Some of the boating industry’s most innovative thinkers shared their insights on “How to Make Recreational Boating More Affordable and Attractive” during a BWI panel discussion in February 2014. Participants were Brunswick Chairman and CEO Dusty McCoy, SunTrust Bank SVP Don Parkhurst, Legendary Marine Managing Partner Fred Pace and Freedom Boat Club CEO John Giglio.
McCoy said it can and must become more affordable, and his companies are working hard to accomplish that. “We need to have every new model cost less than the model it replaces …Over five or 10 years, that will have a real impact.” He said Brunswick companies are 70 percent along the road to reaching that goal.
Making boats more affordable requires better engineering, better sourcing, better manufacturing processes and innovation. “From our perspective, this news is good,” he said, “but it’s sobering.” The good news is people like to boat and affordability is a solvable problem.
Sun Trust Bank’s Parkhurst said it does not appear that lenders can do much to make boats more affordable: 10-, 15- and 20-year lending terms can’t be extended much more than that; rates are at historic lows and are likely to rise down the road as the Federal Reserve backs off its support of artificially low interest rates; credit terms have eased and are about where they should be from the viewpoint of sound lending practices; and money is available.
A Sun Trust study suggests that as baby boomers retire, they are selling their boats and leaving boating or buying much smaller boats. “There’s a huge demographic going on here” that is shrinking the boating market, Parkhurst said.
Pace, a partner in Legendary Marine, which has won industry awards for its innovations, said it has become increasingly difficult for boating to compete for the limited time that busy families have today. He says he focuses on keeping his customers — mostly folks who are affluent and well along in their careers — by making sure they have a lot of fun when they come down to the marina, that they get out on the water and receive consistently excellent service.
“The big holdback for the millennial generation is time,” Pace said. “We’re just not seeing them come into the market.”
Are there alternatives to boat ownership? Giglio offered that his members-only club that rents boats, attracts millennials and baby boomers. “We make it extremely easy for people to get into the market,” he said. “There’s not a big capital outlay and you don’t have to get a loan.”
It is essential give new boaters hands-on skills training, Giglio added. “We want to get people on the water and have a pleasant experience. A well-trained boater is more likely to stay in boating and move up to owning a boat.”
To read the entire post, written by Soundings’ Jim Flannery, go to www.tradeonlytoday.com/2014/02/miami-2014-panel-tackles-costs-boating/.