Archive for » January 23rd, 2018«

Attendance, sales surpass expectations at Toronto Boat Show

The 60th annual Toronto International Boat Show, North America’s largest indoor boat show, bids farewell to another banner year on Sunday, Jan. 21, with impressive results.

Attendance at the 2018 Show totalled 77,493, an increase of 1 percent from 2017 (which was one of the highest-attended in the past five years at 77,105). Widely regarded among marine manufacturers and retailers as the flagship economic indicator for the boating industry in Canada, demand for exhibitor space at the 2018 show sold out in record time in early fall of last year to fill the Enercare Centre with over 550 exhibitors, 1200 boats, and thousands of accessories and services.

“Exhibitors had high expectations coming into this year’s show following what was one of our strongest for attendance growth in 2017 (10% higher than 2016) matched by robust sales,” said Cynthia Hare, Show Manager for the Toronto Boat Show. “We’re continually focused on expanding our strategies that bring qualified buyers and potential future boaters to the show. Our aggressive marketing, special events and education programs have been instrumental in connecting exhibitors with consumers.”

New this year, the Toronto Boat Show introduced a $5 After 5 p.m. ticket and free parking after 4 p.m. on weekdays, which offered great value to attendees.

Despite high water levels in the spring and mediocre boating weather across the province, consumer spending throughout the show dominated the conversation amongst sales exhibitors and staff.

Dave Mayhew of The Boat Warehouse (dealer for Four Winns, Glastron, Wellcraft, Lowe) reported, “We are very pleased with the success we’ve had at the Toronto Show and excited to see our sales getting back to record numbers. The quality of traffic was stronger than in recent years, resulting in a very positive outlook for the rest of 2018.”

Save the Date: The 61st Toronto International Boat Show is scheduled for Jan. 18 – 27, 2019 at the Enercare Centre.



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Largest Indoor RV & Boat Show at Southaven RV & Marine – DeSoto Times

The Largest Indoor RV Boat Show at Southaven RV Marine in Southaven attracts thousands of travelers, campers, boaters and outdoor recreation enthusiasts each year.

Already in its ninth successful year, the event is sure to please all who attend.

The 2018 event is scheduled for 10 a.m. to 7 p.m. Thursday, Jan. 25 through Feb. 24, 2018.

“As the region’s first and longest, continuously running RV and boat show, the Southaven RV Boat Show provides outdoor adventurers an early preview of the many new and exciting products and services they will want for the upcoming 2018 recreation season,” said the show’s producer, Jeff Turnbow. “For example, many will be surprised at the new Winnebego line as well as our big expansion of boat brands and models.”

Turnbow says businesses or organizations that provide products and services that RV and boat owners would be interested in will want to participate in the show and can contact him at 501-505-6278 about available exhibit space.

Beginning Jan. 25, visitors can experience approximately 400 class A, B and C motor homes, fifth-wheels, pop-up campers, tent trailers, sport utility trailers, vans, tow vehicles, accessories, boats, and more at the Southaven RV Boat Show.

The Largest Indoor RV and Boat Show of its kind in the USA will feature many discounted up to 40 percent off model end clear outs and new manufacture incentives. Enjoy seeing the latest and greatest in boats and RVing. Kids will also enjoy their new free interactive kids zone. Admission is free.

The Indoor RV and Boat Show will be located at 5485 Pepper Chase Road in Southaven.

Southaven RV Marine, a locally owned and operated business, has become the largest indoor RV and marine showroom in the country. Owners Mark and Carlene Hixson were recently presented with the nationally coveted customer service award and top sales awards for Mississippi.

Southaven RV and Marine has grown to become recognized as one of the largest RV Dealers and Boat Dealers in the USA

“We want to provide each and every one of our customers with that wow factor. Whether it be in offering parts, service, or a new RV or boat, we’re here to provide an exceptional travel experience! If we stay focused on these specific goals, then our sales, customer referrals and satisfaction will continue to rise. This is recognition that we are focused and reaching our goals as a team”, said Hixson, CEO and co-owner, Southaven RV Marine.


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Steady as she goes

The pontoon boat segment was the first to recover in the wake of the downturn, and it continues to post steady and consistent sales growth year after year. Is this the new normal?

