Although pre-owned sales still dominate the boating market, consumers are beginning to test the waters and buy new models again as the winter boat show season began on Wednesday.
The Progressive New York Boat Show, which runs until Sunday, kicks off a series of nationwide shows that will exhibit the latest that dealers have to offer and provide a gauge of how strong boat sales will be in 2012.
Historically, dealers generate between 40 percent and 60 percent of their annual sales during these shows, either from purchases at the events or through leads acquired during the shows, said Thom Dammrich, president of the National Marine Manufacturers Association, which produces the shows.
"After about five years of declining boat sales, new boat sales began to rise again in August," Dammrich said about recreational boating, a $30-billion industry in 2010.
He projected that new boat sales would rise by 5 percent in 2011 even though growth for the entire industry is forecasted to be slow through 2015.
The recent rise in new boat sales follows a shift of buyer preferences toward pre-owned boats during the recession . New boat sales fell about 55 percent during this time while pre-owned sales dropped only about 7 percent. In 2010, pre-owned boats accounted for roughly 87 percent of sales.
Phil and Pat Giles are examples of this trend. The Sparta, N.J., couple bought a 2005 Sea Ray boat in September after attending a few shows to get a better idea of what they wanted.
This year, the couple came to check out the latest boating gadgets and attend the free educational seminars.
"We're not looking at boats - we already have a boat," Phil Giles said. "We're just looking at the different things you can get to accessorize a boat."
In addition to higher sales of pre-owned models, boat size also matters to consumers. Smaller day boats have fared better than the larger, more expensive weekend boats, said Matthew Barbara, MarineMax's [HZO 6.69 0.30 (+4.69%) ] regional president for the New York City area.
"All of the prices have gone up so the day boats are just what's affordable right now," Barbara said.
Day boats are smaller and often have center consoles while weekend boats are usually equipped with sleeping cabins and kitchens. Manufacturers have been adding more amenities to boats, which has caused the prices to rise, Barbara said.
"We're still waiting for a pick-up in sales of larger boats," Dammrich said. "Those sales of large boats tend to be on the weak side. Whenever the industry comes back, what comes back first is the lower-priced, the pontoon boats."
One such visitor to the boat show, Bob Morriss, of East Meadow, N.Y., said he is in the market for a boat in the 22-foot to 25-foot range that requires less maintenance than the 28-foot Rinker boat that he sold after his children became older.
"Before, the boat we had - it was fully carpeted," he said. "It had a cabin. We want to be able to just wash it down and get out of there."
Morriss added that he was "just looking" and would probably not be among that day's buyers, who get spin a prize wheel for an item, such as a free tank of gas or a 13-foot Boston Whaler, after making a purchase.
Economy's Impact on Boating
"When there was a big economic downturn, it probably affected the casual boater the most - the person with the smaller boat," said Geoff Eisenberg, CEO of the boating retail chain West Marine [WMAR 10.90 0.20 (+1.87%) ]. "The water-ski folks, the wakeboard folks - they probably got hit the most."
Manufacturers and dealers have adapted their business models to current conditions. Manufacturers now place more emphasis on building boats only when dealers order them. Dealers are also stocking less inventory and watching their fixed costs closely, Barbara said.
West Marine has adjusted its strategy to focus on running fewer large stores with an extensive assortment of items rather than supporting more smaller stores with a more limited selection, Eisenberg said.
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