Why U.S. Boat Sales Are Booming | More new boat owners during Covid

Almost half the people in the United states live in a county that touches a coastline and every year about a third of Americans spend at least some time on a boat and many of them can’t seem to get enough.

How have boat sales been in the last 10 years?

In the landscape of traditional power sports, which includes boats and some categories, like motorcycles, they have seen their fair share of struggles in recent years. Boat industry revenues have mostly been growing since the US began to lift itself out of the wreckage of the financial crisis of 2008.

How is interest in Boating among younger generations?

Boats can be used for fishing, skiing, and socializing; and their appeal is widening. Boat customers are skewing younger and more diverse. Updates that boating manufacturers made in the past few years have really changed the landscape in the demand level. Improvements in technology now allow boaters to easily navigate and dock the boat.

How did Boat sales change during Covid?

Boat sales have seen a boost during the Covid-19 pandemic, which leads some to fear that demand will crater if and when life returns to normal, but some analysts think the growth is poised to continue, in part, because of how boats are sold from one customer to another.

What are boating companies trying to do to innovate?

Companies are experimenting with membership programs. It is another way to lure customers, especially cash strapped ones, without having to convince them to pay for something that costs as much as a new car.

What are the types of Boats and what are their uses?

Typically, industry analysts breakup recreational powerboating into three categories:

  1. Saltwater fishing boats such as those sold under the Boston whaler Ann Grady white brands as the name suggests these boats are typically marketed for fishing and cruising in the ocean
  2. Then there are recreational fiberglass boats such as the sea ray brand. these are generally boats that will be used for a range of activities including water skiing fishing or cruising. Fiberglass construction generally makes a boat more stable in the water and less likely to drift. Fiberglass boats can also be formed into many different shapes to either enhance performance or looks
  3. Aluminum boats include both fishing and pontoon boats. Aluminum boats tend to be a lot cheaper than fiberglass and are also more resistant to damage. they are good for those who want to travel down rivers or through shallow waters where rocks or boulders might be a problem. Pontoon boats basically consists of two big aluminum pontoons with the deck thrown over them. these boats are intentionally simple and practical then for maximizing seating and storage space and offering a stable comfortable ride.

Polaris CEO said: “we have a boat business that basically ranks number three against all boat companies and you know specifically in the pontoon segment we are a clear number one and the pontoon segment has been growing at a very rapid pace; and we’re also number one in deck boats with our hurricane Brand.”

Who are the big boat manufacturers today?

Some of the major publicly traded companies in this area include manufacturers such as Mastercraft, Brunswick, Malibu, and Polaris. On the retail side, the biggest retailers are MarineMax and OneWater. When it comes to boat buying and selling marketplaces, Facebook, Craigslist, and BoatTrader/YachtTrader make up the majority.

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Is boating for everyone? or just the 1% top income earners?

Analysts often refer to boats as big ticket discretionary items or something similar. This means they tend to cost a pretty big chunk of money and are not necessary purchases for most of the people who buy them. boat buyers do tend to have relatively high incomes…that said, boating is not exclusively a pursuit for the rich.

In fact, about 100 million Americans, almost a third of the US population, go boating each year. A 2018 report from the US Coast Guard showed that 52.3% of people who spent time on a boat that year had a household income of $75,000 or less. About 43% of boaters in that survey spent time on a boat that was owned by someone in their household but another 41% opted for a rental. The remainder was nearly evenly split between those who either jointly owned a boat with someone else or those who chartered boats.

So how much does a boat cost, if it is so affordable?

A new aluminum boat package which includes trailer engine and other accessories costs on average about $36,000. A new personal watercraft (PWC), the types of things sold under brand names like JetSki, SeaDoo, and Waverunner, averages about $13,000. Also, 93% of the boat products that Brunswick sells are under $100,000. This is for people that love to fish for a living, anglers, or those who get out on their boats with their family.

Have boat sales been increasing lately?

The US market bottomed out right after the financial crisis in 2010. There were just shy of 178 thousand boats sold in the US that year but since 2012 the industry has been in growth mode. Total boat sales hit 286 thousand units in 2018. This was only disrupted when stay-at-home measures took effect in 2020. This later had an opposite effect where the reduced production and surge in demand for boats has causes a shortage of boats as they were all bought out from the dealers. That’s a lot of new boats but these new and inexperienced boaters caused an increase in boat accidents by 25 percent according go the BoatAlert accident database.