“We’re again looking at growth in the high single-digit range.”

“We expect growth to continue at the same rate, or even a little better than what we saw last year.”

“We have no reason to believe next year will be any different.”

For the past several years, statements such as these have been a part of virtually every conversation about the booming pontoon boat category. 

Pontoon boat builders talk of expanding their plants to boost production, as former pontoon builders return to the segment with all-new models, and V-hull manufacturers leap into the fray with new pontoon lines of their own, some purchased and others home-grown. 

Manitou’s pontoon offerings include luxury, leisure, and angler models.

There’s no question that the pontoon boat market has provided the foundation for the resurgence of the recreational boating industry. The question in everyone’s minds, however, is how long can this go on? 

In the years immediately following the downturn, there was some belief that the rapid growth in pontoon sales was just a bubble, one which would see its day in the sun then collapse under the weight of market saturation. 

But no one believes that now, as it becomes increasingly clear that the once humble pontoon has completely replaced the formerly ubiquitous fiberglass runabout as the core of North America’s boating culture. 

Pre- and post-downturn sales data support the notion that what we’re seeing is not a bubble at all, but a new state of normal in the recreational boating hierarchy. 

According to Grand Rapids, Michigan-based Statistical Surveys Inc. (SSI), in 2005 American boat builders shipped more than 66,000 fiberglass runabouts and deck boats, compared to approximately 44,000 pontoons. 

But since the downturn, things have shifted radically. The expectation for 2018 is that pontoon sales will climb to over 50,000 units, while sales of fiberglass runabouts and deck boats will top out somewhere in the 17,000- to 18,000-unit range. Where pontoon sales have now eclipsed their pre-downturn high water mark, sales of fiberglass runabouts remain only about one-third of their pre-downturn levels.

The Harris V series pontoon features a center console design with a fiberglass exterior.

It’s a rate of change that may even be accelerating. SSI notes that for calendar year 2017, sales of pontoon boats in the U.S. grew by 7.20 percent overall, while sales of fiberglass runabouts and deck boats dipped by 4.09 percent. 

On a 12-month rolling basis, pontoon boat sales increases were reported for virtually every Basic Trading Area (BTA) that SSI monitors, with the sole exception of Houston. Yet in spite of the catastrophic destruction caused to that region by Hurricane Harvey, pontoon sales in the Houston BTA dipped by only 2.33 percent below 2016 levels. Until the hurricane, the Houston BTA was trending to finish the year with positive growth too.

In other markets that enjoyed more stable weather, pontoon sales flourished, with double-digit year-over-year growth reported for markets like Atlanta, Birmingham, Milwaukee, Knoxville and New York. The Fort Wayne, Ind. BTA led the way in 2017, posting an astounding rolling YOY growth of 22.43 percent. 

“We’re seeing strength at the retail level across the country, no question about it,” said Peter Barrett, senior vice president of marketing and corporate development at New Paris, Indiana-based Smoker Craft Inc., builder of the Starcraft, Sylvan and SunChaser pontoon lines. “The boomers are still active in the market, but we’re starting to see more younger buyers who recognize the do-it-all nature of these boats. They appreciate the pontoon’s ability to accept higher horsepower outboards that offer better performance, and they value being able to accommodate a lot of people on the boat. Pontoon boats are the SUV of the water right now, so they appeal to a diverse range of buyers.”

Premier’s Escalante features a step galley and curved stairway enhanced with Tessellation stone steps and LED lighting. The pontoon layout includes a galley slide, hard-sided bath/changing room, a refrigerator, wine cooler and sink.

Versatility is key

Part of that growing appeal lies in the extreme adaptability of the pontoon platform. The same basic boat can be used with equal effectiveness for fishing, water sports, twilight cruises, taking the family for picnics on distant islands or just hanging out at the sandbar. 

Boomers look at the pontoon’s wide entry gates as providing easy access for elderly relatives, and the flat floor being able to accommodate a wheelchair. Millennials see those same entry gates as offering easy dock-level access for a pregnant spouse, and the flat floor as able to accommodate a baby stroller. The same boat is seen by different buyers in entirely different ways.

