A View from Here

Bill's Sisson's weekly Trade Only blog

Gas prices are not a deterrent

As I travel to meetings in Florida and the warmer areas of the country, the comment I hear most often is about how many boats people are seeing out on the water.  There seems to be amazement in the industry that boaters are out on the water in force in spite of high gas prices.  As warm weather reaches North, I know I am watching the Chicago lakefront gradually fill with boats.   

Are people changing their behavior to conserve gas while boating?  Sure they are.  But, research and anecdotal  reports tell us that boaters will spend as much time on their boats this summer as they ever have.  They may take shorter trips, or anchor in their favorite cove more or spend more time at the dock. But they will be on their boats as much as ever.  Only one percent of boaters say they won’t use their boats this summer due to high gas prices.  Our research shows that over the past three years, boaters have been using their boats as much as ever—32-33 days a year.

A survey of Certified ValvTech marinas reported that for most boaters, good weather and favorable boating conditions have much more to do with how and how often they use their boats than gas prices do. The average boater only runs his engine 75 hours a year.  And, 95 percent of all boats in use are under 26 feet in length.  The vast majority  of boaters can enjoy all the benefits of the boating lifestyle without spending a lot on gas.

Why is this important to those in the industry who make their living on boat sales? 

Well, how often do you sell a boat to someone who has never been on a boat or to someone who has never had a boating experience?  I suspect the answer is, ‘very rarely’, if not ‘never’.  Participation in boating precedes boat purchases.  Participation in boating peaked in 1997 and declined for nearly 10 years.  We didn’t get where we are overnight and we aren’t going to turn it around overnight.  With fewer people experiencing boating the past ten years, is it any surprise there are fewer buyers?

The good news is we have had two consecutive years of increases in boating participation.  This is confirmed by studies done by Michigan State University and the National Sporting Goods Association.  Boating participation was up 6.2 percent  in 2006 and up another 8-10 percent in 2007. As we get more and more people on the water we are planting the seeds of our future success!  This increase in boating participation is occurring just as the industry has unified behind a strategy to grow boating and executed on that strategy.  We are only in our third year of the Discover Boating campaign and boating participation is growing strongly and the seeds of our future growth are being planted.

I spend a lot of time talking with reporters from newspapers and magazines from coast to coast.  They all want to talk about the same thing.  And, I tell them all the same thing.  Sales are off nationally, but not everywhere.  And participation is up.  Boating has its ups and downs and has for decades.  But, for the first time, when the current slump ends sometime next year, there will be more new buyers in dealer showrooms than ever before. Because we have taken the unprecedented step to unify behind a strategy to improve the boating experience while promoting the boating lifestyle.

I have more good news on the Grow Boating Initiative to share with the industry.  As long as Lois Caliri gives me this space, I’ll bring you my perspective.  I welcome your perspective too.

Comments

19 comments on “Gas prices are not a deterrent

  1. John

    I strongly disagree with the statement that gas price is not having an affect. I also am on the water every weekend, and find that people are not running their boat as long, and not as often. You will see more boats anchored out, instead of cruising the waterways. This is not a problem, but people are adjusting their consumption. I was out at Cayo Costa this past weekend, and more people were on the beach than normal, and only one boat was towing a tube, and that for only a few minutes. Usually there is a crowd of tubers and boats cruising by.

  2. Roger

    Some body is on drugs if you think that fuel cost has not effected boating. Look at all the news and on the Ohio River area here and many other areas it is gloom and doom mostly. No one can remember such a change in cost except maybe the Iran fuel embargo years ago. I am on a number of Marine Boards for various organizations and the over all news is while yes boaters will always find away most will be doing a lot of setting which effecs the whole Boat business. A lot of dealers all across this country are scard to death. Some say if your smart you get out now if you can. It will be along time before boating as we have known it will recover.

