Visit any boat dealer, and you are apt to see a minimal inventory. The current scene is that demand coming out of COVID is high, and yet manufacturer and dealer inventories are low.
So what does this have to do with safety? As inventories begin to recover, we should see a lot more boats on the water, many piloted by new, neophyte skippers. Therefore, we in USPS have our work cut out for us persuading these new skippers that they need to take at least a boating safety course. Our waterways are already crowded and experiencing high traffic levels as people return to the water.
What about the recession?
You might question the above assessment given the looming recession, fueled by skyrocketing inflation, high fuel prices, plunging stock prices, and recession fears. So far, the boating industry has been immune, according to Yahoo! Finance.
“While big-ticket consumer discretionary has been left behind by investors, somebody forgot to tell the boat industry,” Citi analyst James Hardiman wrote in a new note to clients. “Our channel checks of more than 30 North American boat dealers suggest an acceleration in sales and other leading indicators as weather improved during the month of May.”
Hardiman’s dealer contacts report sales increasing by mid to high-single digit percentage rates over the past month compared to 2019 despite “significantly” low levels of inventory.
“By segment, demand remains hot for larger, higher-priced boats, particularly outboard models,” Hardiman noted. “Unfortunately, these are also the hardest to come by (notably fiberglass outboard boats) and most popular Sea Ray and Boston Whaler models are sold out well into 2023 and beyond.”
So, which segments have the largest pent-up demand, for which we will see the biggest explosion in new traffic on the water? Soundings Trade Only sheds some light on this question by tracking trends in new boat registrations:
Among the categories with more than 1,000 boats registered in March 2021, PWC products suffered the most severe decline in March 2022, at 30.1 percent. The inshore/offshore fiberglass category fell 20.3 percent. Ski/wakeboat registrations were down 14.5 percent.
Ryan Kloppe, Statistical Surveys’ sales director, says the problem is not slowing demand for boats, but instead scant inventory to satisfy the still-healthy retail appetite. Because 2020 and 2021 were the most active years for new-boat purchases since 2007, the registration declines thus far in 2022 should not be interpreted as market weakness.
The pent-up growth will be in PWCs, inshore/offshore fiberglass and ski/wakeboat boats. In the next year, every time you see a shiny new watercraft at your favorite launching ramp or marina, why not ask the skipper if he/she has taken America’s Boating Course? Ours and neighboring Squadrons’ scheduled courses are listed here. The boating public will surely be grateful for the result!
In case you missed it
South Carolina law now prohibits “wake surfing” on all state waters within 200 feet of a dock, a person in the water or an anchored watercraft. Violation of this law is a misdemeanor and generally punishable by fines of about $100-$600, depending on court fees in each county jurisdiction.
On the other hand, Georgia lawmakers did not pass HB 1460, which would have created a highly controversial definition of a “wake boat,” established a 300 foot setback for wakesurfing, and banned wake boats on four lakes in northern Georgia (Lake Burton, Seed Lake, Lake Rabun, or Tallulah Falls Lake). The controversial definition was:
“(25.1) ‘Wake boat’ means a vessel operating with one or more tanks of water or other ballast that increases wave generation or that has dull design features, modifications, or accessories specifically intended to increase wake height.”
Resources
“Somebody forgot to tell the boat industry’ about inflation, the bear market, and recession fears”; Brian Sozzi·Anchor, Editor-at-Large, Yahoo! Finance, Thu, June 16, 2022, 6:45 AM.
“Everything Is Not as It Appears: New-boat registrations are still dropping, but the culprit is inventory, not demand”; TRADE ONLY TODAY EDITORS, MAY 24, 2022.
