Norwalk Boat Show eyed as market barometer
For a read on how the 2010 recreational boating market is faring, one need only show up at next month”™s Norwalk Boat Show ”“ which will feature an “affordability pavilion” for boats that can be owned for less than $250 a month.
If more than 25,000 people join you there, sellers are onto something.
That was the number of people who attended the 2008 boat show in Norwalk, before the economy and rain clouds dampened attendance at last year”™s show by 17 percent. Scheduled this year for Sept. 23-26 and coming off the previous week”™s Newport International Boat Show, the Norwalk Boat Show will provide perhaps the best local barometer on the recreational boating market as the off-season sales cycle kicks off, heading into the U.S. Sailboat Show October 7-11 in Annapolis, Md.; and the New York Boat Show scheduled for Jan. 19-23, 2011, at the Jacob Javits Convention Center in New York City.
Through the first three days of last year”™s Norwalk Boat Show, attendance was up 27 percent compared with the year before, but heavy rains on the final day wiped out many plans for visitors. Attendance at last January”™s New York Boat Show was up by more than half from the year before, when the extent of the economic collapse was still unknown.
The recession and tandem credit crisis had a major impact on boat sales, which were off 19 percent last year to fewer than 573,000 total, generating $8.5 billion in revenue according to the National Marine Manufacturers Association. The overall market for boating products and services was down 9 percent to under $31 billion.
David Pugsley, owner of Brewer Yacht Sales in Westbrook and president of the Annapolis, Md.-based Yacht Brokers Association of America, termed it a “brutal” year for his business, but anticipated slow and steady progress heading into the winter selling season.
If a smaller number of people are considering buying boats in the recession, that is not stopping serious shoppers from signing the paperwork, according to Michael Frank, a broker with Prestige Yacht Sales, whose owner Tom Pilkington also sits on the board of the Yacht Brokers Association of America.
Prestige opened a third office this year in Mystic, in addition to its Stamford and Essex locations; and last week was awarded a coveted dealer relationship with Beneteau USA, a major yacht manufacturer. Still, Frank said the account materialized after another brokerage company went out of business. Clearly, challenges remain.
The Cleveland-based market research firm Freedonia Group Inc. does not expect the market for new boats to not fully float to its 2008 levels until 2014, with strongest demographic demand expected among people approaching retirement age, and powerboats expected to be the fastest growing boat-sales segment.
In an attempt to push sales against the riptide of the recession, the U.S. Small Business Administration debuted the SBA 7a Dealer Floor Plan program last summer to provide access to financing for small marine dealers by guaranteeing the loans issued by banks, with some 1,300 lenders participating at least nominally in the program.
Earlier this year, the National Marine Bankers Association reported it did not expect the program to have a dramatic impact on the industry, with Chicago-based NMBA saying that banks approach for SBA floor-plan financing are still being very cautious and performing significant due diligence on the potential borrower before even taking an application.
Still, the CEO of boat maker Brunswick Corp. told investment analysts last month that the retail boat finance market continues to improve amid declining interest rates on boat loans, particularly for “high quality customers” in his words. Still, he added, the market has picked up faster for smaller boats than the bigger ones that bring better margins for manufacturers and brokers alike.
“Until the economy settles out, the larger (boat) buyers will continue to be an issue for us,” said Dusty McCoy, CEO of Brunswick. “We”™ll be happy when (the recession) ends because we”™ll do very well, but there is not a lot we can do about it right now.”