Mechanic Erik Klockars and I had a conversation the other day about the cost of boating while we winterized my boat and fiddled with a bunch of little things that needed tweaking and fixing. It’s a topic Erik and I like to kick around, even if we usually wind up agreeing to disagree.
“People don’t understand that the cheapest part of owning a boat is buying the boat,” Klockars declared. I asked if he’d seen the price of new boats lately, but when Klockars gets on a roll there’s no stopping him.
“It’s the hidden costs that are killing people,” he said. He rattled off a list we’re all familiar with: slip or dry-stack fees, winter storage for boats over a certain size, winterization, insurance, registration and the litany of routine maintenance costs associated with paint, zincs, oil, filters and so on.
“And that’s without even using the boat,” Klockars said.
The cost of winterizing a 40-foot twin-diesel boat and all of its systems — generators, refrigeration, washer, hot water heater, AC, icemaker — is easily more than $1,000, he said. Depending on the engine model, the iron breeze alone can take 27 quarts of oil.
“When you get a $300 bill in the marine industry, people bend over and kiss the ground,” he said.
Klockars continued: “I have no problem with the cost of a boat. When I started in this business in the ’70s, if you had to ask how much the boat cost it was a sign you shouldn’t be in boating. It’s getting back that way again.”
And that’s a good thing?
Erik is a helluva mechanic, but you wouldn’t put him on a committee to grow boating. However, his perspective on the cost of ownership is worth noting. It’s clearly a factor in retaining current boaters in the fold. And owners have to believe they are getting fair value for the costs, Klockars emphasized.
In his “2014 Industry Outlook” story in the upcoming January issue of Trade Only, Don Parkhurst of SunTrust Bank says he’s seeing some aging clients sell their boats and pay off their loans with no intention of buying another boat. For baby boomers with ample means, retirement equates to more time to enjoy boating, writes Parkhurst, senior vice president, marine & RV finance group manager. For those not as well-heeled, he continues, it means giving up their boats. (Overall, Parkhurst is hopeful that 2014 will at long last bring a “modest” pickup in growth.)
Russo Marine president and CEO Larry Russo also addresses cost in his “Outlook” story. “The price of new boats has more than doubled since 2000, and available credit remains very restrictive,” he writes. “This is not a recipe for growth and success.”
It’s mostly aging boomers with high net worth who are buying the high-priced premium boat brands, Russo says. The buying part of that trend is not sustainable, given there’s nothing we can do to stop the aging.
Russo said Gen Xers are now at the so-called “purchase-consideration age,” but they are hamstrung by a host of financial constraints: student-loan debt, mortgages, a slow-wage-growth environment and so forth. Most are not in a position to buy a new boat, he said.
Solution? “Smart people in the design, engineering and manufacturing sectors in our industry need to figure out how to reduce the cost of boats to make them more affordable to the next generation of buyers,” Russo writes.
Next week we’ll have more on the cost of boating from Jim Coburn of Coburn & Associates, who is chairman of the Recreational Boating Leadership Council’s affordability committee.