  3. Schwarzel

    As a dealer who is on the Ohio river we are seeing some boats on the water. Not a whole lot of running up and down the river like in past years. I have seen the smaller fishing boat market come back. People are going to be on the water, with a 9.9 or smaller power on “tin” boats. The days of selling big numbers of the big bass boat with large power is over. They are gone just like the drive in, and $.18 cent gas! Yes their will be some who can afford to buy the bigger rigs but the “bulk” of sales are going to be smaller rigs and I’ll bet sales for 90hp and smaller will go up. It is just like the 70’s…remember…small rigs is what sold then. Americans are going to use their boats, they just are not going to put a lot of fuel in them.

  4. William Gross

    We are niche internet marketer of new and rebuilt outboard engines and have seen a decline in sales engine sales since 2005. Our business in down more than 50% since 2006.

    Not only is higher fuel prices deterring the continuance of boating, but our customers won’t pay the higher shipping rates for our engines.

    I have met Mr. Dammrich and have a lot of respect for his role in the NMMA’s “grow boating” initiative. He is doing himself a great disservice when he comes out with this kind of nonsense. Brunswick announced today that it is closing it’s Sea Pro, Sea Boss and Leguna plant in Newberry, S.C. citing “we see permanent damage coming in the marine industry”
    With all do respect, is Mr. Dammrich reading any of this?

    When gas reaches $ 5.00 per gallon, (about a year away?), I will end my 30 years in the marine industry.

    Boating is on it’s way in becoming a rich man’s hobby like it was in the first half of the 20th century.

    William I. Gross
    President
    Premier Marine, Inc.
    Orlando, FL

  5. Rick

    If you read the initial post, it states that people may shorten trips or anchor more, but that they WILL spend just as much time on their boats. You do not have to be motoring all the time to still enjoy boating. Just being out there on the water provides a measure of stress relief. I agree that people may change their normal boating behaviors @$4-5 a gallon, but they’re still going to boat. Roger- if you’re on marine boards, you may also then be aware that there are some manufacturers and dealers that are fairing quite well in this down market. Proof that boaters still want to boat. Also, you may want to try a spell-checker there captain :)

  6. David

    Well, I for one, will not be out on the water for at least the rest of this year. I just sold my boat, a 26′ Center Console with twon Yamaha 150 4-strokes. Got the price I wanted, lucky I guess. The reason for selling? Yes, price of gas was one reason…anothe reason was that my in-the-water dockage went up from $295.00 per month to $380.00 with an additional increase of $50.00 per month on August 1, 2008. To make things more difficult was having to work 6 days a week, 11 hours a day just to keep even with gas, food, home and auto maintainence costs. I love boating. Been doing it for over 50 years, but other things must come first. And, for the monthly cost of dockage along, I can rent a pontoon boat for three days a month.

  7. Norm Schultz

    Leave it to Lois Caliri to get an industry leader like you into sharing your perspectives via a blog. That’s why she’s an outstanding editor (yes, I admit bias.) But I must say you’re more optimistic about the gas impact than I am. I’m sure retailers and marina owners will feel pain this summer. While I agree with you that many boaters will simply adjust their itineraries (like doing more anchoring as John suggests) but keep on boating, there will be a ripple effect retailers will experience. There is certain to be a decline in our gas dock sales and a similar negative effect on our ships stores and dockside convenience stores, etc. Moreover, if they run them less they’ll break them less and we’ll feel that in the service department. However, if history repeats, in every previous Arab oil embargo that drove gas prices to new highs in the U.S., boaters did find a way to keep boating. It will happen again. And on that note, I’m convinced you’re right-on-the-money when you say increased boating participation and the industry’s Discover Boating campaign have, indeed, planted the seeds of future success. Right now we are sailing through some very rough seas coming from the two “E”s — economy and energy. But we’ve had to sail these before and when we navigated through we hit new levels of success. I know that will be the case again and I couldn’t agree more with your perspective.

  8. C B

    Unfortunately getting to the dock in 80% of the USA requires from 1 to 3 hours of driving both ways. Most of these miles are driven in vehicles that get less than 18 miles per gallon. I don’t know the percent that will be towing the boat but it was substantial as the interstate system filled weekly in good weather. I recently read that boaters will be pulling their boat to auto gas stations more often this year and fighting the price that way.

