The downward trajectory in boat registrations comes as no surprise to people such as Jack Ellis, who makes his living working with numbers and spotting trends and patterns.
Resgistrations for boats fell for the second consecutive year in 2011, to about 12.17 million boats. That represents a decrease of about 265,000 from 2010, when the numbers dropped by about 2.3 percent (282,000 boats) — the largest decline in 15 years. On the bright side, participation that year was up substantially, from about 65 million adults to 75 million.
Until that point, registrations had essentially been flat for more than a dozen years. Since the high-water mark of 12.9 million boats in 2005, we’ve seen a drop of about 700,000 registered boats, give or take. The exact numbers are a bit squishy for various reasons, Ellis says, but there is no mistaking the general downward trend. Nor should there be any real surprise.
“It’s a simple matter of mathematics here,” says Ellis, managing director of the Miami-based market research and analytics firm. Despite the large number of older boats still on registration rolls, we’re not adding new boats fast enough to offset the equally large number of old boats being sidelined, scrapped or mothballed. “We’re no longer adding to the fleet at the same rate that we’re losing them out the other end,” he says.
Ellis sent me a graph that shows the number of boats currently registered by model year, which I published on my Jan. 16 blog. “As you can see, there is still an average of almost 400,000 currently registered boats that are between model years 1995 and 2006,” Ellis explained in an email. “During this period we were adding 400,000 to 500,000 new units per year — some are now gone — and maintaining a total fleet of about 12.5 million boats.”
That was the point of stasis. “Today,” Ellis continues, “we are adding less than half this many, so the total fleet is slowly shrinking in size.”
Ellis expects the number of registered boats for 2012 to dip below the 12 million mark, taking us back to 1996 levels, according to Coast Guard figures. The direction may be clear, but the narrative of what the numbers mean and where things are going tomorrow and five to 10 years from now, of course, is more difficult to frame. And it’s subject to more variables, chief among them the speed and strength of the economic recovery and future economic growth, not to mention the shifting demographics we’ve been highlighting for some time.
Still, some 12 million registered boats, give or take, is an awful lot of boats — to service, maintain, resell, store, upgrade and so on. The new normal will see a smaller but healthier industry. Going forward, successful companies will continue to reposition and right-size themselves, as the math, the numbers and customers dictate. And there certainly will be a market for quality legacy brands produced by companies (most of them small) with little debt, running lean operations and mindful of the lessons of the past.
The aging fleet and lack of late-model used boats is helping to drive new-boat sales, which climbed to a healthy 10 percent in 2012. Projections for this year are between 5 and 10 percent. That’s good news.
Other factors also will play a significant role in our future. Our customer base is aging along with their boats. The average powerboat today is about 21 years old and the average sailboat about 28, according to Ellis. The average boat owner is in his or her early 50s.
As NMMA president Thom Dammrich is quick to point out, there are now more boaters in their 50s and 60s and fewer in their 30s. On the plus side, boating participation rose in five of the last six years (up to 82 million people), and Dammrich is hopeful that future demand will follow the increase in participation.
Given what the Great Recession (and the subsequent slow recovery) did to many baby boomers’ retirement savings, not to mention their attitude toward the financial markets, it shouldn’t come as a surprise if a fair number of boating boomers slip off into the sunset on their current boats, upgrading and maintaining them as necessary. And if they have room to move smaller without dramatically altering their lifestyle, they are doing that, as well.
The slow job growth of the last two years remains worrisome. We lost 7.479 million jobs in the recession and have gained about 3.518 million in the recovery, according to The Wall Street Journal.
And the long-term economic forecast is anything but clear. After growing at an average annual rate of 3.6 percent from 1950 through 1999, the U.S. economy has since slowed to less than 2 percent, raising questions about whether the economic salad years we saw after World War II will return, according to a recent account in the Journal.
U.S. economic growth might top out at 3 percent during the next five to 10 years, with unemployment sitting somewhere north of the 5.7 percent average recorded in the last half of the 20th century, the WSJ reports.
You play the hand you’re dealt. For the moment, the boats and the boaters aren’t getting younger, which is providing both challenges and opportunities.
The longevity, utility and value of well-built, well-maintained fiberglass boats will continue to provide competition for the new-boat market, which must continually excite its customer base with new, innovative product, including the next generation of smart entry-level boats. A number of builders certainly have done that with the product they’ve introduced in the past 12 months. There is plenty more opportunity here.
And we must do all we can to attract a new generation of boaters, one that is both younger and more diverse than in the past. More Hispanics, more African Americans, more Asians, more women and younger families. There is opportunity here, as well.
“The strong,” Ellis says, “will survive and thrive.”
Sisson, William “The adjustment to a shrinking boating universe”, WEB 01 Feb 2013