A View from Here

Bill's Sisson's weekly Trade Only blog

Recreational boating is big business

During these difficult economic times it’s easy to focus on the negatives rather than the positives.  Though total industry sales of products and services was down 5 percent in 2007, we estimate the industry sold $37.5 billion of boating products and services last year. 

Recreational boating is a major U.S. industry. The vast majority of that product and those services were made and delivered by U.S. workers in the thousands of small businesses that make up our industry.

Why is this important? 

Nearly 19,000 boating businesses in the U.S. directly employ more than 154,000 employees in the U.S.  When we factor in indirect spending by boaters (trip spending) the economic significance of recreational boating exceeds $100 billion and the employment of over 337,000 people in the U.S.

Nationally, most boat segments saw declines in unit sales.  The exceptions were jet boats and inflatable boats which grew 10 percent and 17 percent respectively.

The average price of a new outboard boat, motor and trailer increased 7 percent over 2006 to $29,398.  

Boating is a solidly middle class lifestyle.  Nearly 75 percent of current boat owners have an average household income of less than $100,000. And, 95 percent of registered mechanically propelled boats are less than 26 feet in length.  Outboard boats are the most popular, making up nearly two-thirds of all registered boats.

While nearly one in ten U.S. households owns a boat, there remains significant opportunity.  There are more than 18 million U.S. households that don’t own a boat and that fit the profile of first time boat owners.  Russell Research reports that the Discover Boating campaign moved six percent of our target audience from not interested in boating, to interested in boating. By interested we mean having plans to buy a boat.  

To move someone from no interest in boat ownership to interested, to consideration, to shopping and then to purchase—it can take three or more years.

We’ve always known this would be a long-term initiative but having the patience to see our efforts through can be one of the biggest challenges.  Grow Boating is in its third year.  The industry’s united efforts are creating future boat owners.  

Reader responses to my blog have posed some questions I will be answering in future blog entries.  This has been an interesting experience for me thus far – to be able to share my thoughts with so many people.  The feedback has been insightful and if there are questions or comments that might require more in-depth discussion or detail I also welcome you to contact me directly.

Comments

6 comments on “Recreational boating is big business

  1. Lori Langone

    It’s exciting to learn that Grow Boating is having a positive impact on the recruitment of the next generation of boat owners, in spite of the current environment of weakened consumer confidence. Keep up the good work!

  2. James

    Well Thom, I must commend you for your optimism and positive outlook. Also, for your efforts with the Grow Boating Campaign and the industry in general.

    That being said, there becomes a point, sometime about when the water passes over the ankles and is approaching the knees, to perhaps consider the boat may have a leak and it’s time to react. I will agree that “boating is solidly a middle class lifestyle” but the word “is” is quickly being replaced with “was”. No, the answer is not to be negative or preach doom and gloom. The answer may be for industry leaders to start facing reality and stop painting these rosy pictures that are an insult to ones intelligence. The answer may be for industry leaders to offer some ideas, plans and in site to help guide the industry on this ride, a ride like no one has seen before. Forget all these wonderful statistics from the “past”. We all know how good the “past” has been to us. Take a look at what’s happening TODAY.Visit Northeastern United States. Talk with the folks in the trenches. See what’s happening TODAY. Forget who shoulda, coulda, woulda and is, involved in boating, from past history. It’s time to react to TODAYS world.

    One more thing, “Nearly 75 percent of current boat owners have an average household income of less than $100,000″. Really! I would love to meet the financial adviser, that can take “less than $100,000 a year”, for a family living in New England, supporting a family, a home and couple of automobiles so they can work, that can show me how you afford a boat.

  3. Alex Agnew

    What portion of the $37.5 Billion do you think comes from the sail market?

    If Discover Boating moved 1 million households into the boat buying column, folks who would not have been there otherwise, it has to be judged a success.

    Given the price of fuel, it would make sense for the industry as a whole to gear up it’s sailboat offerings to take advantage of the desire to reduce fuel expense and carbon footprint and the new supply of interested buyers.

    Anything being done specifically to offer these new buyers the greener sailing option?

  4. Island Boy

    I didn’t believe I was the only one who felt this way……… I am happy to see other contributors to the subject of the state of the marine industry, Discover Boating and Grow Boating initiatives.

    Alex A’s comments are interesting. The sailboat industry has suffered for a long time, maybe it is time for sailboats to make a come back.

    I really appreciate James’s comments, well said! The marine industry is not an unlimited growth opportunity as some would like to think. Just like the auto industry, the marine industry has size limits. Managed grow and a plan of action to ensure such would be a better direction for the NMMA to spend its “LIMITED” resources.

  5. Sailbadthesinner

    I would like to see the manufacturers step up and work together with the dealers. Finding solutions within each segment of the industry, with the attitude James mentioned above. Having Reps try to slam boats down your throat is NOT the answer, if we are going to survive. Raising dealer costs are one thing, working together to find solutions is another. More and more manufacturers are dropping the smaller dealers, the ones who carried them when times were tough. Now it seems to be whoever commits to the most boats, gets the line…regardless of their ability to represent it. This, my friends…will come back to haunt the big time manufacturers. Happy selling, and keep ‘em corners up!

  6. Andrew

    I work in the sailing instruction business. I believe I am one of the younger instructors/licensed masters. I am under 40 and have been sailing a long time. I think the future for sailing (and I also think boating) for the masses can be quite good if more fractional ownership type arrangements come into the market place. I know a lot of well educated 40 and under people who would love to get into the boating life-style. However with the cost of housing, saving for their childrens college education, and saving for retirement, there really is a very limited amount of disposable income available for boating and other luxuries. I know many people with household inciomes greater than $125,000/year whom are unable (although they would love) to pay for the lifestyle. I believe this may be a sign of things to come with the changing standard-of-living in the US. In my opinion, the industry is going to have to make boating more affordable for future generations by figuring out a way to provide the same products and services and less cost. If one calculates the price in terms of dollars/Day spent on the water, when one owns their own boat, it is unlikely there will be a lot of future boat sales. In my opinion, the Generation Xers and younger will have significantly less disposable incomes for such luxuries despite the fact they will be the most educated compared to any of the previous generations. Unfortunately, the education is not creating incomes high enough to cover the basics (i.e., house, food, childrens education, retirement saving) like it did with the previous generations. I hope the industry will respond to to the coming trends and start thinking about maintaining the longevity the boating industry has enjoyed in the past given that future generations in the US are going to have significantly less disposable incomes.

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