% said they didn’t know enough about boat ownership to own one. • To address shoppers’ surprise of extra costs, dealers can include a 3-year maintenance program with a boat’s purchase price, give buyers an accessories credit with purchase or partner with boat storage facilities and trailer hitch installers to refer new boat owners. • Dealers listed fractional ownership programs, more aggressive financing, lower prices and better digital marketing as ways to attract young, first-time buyers. Boat clubs and rentals can introduce people to the on-water experience.

8. Advertising Strategies • To attract younger Millennials, emphasize the social and fun experience of boating with friends. • Advertise shared ownership programs and used boats to introduce first-time buyers to the pleasures of life on the water and make it more affordable. • For older Millennials, showcase boating as a healthy family activity that promotes family togetherness and provides an adventurous alternative to kids’ phones, video games and other electronics.

9. New Media Strategies • On your Website and marketing materials, show young adults and boaters from the entire spectrum of ethnicities, cultures and sexual orientations having fun. Millennials (and Generation Z) are most the ethnically diverse generations ever. • Since Millennials heavily research online before visiting your dealership, provide them with information on boating, including accessories, permits, insurance, etc., on your Website, blog and/or social media pages. • Use your Website and social media pages to pair first-time boat purchasers with a guide during their first excursions, train them in safety and show them how to operate the boat, including navigation, reading the weather, docking, etc.