A View from Here

Bill's Sisson's weekly Trade Only blog

Times are tough, but hope is alive

From the name to the format to the venue, the show formerly known as Strictly Sail Pacific has undergone some nips and tucks. Last week’s Strictly Sail Pacific & Powerboat Expo was two shows in one, officially, but the dominant theme was still sailing.

Jonathan Banks, executive director of Sail America, called it “fortuitous” that in a shrinking economy the combination of two boat shows into one could actually be bigger than the sum of the parts.

“We think it’s a winning proposition for everyone that will hopefully increase attendance and exhibitor value,” he said.

Good stuff for nada: The Small Boat Zone in the no-admission public area on the concourse packed some exciting displays with foiler Moths and oldies-but-goodies like the Finn dinghy and the Flying Dutchman. But clearly, a good part of the traffic at this show was driven by demonstrations, seminars, boat demos and sailboat rides for children. And why not? If you can’t sell boatloads of boats right now, you might as well sell boatloads of fun linked to the lifestyle. Hence, the seminar tents and the author’s corner were popular with folks who came to attend one or more of the 145 events.

The buds of green: The Green Boating Zone was somewhat of a letdown, with several empty tables in the tent and only few products on display. Even though the talk about sustainability can be heard more often now, it’s not yet in the industry’s DNA. It is an area of growth and opportunity though, according to Banks.

Optimism: In the sailboat harbor, Gerry Douglas, chief of Catalina Yachts, reported two sales (albeit not at the show) of the company’s new Catalina 445 cruiser. And others were optimistic, too. “It’ll be a good show,” said David Berntsen, the importer of the Weta, a zippy $11,000 trimaran from New Zealand. ”I expect to sell boats here.” Others, like Craig Fecker of Cruising Yachts, hoped that the positive response from the show indicates that the sailing market might be headed in a better direction.

By the numbers: While many are hopeful for the future, a look back reveals a rough ride. A survey of 126 North American sailboat manufacturers that was presented at the Sail America meeting by Sally Helme, publisher of Cruising and Sailing World magazines, showed that production levels haven’t been as low since 1991, when the luxury tax was dragging down sales.

• In 2008 U.S. sailboat wholesale production declined by 19 percent to 11,427 units.
• U.S. sailboat manufacturers cut employees by a combined total of 23 percent from around 3,000 to 2,300.
• The estimated value of sailboat production fell by 31 percent to $551 million.
• Imports declined by approximately 15 percent. Hardest hit was the 20- to 35-foot segment, with minus 45 percent. Larger boats (46 feet and above) increased by 10 percent, but presumably most were ordered before the downturn.
• Positive exceptions are multihull sales, which buck the trend and are up by 7 percent (retail), and the charter market, which has held fairly steady.

Good advice: As always in tough times, there’s no shortage of suggestions about how to make things better. Coordinating, communicating and sharing ideas on a grassroots level is the intention of Sailing Renaissance, an initiative that started in the Bay Area and now is seeking to replicate in other key boating markets across the country. John Arndt, from local sailing magazine Latitude 38, outlined what it’ll take to sell the sport of sailing to new audiences. It’s different things to different people, but the gist is simple: “We need more people to sustain the industry,” he observed.

No finance, no romance: The primary reasons for the problems in today’s marine industry, according to Mike Richberg from GE Capital, are falling home equity values and tight credit. “We are still here because we recognize the importance of our role,” he said, reassuring the audience about his company’s commitment to floorplan lending. “[But] the aging inventory is of concern.” Approximately 38 percent of boats in the showrooms are more than a year old, and 12 percent are older than 18 months. It’s a three-legged stool, Richberg said of the relationship between dealers, lenders and manufacturers. “If one leg fails, this thing is going to fall over.” The positives: Net income on inventory turn is in the black, with 0.84 percent. And with a decline of 18.6 percent, the sailing market fares better than the industry as a whole, which is down by 25.4 percent.

A silver lining: “It’s the perfect storm for boating,” Banks said in summarizing the situation. “Sales dropped faster and farther than anyone anticipated.” But there are signs that the slide might be slowing.

• On average, attendance of Strictly Sail shows this year has been on par with 2008.
• Retail sales at the shows are level or ahead of last year.
• Brokerage continues to be active.
• Customers can get incredible deals through boat show specials, but that only will last as long as last year’s inventory.

Banks sees opportunities to market sailing to a still growing population as a green sport and as a remedy for volatile fuel prices.  “Times are tight right now, but they will get better. People are still passionate about the sport.”

Dieter Loibner is sailing editor for Trade Only’s sister publication Soundings.

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