    I find it amazing that in none of these blogs was there a mention of potential customers asking manufacturers to make boats more economical and operate more efficiently. Efficiency is usually less in nonplaning hulls and a lot can be done there. In this segment of the industry, research and development has depended on the demands of customers. Boaters, if you want to spend time making waves, make your own waves with the industry and require efficency and economy in the next boat you buy. It’s available today.

  9. Gus

    “Gas Prices Aren’t a Deterrent”…….Maybe not for the wealthiest of boat owners. But for the bulk of boaters fuel prices are certainly a deterrent. There is only so much money in the household budget for discretionary spending. If the cost of getting the boat to the water, and operating the boat substantially increases boaters are going to boat less. This is not to imply that boating will cease all together. But less “running” boat time will effect the entire boating industry. There will be less wear and damage so less repairs for marine service companies. Less money will be spent on accessories as this money is channeled to fuel. Less new boats purchased due to the falling value of used boats. This will also result in a glut of used boats for sale.
    Quote: “Our research shows that over the past three years, boaters have been using their boats as much as ever”……..The operative portion of this statement is “the past three years”. This year we have already seen record fuel prices. I don’t think the “past” three years are relevant. Fuel prices are expected to continue to rise, with predictions of $5 per gallon of gas before year end.
    I respect Mr. Dammrich’s opinions, but I think he is well of the mark here.

  10. Miami David

    I hate to say it , but so many of these boating publications that I read are just in total denial, or refuse ro print what is going on in this industry. Fuel prices? Nah, according to them, its just a temporary glitch. Major boat dealerships going out of business, and not a word mentioned in their publications. Why? Who is anyone kidding? The reality is out on the street. Of course fuel prices are and will continue to have a major affect on boating. Here in South Florida many of the marinas that a year ago had waiting lists now have vacancies. Thousands of used boats are for sale everyshere, National Liquidators doesn’t even have room to keep all the boats they are reposessing. Add to that, during this same time you have all these hot shot marina developers “clubbing” or going “condo” at their marinas for ridiculous prices. Add it all together. Overpriced storage and unaffordable gas prices will decimate this industry. It just does not make financial sense to own a boat anymore! I agree with the ceo of Marine Max when he says He can’t see what will be the catalyst to change this scenerio for the future.

  11. Matt

    People choose to be out on the water and gas prices are not going to affect peoples desire to do their passion.

  12. Craig Coatney

    The spin you put on this is interesting, you may want to consider another carrier in politics. Fuel costs are impacting every aspect of the marine industry. From the components and raw materials that are used to build boats to putting fuel in the tank. If something is not done to control and reduce fuel costs the marine industry will continue to decline.

  13. Miami David

    Hey Matt…….Fuel prices may not affect peoples DESIRE to do their “passion”, but it will certainly affect their ABILITY to do so. I hate to break the news to you, but it already has.

  14. Nyla Deputy

    Mr Dammrich is living in a fairytale world if he thinks people are going remain in boating or come into boating and weather this storm by sitting in the marina every weekend. People who have a boat are losing interest. By this time next year, the interest levels will be down even more. They might talk themselves into being satisfied to just take it a couple of miles down the river to the same gunkhole every weekend for this year but after a couple of years of doing that, the exodus out of boating is going to grow significantly.

    People who dreamed of buying a family cruiser are having a harder time justifying the cost and are replacing those dreams with something that is less costly. Let’s face it, there are MORE going out of boating than there are coming in.