“We really thought the market was going to be a big influx of boomers, all coming to that age where it’s time to retire and get something with greater stability, something that they can enjoy with their grandkids,” said Brunswick Freshwater Boat Group President Jeff Kinsey. “In fact, what we’re seeing are boomers, and millennials, and GenXer’s in between all participating in the same market at once. That’s extremely unusual. Pontoons are attracting a broad demographic range of buyers, and a large part of that is the result of their versatility. 

“The other thing we’re seeing today is that people just are not overnighting on their boats like they used to,” Kinsey said. “There’s been a clear shift toward day boating, and that speaks directly to the pontoon with its seating capacity, its open space, its amenities and its comfort.”

Market data from the National Marine Manufacturer’s Association (NMMA) confirms the shift toward day boating and away from vessels with overnight accommodations. 

The 2018 Geneva Cruise 24 LR DH from
SunChaser features four wrap-around
loungers and seating for 14 passengers.

Over the past five years, pontoon boats have earned a market share in the range of 20 percent for all boats combined. Yet over the same period, market share for cruisers with overnight facilities has consistently held in the low single digit range. For example, in 2017, pontoon boats enjoyed a market share of 20.6 percent, compared against 3.2 percent for cruisers.

What’s even more interesting is the pontoon’s relative market share among boats powered by outboard engines. For 2017, pontoons represented nearly 32 percent of the outboard-powered market with a whopping 31.8 percent share – a figure that has been consistent across the past five years.

Designed for today’s buyer

The widespread appeal of pontoon boats is also supported by the sheer variety of models available in today’s market. Few other boat categories can claim to appeal across such a wide range of sizes, feature sets or price points. 

“A lot of the conversation around pontoon boats in recent years has focused on high performance. While that’s an important part of the market, we have to remember that first-time buyers and young families with small kids aren’t starting out with fully loaded luxury models powered by twin 300s,” said Greg VanWagenen, director of marketing and communications for Manitou Pontoon Boats. “That said, they can buy a nice pontoon like our Aurora VP with a 150-horsepower engine for somewhere in the low to mid $30,000 range. A boat like that is absolutely comparable to what a runabout can offer in terms of speed and overall performance, plus it offers a lot more room for passengers and their gear. So I think buyers are starting to weigh those options as they shop different types of boats, and we’re seeing more of them gravitating toward pontoons than they used to.”

Apart from adaptability, practicality is also seen as a key element in the pontoon boat’s appeal, especially to younger buyers. 

“We’ve had a good following with the millennial group, mostly because the pontoon boat seems to be a no-nonsense purchase,” said Premier Pontoons President Lori Melbostad. “It’s something that’s functional, and versatile enough to be able to do it all. We have good following among the mid- to late 20 year-old group that doesn’t just want a water sports boat. They’re looking for something that can do a lot of other things as well, and that’s where a pontoon really delivers.”

While it is possible to find pontoon boats today ranging from less than 16 feet to more than 33 feet in length, the core of the market is represented by boats in the 21- to 26-foot range. 

NMMA pegs boats in this class as accounting for nearly three quarters of all pontoon sales in 2017. SSI notes that 23-foot and 25-foot boats led all other lengths in sales growth, posting year-over-year gains of 18.15 percent and 14.02 percent respectively. These boats represent the sweet spot in the pontoon market, being large enough to handle bigger outboards and offer performance, while remaining trim enough to meet a range of price points and allow for sales volumes.

Starcraft Marine’s EX Cruise 22 R is one of five new pontoon layouts in the company’s cruise and fish model line.

“Sales of higher horsepower boats are off the charts,” Melbostad said. “We’ve never seen them this strong. Dealers are not afraid of stocking boats that are going to be equipped with the higher horsepower motors because they know they’re going to sell them easily. Our overall volumes are down this year because of the company’s reorganization, but mid-line boats with a powerful engine on them … they’re the meat-and-potatoes boats. The reality is that not everyone is going to buy a 12-foot wide pontoon boat with triple engines on it, but everyone wants some level of performance.” 

