Ugly economy torpedoing the boating industry

[Bruce]

Ugly economy torpedoing the boating industry

Even yacht market struggling with high gas prices, worried consumers
Hunter Scott's company made boats from 1973 until last December when he laid off half his staff and switched the business to cabinetry. "I had a lot of fun in the marine industry," he said. "But the economy has taken its toll."

CHICAGO - Since 1973, Hunter Scott had made sailboats, powerboats and custom-made lobster boats.

But he decided to close his Pocasset, Mass. shop in December, lay off half his staff and switch to cabinetry work as orders for the $300,000 vessels all but dried up.

"I had a lot of fun in the marine industry," he said. "But the economy has taken its toll."

Across the country, the $40 billion boating industry is struggling to weather a season of gloomy news.

A triple threat of falling consumer confidence, rising gas prices and the nation's economic downturn has pummeled the industry, changing the boating habits of recreational skippers while forcing layoffs, plant closures and corporate reorganizations the likes of which haven't been seen in nearly two decades.

"It's a challenging time," said Bill McGill, chairman and president of Clearwater, Fla.-based MarineMax Inc. The nation's largest recreational boat and yacht retailer recently laid off 10 percent of its work force as profit fell nearly 50 percent during the last fiscal year.

Industrywide, sales of new boats have been slipping virtually every month since mid-2004, when the nation's consumer confidence began to dip. Sales closed out the year down nearly 15 percent compared to last December, according to market research data.

Even more troubling: souring sales, which began with smaller and cheaper boats and progressed to 30-foot mid-sized models, are beginning to infiltrate the yacht market, where yearslong waiting lists for the 50-foot-plus multimillion dollar vessels are evaporating, said Marisa Thompson, an analyst at Morningstar.

That's a sign that even the wealthy are beginning to watch their pennies.

"A lot of people are holding out hope that things will turn around, that in another six to eight months they'll get a glimmer of a turnaround," Thompson said. "But that's up in the air right now. I don't see the catalyst on the horizon."

Since the beginning of 2007, Lake Forest, Ill.-based Brunswick Corp. — which manufactures more than a dozen boat brands including Bayliner, Sea Ray and Hatteras — closed or announced plans to mothball seven factories and laid off more than 1,300 workers as it realigns its business and cuts boat production by more than 10 percent.

The company's boat segment lost $81.4 million in 2007, weighed down by a hefty one-time charge and anemic sales.

"We're running our company as if 2008 is going to be down and when we get to midyear, we'll begin to look at 2009 and we'll do what we have to do," said Chief Executive Dustan McCoy.

The industry's downturn became particularly pronounced more than two years ago as the nation's housing sector began to falter and grew as each month progressed.

"We thought last fall that what was being experienced by the industry was as bad as it was going to get," said MarineMax's McGill. "(It) has actually gotten worse."

Until consumer confidence returns, industry executives said they're making an effort to reach out to customers, offering classes and excursions, focusing on overseas sales buoyed by the weak dollar, and developing fancy-featured new models in an effort to win back U.S. shoppers when consumer confidence grows.

"When a recession first hits, the boating industry — like many of the other leisure industries — is the first to get hit and the last to bounce back," said Scott, 57. "Until that happens, it's going to be a little slow around the marinas."

Brian Tinkler, general manager Sunset Marina in West Ocean City, Md., is preparing for a slow summer — especially if the mid-Atlantic's fishing business is anything less than robust.

Already, Tinkler's seen customers ration boat trips and share expenses for a single boat, rather than taking trips with several boats at a time.

"If people know the fish are there, they'll pay the money for the fuel to go catch them. But they aren't going to pay the money to go on a wild goose chase for fish," he said.

Meanwhile, Tinkler's seeing his charter business ebb as fuel prices climb. Three years ago, his marina on Maryland's Eastern Shore chartered boats for between $800 and $1,500 a day. Now, a daylong rental for the same fleet costs $1,200 to $2,500.

Alex Laidlaw, a corporate vice president of Encino, Calif.-based Westrec Marinas, said he expects to see fewer smaller boats out on the water and fewer medium-sized boats, which can cost between $75,000 to several hundred thousand dollars — departing from his company's 26 marinas.

"We're clearly going to see a slower summer," he said. "They're going to the boat, but the boat is staying at the dock."

With twin 75-gallon gas tanks — and a fuel efficiency of just few miles per gallon — Hixson, Tenn. insurance agent Gary Brown has no plans to keep his 32-foot cruiser "Gentle Persuasion" in its slip.

Instead, he's making plans to economize fuel as gas prices for marine fuel soar above $4 a gallon.

"I'll throttle back, consume gas a little better, and just take a little longer to get there," he said.

Al Ehrlich, a 67-year-old boater from Chicago is already scaling back what he spends on movies and other shows so he can afford to spend as much time as possible aboard his 45-foot boat "Adrenaline" when the ice on Lake Michigan thaws.

"I'm almost thinking of putting a sail on my boat to let the wind help me along," he joked.

But like most die-harder boaters who've invested as much in their boats as some people have in their houses, Ehrlich says he no plans to be landlocked.

"I have a large investment in mine, so I'm going to use it one way or another," he said. "I'm not going to let it sit."

-------------------------------

Funny they don't really mention Florida which has been reeling since the hurricanes. Boat insurance had boaters scrambling down here way before the economy took a dump.
We've had one foot on a banana peel since 04".

More good news for fuel prices, busted Irag pipeline got crude at 108.

[Brewster Minton]

Many fishermen here are going to go under this summer. They will not be able to pay their fuel bill with what they catch.