    The storage lot of the marina where my boat is kept is still full of boats with the shrink wrap still on and next Monday is Memorial Day. Most of the boats in the storage lot have for sale signs on them. Why does he think these boaters are all sitting out the season? Could it be due to the high cost of fuel? Diesel fuel is already at $5 a gallon in the marina and expected to go higher. Gas is close behind. I know that I don’t have $600 or $700 per weekend for fuel. It sounds like a lot of fuel, but actually it is only 125 gallons which doesn’t take me too far on a round trip. If I can’t afford to take the boat out of the marina on a 2 hour ride, I don’t have a whole lot of interest in boating. I bought it to have some adventures with it. There is not much adventure in sitting on the dock drinking beer with the neighbors every weekend because it costs too much to go out.

    I’ll bet most of the boats in the marina storage lot are not paid for and the owners are still making payments. There have been 8 boats lost to the repo man since January in this one marina. Sounds like to me that people can’t afford to use them and can’t sell them so they just give them back to the bank.

    Mr Dammrich, you need to get out of the office more. How often are you taking your boat out? And when you do, how far are you going? How long are you going to be satisfied with a 4 mile round trip every weekend, to the same gunkhole?

  15. Mitch Pixley

    Dear Mr. Dammrich,
    Maybe you should consider getting your information on the state of the boating indeustry from your NMMA members and not Michigan State University and the National Sporting Goods Association. Every marine distributor and marine retailer are showing decreased sales and almost every oem builder reports decreased sales. We know you can not decrease the cost of fuel, but reporting bogus information only makes the NMMA look like a bunch of idiots. I’m wondering since you don’t feel that fuel prices are effecting the boating industry is the NMMA paying for your fuel and not your self?

  16. CarlM

    Responding to Mitch & Nyla. Dear Nyla your last paragraph begs me to respond and to remind all that Mr. Dammrich doesn’t own a boat. Like many folks working at the NMMA offices in Chicago. They say they feel it’s a conflict of interest if they had to chose one members brand over another.

  17. boatman

    To get any real news about the Boating Industry lately, you have to read the General Business Journals, The boating industry magazines have resorted to selective reporting. They report only what they want you to hear. Have you guys heard that many boat manufacturers are closing locations and laying off workers? Have you guys heard that Passport Marine, the #1 Formula Dealer in the world just had all their boats forcibly repossessed by Key Bank? Have you guys heard that National Liquidators is acquiring more and more locations to keep all the boats they are taking back? Have you guys heard that fuel at many Marinas is passing the $5.00 a gallon mark? It doesn’t seem that those who write for these magazines have heard any of this months news. They keep pushing their fantasies. I have to go outside the industry to read the relevant details about these, and other topics. WHY?

  18. James

    Anyone that thinks rising fuel cost is not having a drastic affect on boating needs to get out from behind the desk more often(or out from under that rock). It’s pure denial. Start with hoards of open slips (Greater Boston) in an area that has always had waiting lists. Continue on to record numbers of boats still under wrap, with customers that plan on taking the season off and likely will end up selling. What about many of the non affluent boaters, that just plain and simple, can no longer afford the fuel and related cost of boating. Finish up with the only “new” boaters entering the market place are the affluent. The “middle class” (if there is such thing anymore) no longer has the discretionary income to enjoy boating. It’s not necessarily the cost of fueling the boats, but the cost of fueling the automobile and heating the home that has wiped out the discretionary income of this the “middle class” buyer.These folks are clearly absent from the market place.

    Unless something drastically happens (soon) with fuel cost, boating will become a “rich man’s sport”. It’s a sad fact there will be unprecedented shrinkage of market and a fall out of dealers and manufacturers like nobody has ever seen.

  19. GM

    Maybe it’s time the recreational marine industry and the NMMA worked to reinvigorate the “sailing” side of boating. JoAnn Goddard had an interesting post last year (http://blog.tradeonlytoday.com/tradetalk/index.php/?p=35%22). It’s green, the wind is free, and folks can experience the boating lifestyle; they actually have the time to enjoy the voyage as well as the destination.

    While I cannot speak on a national level, I do know in certain area’s the sailing side of the service/aftersales business is actually doing quite well.

    Is it time for Dusty McCoy to look beyond Axius, Zeus, Total Command think about things like 3DL and canting keels?

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