2020 new boat buyers who boat their first boat

Manufacturers are trying to catch up. Total retail expenditures reached a high of $49.4 billion and for the first time in more than a decade the number of first time boat buyers rose. About 100,000 people bought their first boat in 2020. This makes up about 30% of all buyers. Granted, a lot of these buyers went for smaller boats, typically less than 26 feet, that can be towed behind a vehicle and are versatile enough for very different types of activities.

What is the demographic of boat buyers in 2021?

Boat buyers have definitely evolved overtime since you’re seeing the buyer become younger they’re becoming more female; you’re seeing more minorities buy boats.

Part of what is enabled this is the changing technology. Boats are a lot more sophisticated than they were decades ago and, as a result, have become a lot easier to own. It is literally joystick controlled and has automatic docking. Everything is connected to your phone so you know the health of your boat and when to replace the battery. This has attracted younger generations into an industry that used to be thought of as being for retirees.

Related: How to find the owner of a boat by HIN?

What do most people use their boats for?

One segment has created more interest: water skiing, wake boarding, and wake surfing. Also pontoon boats are large, hardy, and relatively simple so they are especially liked by first time buyers.

Alternative ways to boat without owning a boat

The paths to boating have also smoothed because there are both subscription services such as Freedom Boat Club, the oldest and largest such service, which was acquired by manufacturer Brunswick in 2019. Customers sign up online paying initial down payment which averages about $5000 and monthly dues that average $300 to $400. This gives them access to a fleet of boats at a local club. You park your car at the local marina, the boat is waiting for you gassed, cleaned, and ready. You get on the boat, you enjoy your day, you bring the boat back, you throw the keys to the harbor to the dock assistant and you get your car and you go home! Super easy!

The company is seeing record growth adding 40 new locations in 2020 and nearly 10,000 new members. a 36% increase in memberships year over year.

There’s also a company called boat setter. It is a peer-to-peer rental and charter marketplace on track to more than double business in 2021. About 50% of the companies renters are millennials and 43% are female.

What are the risks to boating industry after covid?

even bullish investors and analysts highlight a few risks .one is the question of whether these companies can maintain or build on their success especially after the recent spike in sales from COVID. industry analysts do think that wide vaccine distribution and desire among many consumers to return to normal life and at least slightly slow sales growth. this risk is a bit greater to dealers in part because strong recent demand means manufacturers still have the task of refilling dealer inventories to keep them busy in the short term. long manufactured the OEMs go mastercraft Malibu Brunswick those companies just to get inventory channel back to where it needs to be dissatisfied normal demand they’re looking at least two to three years of manufacturing in full capacity. analysts who follow the industry say these risks are probably pretty well understood by investors and priced into shares. the wider risks analysts consider are factors such as higher interest rates or changes to tax and economic policy. this especially includes hikes in
corporate taxes and personal income and capital gains tax hikes on high earners, who make up a considerable portion of boat owners. for they highly discretionary big ticket purchase and so you know when consumer confidence takes a hit boat buying can be an easily deferable.

Brunswick has been trying to reposition its portfolio to protect against downturns models like freedom Boat Club or one example, but the company is also leaning into things like parts and service to capture customers with boats who need to maintain them year in and year out. even in a in an economic downturn we believe maintenance will function much different .supply disruptions are being dealt with. labor is tight but they are being very creative.

Will you consider boating?

About 40% of Americans live in counties on the coast, according to the National Oceanic and atmospheric administration. that includes oceanic shorelines and the Great Lakes. The trick is getting consumers to consider that a day on the water is within reach.

Additional sources to read

  • https://www.cnbc.com/2021/03/19/boat-sales-took-off-during-pandemic-dealers-cant-keep-up-with-demand.html
  • https://www.cnbc.com/2020/12/07/brunswick-expects-covid-fueled-spike-in-boat-sales-to-carry-into-2021-.html
  • https://www.usatoday.com/story/news/nation/2020/08/29/coronavirus-boat-sales-making-waves-pandemic/5639610002/

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