Achieving that magical balance between performance and affordability has been key for pontoon builders. “There’s a lot of recent attention on high-end boats that go 60 or 70 miles an hour with twin engines and triple tubes,” Kinsey said. “But the great thing about a pontoon is you don’t have to go that way to have fun on the water. You can get a basic boat with a single 200 horsepower outboard and still enjoy excellent performance. You can go fast, you can do water sports, but you can also just relax and enjoy the day. Pontoons allow consumers to enjoy a bit of performance while still having all the seating and all the features, and they offer that over a wide range of price points.”

While the trend toward higher horsepower began years ago, a newer evolution is taking place at the back of the boat where the traditional twin loungers are increasingly giving way to more adaptable seating arrangements, suiting the demands of today’s buyer. “We see a lot of customers gravitating toward boats with more utility in the stern, whether it’s aft-facing seating that overlooks the back deck, or more versatile seating like lounges that convert into a table,” Barrett said. “We’re seeing more demand for innovative furniture and layouts that can serve multiple functions. We’re also seeing a lot of growth in our higher-end fishing pontoons, which offer plusher features, bigger fishing seats and more versatility that what you can get with a standard back seat.”

With their comparatively modular construction, builders generally have an easier time reconfiguring pontoons with furniture changes or feature upgrades that they do reconfiguring comparable fiberglass boats, which might require significant changes to the deck molds. This not only allows for more rapid product development and evolution, it also provides manufacturers with a means of achieving a level of mass customization. “We’re seeing some customers looking to customize the rail color, or the panel colors, for example,” Barrett said. “Other customers look for custom interior colors and different flooring options, and we can provide those with a pontoon boat.”

Smoker Craft Inc.’s pontoon brands include Starcraft, SunChaser and Sylvan. The company continues to see strength at the retail level across the county.

The look ahead

A stable economy, continuing low interest rates, comparatively low fuel prices and robust consumer confidence give  little reason to believe that the annual growth in the mid- to high-single-digit range that we’ve seen in the pontoon segment over the last several years is likely to change. 

If anything, North American sales of pontoon boats could grow further as the Canadian economy picks up steam. 

According to NMMA Canada’s 2017 Statistical Abstract, retail dollar sales for new boats and outboard engines in the Canadian market totaled $2.3 billion in 2016, a 9.2 percent increase over the previous year. Outboard engine sales were up in nearly all provinces, with growth led by Ontario (up 8.3 percent), British Columbia (up 7.8 percent), the Atlantic provinces (up 7.1 percent) and the Northwest Territories (up 7.8 percent). 

“The Ontario east market has been huge for us this year,” said VanWagenen. “I think we signed 10 or 12 new dealers in those provinces just in the last year or so.”

There is also potential for further market growth here in the U.S., as anticipated tax reductions could further boost consumer confidence. 

For now, though, it’s steady as she goes for the pontoon category, and a promise of smooth sailing for at least another year.

 



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2018 Forecast: Consistent growth will mirror existing conditions

Forward momentum is likely to continue as the boating industry gets ready to navigate a seventh consecutive year of growth.

From a macro standpoint, market success remains on the horizon. 

The industry has the wind at its back and is being propelled favorably by rising real estate sales, a strong stock market and an improving economy.

According to data from Statistical Surveys, Inc. through September 2017, year-over-year sales growth ranged from 4 to 6 percent. At the same time in 2016, sales increased 5 to 6 percent.

“This year is really going to mirror 2017,” said Ryan Kloppe, director of sales at SSI. “Potentially, we are looking at 4 to 6 percent growth. The same segments are going to continue to produce.”

Data from Info-Link Technologies paints a similar picture, but more mid-range. 

According to Peter Houseworth, Info-Link’s director of client services, 2017 began with a fairly consistent growth pattern, but Hurricane Harvey and Hurricane Irma had a negative effect.

“Those storms tapped the brakes a little bit,” Houseworth said. “We’re still running in the 5 percent range for the year, so by and large, we’re in the same ballpark.”

Houseworth said there was a slight moderation in pontoons, which were running at 8 percent in June and just above 7 percent in October. Saltwater fish also declined. “Those two segments have been supporting the industry from a volume standpoint,” Houseworth said. “What happened in Florida basically cut the growth rate in half for the year.”

BoatUS estimates indicate more than 63,000 recreational boats were damaged or destroyed as a result of Hurricane Harvey and Hurricane Irma, with a combined dollar damage estimate of $655 million for boats only.

