When the recession hit, the boating industry took a huge dive, as consumers cut back on big-ticket luxury items and financing opportunities dried up.
But now that the economy is on the path to recovery, boating is bouncing back – and it’s doing better than ever.
This summer, the National Marine Manufacturers Association (NMMA) reports that more than 88 million boaters are expected to go out on the water, and the Fourth of July is the biggest holiday for the industry.
“We always have an uptick the week before the Fourth of July, because there’s great weather and people want to be with their family,” says Rick Danderweel, the store manager of North Texas Marine in Fort Worth.
And it looks like this summer will keep getting hotter and hotter for the boating industry, which grew 10% last year – and is continuing to see huge growth.
Boating: A Made-in-America Success Story
When it comes to boats, sales are overwhelmingly American: The NMMA reports that 93% of the boats sold in the United States were manufactured domestically.
So when boating dropped from $36.5 billion in pre-recession sales to lows of $30 billion, American jobs were slashed as a result. The industry supports more than 950,000 positions in the U.S.
Chaparral president Jim Lane says his company, which manufactures sterndrive and saltwater fishing boats, now employs 650 workers – down from 1,200 before the recession.
“We’re the largest single-location boat builder in the U.S.,” says Lane, with the Nashville, Georgia plants spanning more than 1,200,000 square feet.
Lane adds that Chaparral is the largest employer in the area. “We’re of considerable importance to the local economy,” he says.
The past year and a half have been huge for the company, with Chaparral boasting a 40% increase in revenue in 2012. “In the first quarter of this year, we’re up 17%,” says Lane. Nautic, a manufacturer of family boats in Elkhart, Indiana, contracted by 66% during the recession.
“Our boating business has bounced back dramatically,” says VP of Sales Doug Sexton. “This year, we’re growing 10%, and last year we grew close to 20% as a company.”
“The overall bounce has to do with consumer confidence – there was a lot of pent-up demand,” says Sexton.
How the Recession Changed Boaters
The NMMA reports that over three-quarters of boat owners make less than $100,000 annually. Lane and Sexton say the recession’s effect on financing options took the wind out of boating sales.
While financing is becoming increasingly available, Sexton notes that more buyers are paying in cash. “Pre-recession, we saw a lot more financing deals. But we all learned a lot during the recession, and buyers aren’t willing to overextend themselves,” he says.
“Pre-recession, a large percentage of products were financed on home-equity loans. Very few, if any, are now using that kind of financial tool to purchase product,” he adds.
At Walker Marine in Florida, business manager Paul Spica seconds the trend, saying that his dealership is seeing a majority of cash buyers.
In addition to exercising more caution with regard to financing, shoppers are also hunting for great deals and versatility in their boats.
“Smaller, more versatile boats are coming back the fastest – boats that are a little less expensive and able to do multiple activities,” says Carl Blackwell, executive vice-president of the NMMA.
At North Texas Marine, Danderweel says shoppers are looking for more pre-owned boats.
“They have the perception that it’s a better deal,” he says, though he explains that the increase in demand has actually raised prices for pre-owned boats to an all-time high.
And Spica agrees that consumers are looking for “multifunctional boats that do more than one thing well.”
Above all, the industry experts say they’re seeing a lot more confidence from consumers when it comes to making big-ticket purchases.
“In southern Florida, our busiest time of the year is November until May, and then we usually see a slowdown in the summer,” says Spica. “We haven’t seen that slowdown at all this year – in fact, a lot are ordering for next fall already, and making that decision to trade in what they’ve got.”