Breaking down the 2017 season storms, Hurricane Irma damaged or destroyed 50,000 vessels with approximately $500 million in recreational boat damage. About 13,500 boats were damaged or lost costing $155 million in boat damage as the result of Hurricane Harvey.

In a post-hurricane follow-up, BoatUS Public Affairs Vice President Scott Croft said he received encouraging news from boaters regarding replacement of losses.

Source: Boating Industry survey, December 2017

“Everybody said they were going to buy another boat,” Croft reported. “There wasn’t anybody who said, ‘That’s it.’”

Boating Industry readers expressed overall optimism in our December industry forecast survey. 

Eighty-one percent of survey respondents said their 2017 revenue was up from 2016, with 55 percent of all survey respondents saying revenue was up 10 percent or higher.

Clouds could form over the industry only if a major economic downturn or another negative event, such as weather, suddenly appears, Kloppe said.

“I don’t think interest rates will be able to go up too much. I think they will slowly inch up throughout the year, and that probably won’t have an impact on the recreational boating industry,” he said. “Barring a major economic collapse, or a black swan event like terrorism or war, it looks good for 2018.”

Segment by segment

In 2017, four different market segments – aluminum fish, pontoon, outboard fiberglass boats, and PWC – had over 50,000 units sold, Kloppe said, adding SSI’s forecast includes PWCs topping 60,000 units. 

“That trend will continue,” he said. “In 2017, there was some growth in ski, wake, and the jet boat segments, but you are talking minimum units when compared with the 50,000-unit categories.”

Unit sales in the sterndrive segment will continue to decline, down 4 to 5 percent for the year, Kloppe added.

The sterndrive market is still challenged, and has been for a long time, Houseworth said. It will continue to exist, but be smaller. 

Source: Boating Industry survey, December 2017

“Ten or 12 years ago, the sterndrive market was 50,000 to 60,000 units a year. Now, it’s 10,000 to 11,000 units,” he said. “If you look at many of the dyed-in-the-wool sterndrive boat manufacturers, they are all offering outboard models.”

Kloppe was slightly more optimistic when taking a deeper dive into sterndrive segment data. “In 2017, the 20- to 25-foot category was actually up 4.75 percent, and boats 31 feet and larger were up 2 percent. There is some light there, but overall, it is trending down.”

SSI reports aluminum fishing boat sales growth approaching 4 percent in 2017, and pontoons at 6 to 7 percent. Saltwater fishing boats from 13 to 50 feet tallied sales near 30,000 units; that figure represents 2 percent sales growth. Sterndrive sales were down 3.5 percent, deck boats up 3.5 percent, bass boats 4 percent and ski boats around 6 percent. Jet boats are expected to have 5.5 percent growth.

In its 2017 reporting, SSI upgraded runabouts to include boats 16 to 40 feet in length. 

“We’ll probably have to expand this segment again,” Kloppe said, reporting growth of over 27 percent. “People are making more models available.”

Regarding propulsion, outboards continue to drive growth. “Fiberglass boats with outboards are hovering around 4 percent,” Kloppe said. ““We’ve had six consecutive years of growth,” Kloppe said. “There’s zero reason to believe 2018 won’t become a seventh year.” 

Houseworth said the pace of technological change within the boating industry continues to accelerate. 

“Boat sizes are increasing, and you are getting more and more power for less money. As things develop, it’s more plug and play,” he said.

Source: Boating Industry survey, December 2017

Outboards are still doing well, Houseworth said, adding the market has moderated a little bit.

In 2016, outboards were up almost 8 percent, and in 2017, growth was slightly more than 4 percent. 

Out of the Top 10 boating states, nine had growth in 2017, Kloppe reported. California had double-digit growth for the past two years. Boating activity has picked up after a series of droughts, he said.

“If the economy keeps humming, people are going to have more money in their pockets,” Kloppe said. “It’s likely tax reform will help the recreational boating industry.”

Overall economic conditions were a top concern for Boating Industry readers in this year’s industry forecast survey, with 72 percent of respondents reporting that issue as “very important” to their overall business success in 2018. 

Consumer confidence was very important to 58 percent of respondents, followed by weather (41 percent), tax reform (39 percent), and government regulations (33 percent).

Cautious optimism

“We expect 2017 to finish up at about 6 percent, with about 260,000 new powerboats sold,” said Thom Dammrich, president of NMMA. “Our outlook for 2018 is for another 5 percent to 6 percent increase in unit sales.”

From a legislative standpoint, the year ended with a flourish of pro-industry news coming out of Washington.

While no legislation of the magnitude of the Tax Cuts and Jobs Act is ever perfect, the final package includes a number of provisions that can be considered victories for marine manufacturers and the recreational boating industry, Dammrich said.

“I think the reduction in the corporate tax rate and the reduction in the pass-through rate will unleash even more innovation within the boating industry,” Dammrich said. Boat builders told NMMA that the RD tax credit was extremely important to retain, as was preservation of the second home interest deduction for boats and no new luxury tax on boat sales.

Source: Boating Industry survey, December 2017

“I think in terms of the overall economy, the tax cut, at least until 2025, will put more money into consumers’ pockets. That will be good for boating,” Dammrich said. Deductibility of floorplan financing was a touch-and-go issue during Congress’ discussion of the Tax Cuts and Jobs Act, he added. 

“In the House, there was a lot of talk about limiting deductibility,” he said. “We went to Congress and said that would be devastating for our dealers. We were able to convince them collectively to allow it.”

Unlocking the potential of Discover Boating will revolve around education of manufacturers and dealers to help make them better 21st Century marketers, Dammrich added.

“I think that we are going to continue to see growth and popularity of boat clubs and boat sharing,” he said. “It’s good for the industry. This year, we are going to see positive actions out of Washington D.C. not only on the Modern Fish Act, but we may see some action on the Renewable Fuel Standard. We have an Administration that’s very open to giving recreation a much higher priority on federal lands and waters.”

In mid-December, the U.S. House of Representatives Committee on Natural Resources approved H.R. 200, a bill sponsored by Congressman Don Young (R-Alaska) that amends the 1976 Magnuson-Stevens Fishery Conservation and Management Act to provide flexibility for fishery managers and stability for fishermen. 

A coalition of organizations representing the saltwater recreational fishing and boating community, including, NMMA, endorsed H.R. 200 and highlighted the importance of incorporating saltwater recreational fishing management provisions into the nation’s primary law governing federal fisheries management.

Recreational fishing and boating industry executives also signed a letter to the U.S. House Committee on Natural Resources on Dec. 11, in support of the Modern Fish Act and its inclusion in the final reauthorization of the Magnuson-Stevens Act. 

“We expect 2018 to be a really good year for boat sales and boating,” Dammrich said. “Frankly, with the tax reform that’s been signed, I think we are feeling really good about 2019 and even 2020.”

Continuing challenges

Workforce remains the No. 1 issue for dealers and others throughout the industry. Half of those who participated in Boating Industry’s December survey responded they were “very concerned” regarding their employment needs.

“It’s a huge factor,” Kloppe said. “How do we get people out of other industries into our industry?”

An aging boating population, and the absence of younger, first-time boat buyers are associated concerns, Houseworth added. “Marketing to existing boaters is what’s driven the current recovery,” he said. “The average age of the first-time boat buyer is 45. We aren’t seeing younger boat buyers showing up. “

And, the boating industry still has to figure out how it can get younger people involved in boating as a recreational lifestyle.

“We can’t rely on the notion that at some point, millennials are go to flip over and start buying boats. The industry would be ill-advised to hang its hat on that,” Houseworth said. He added that he will continue to work with Dammrich and Grow Boating President Carl Blackwell to get younger people involved in boating.

Millennials have embraced the “sharing economy” and inspired new services that provide access to products and experiences without direct ownership. The boating industry must cater to the needs its base and help key segments and demographics remain in boating as long as possible, Houseworth said.

“We have some time, but clearly the clock is ticking,” he concluded. “We need to recognize boating may be consumed differently as a recreational product offering.”

People are not defined by age anymore. There’s huge number of female head of households who are 45 to 60 years old, and they have resources, Houseworth said. “They grew up in boating households. We need to complete their migration to boating.”   

 



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