[Carl]

With twin 75-gallon gas tanks — and a fuel efficiency of just few miles per gallon — Hixson, Tenn. insurance agent Gary Brown has no plans to keep his 32-foot cruiser "Gentle Persuasion" in its slip.

A few miles per gallon... maybe someone got their facts wrong.
I used to laugh when bringing out friends, family and the like and they would look at the flowmeter and say "Wow this only gets 11 miles per gallon, then I'd say no thats 12 gallons per hour and their face would drop. Then I'd toss in the "per engine". Then they would do some figuring and ask well how many miles per gallon is that, well about 1 mile per gallon.
I don't laugh as hard anymore...

The Recreational Marine end of my bussines took a real dump the last few years, mostly boats doing diesel conversions.

[randall]

i lost my slip at my small neighborhood marina...no room because too many people who bought houses in that neighborhood bought boats. i was a guest. no more guests, i am seriously thinking of skipping a summer and just working on the boat. i'll fish from the canoe, the kayak and the inflatable and go surfing.

caren says we can do our sunset cruises in the driveway

[Charlie J]

iam going to time the tide so i can drift out on the out going and then catch the in coming back, for montauk ill pray for a westerly wind and maybe leave 4 days in advance.

[scot]

It looks like the guy's with the single 4 stroke outboards (the ones that get 5 MPG) will have the last laugh, and have the waterways and weed lines all to themselves.

We all knew this day was coming. Europe has suffered $5-7 P/gallon prices for years. Their boats typically have a small single diesel inboard and cruise at 14-16 knots. Are we headed that way? I don't think the hull form of a Bertram is designed for a 50hp single diesel.

Being in the oil & gas busniess (as a contractor) I can tell you that the rest of the world (China, India, etc) has decided they like cars too. Cars need gas, demand raises prices. In the meantime the we still ban offshore drilling off both the East & West coast, not to mention Alaska. We can now reap the "benefits" of our legislation. We have collectively decided to buy everyone else's fuel, at "whatever" price they ask.

As we speak Hugo, Mexico, China, The Norwegians, India, Nigeria, Russia, etc are ALL drilling offshore, ALL over the world....and finding more and more juice to sell us.

So if you support a NEAR TOTAL ban on domestic production and exploration you can't bitch about the cost of gas. So how much fuel is off the East & West coast? Teddy won't even allow a windfarm to "block his view" . Break out the wallets boys!

BTW, where does everyone in Gulf go to catch fish?

[Dug]

All I can say as a manufacturer is that it is pretty staggering how quickly and significantly the raw material prices have and will rise in the near future. Steel is up very significantly. And we are not a minor customer. Prices are only good for a few days. It is interesting.

I love to take the boat out, find a spot, toss the anchor and just relax. I am not a sailor, and don't see that as an option. But I am not hot rodding any more and haven't for years now. Tough on the boat, the wallet, and the fuel bill.

But there are trends that lead us to know that it will not get less expensive.

Hunter Scott did many beautiful Bertram 31 redo's. Here is a link to one for sale in my harbor! He did a lot of work on CAPY as well.

Hunter Scott customized B31

I didn't know he was out of the marine business. Too bad, great guy! Always willing to share information and experience.

Dug

[mike ohlstein]

Many fishermen here are going to go under this summer. They will not be able to pay their fuel bill with what they catch.

I'm not crying for them. Perhaps the 60 mile desert that they created between the sand and the canyon will have a chance to recover.

Meanwhile, a B31 with Yanmar 4LP's makes a canyon trip on 105 gallons of diesel. ;-)

[Charlie J]

mike
i agree with you the 4 bangers are great on fuel, but we are probably looking at $4.75 a gal or more this season

[Brewster Minton]

Mike, Im not crying.

[Charlie]

Boating used to be the domain of the rich. I guess it is headed back that direction. I picked up a little 18' pilot harbor launch with a two cylinder yanmar diesel. It burns something like .5 gallons an hour. At least I still go boating. The cost of running the big boat at more $100 bucks per hour in a little steep.

[Carl]

I will still use mine to go someplace to do something. But the days of just going nowhere in a rush are gone for me, at least for now.

[Rumrunner]

You guys are making me cry

I have to bring that 50 home from Florida. I think I will be selling rides.

When I get it home I won't be able to move the rest of the summer.

Capt Tom

[luis]

It looks like the guy's with the single 4 stroke outboards (the ones that get 5 MPG) will have the last laugh, and have the waterways and weed lines all to themselves.

We all knew this day was coming. Europe has suffered $5-7 P/gallon prices for years. Their boats typically have a small single diesel inboard and cruise at 14-16 knots. Are we headed that way? I don't think the hull form of a Bertram is designed for a 50hp single diesel.

Being in the oil & gas busniess (as a contractor) I can tell you that the rest of the world (China, India, etc) has decided they like cars too. Cars need gas, demand raises prices. In the meantime the we still ban offshore drilling off both the East & West coast, not to mention Alaska. We can now reap the "benefits" of our legislation. We have collectively decided to buy everyone else's fuel, at "whatever" price they ask.

As we speak Hugo, Mexico, China, The Norwegians, India, Nigeria, Russia, etc are ALL drilling offshore, ALL over the world....and finding more and more juice to sell us.

So if you support a NEAR TOTAL ban on domestic production and exploration you can't bitch about the cost of gas. So how much fuel is off the East & West coast? Teddy won't even allow a windfarm to "block his view" . Break out the wallets boys!

BTW, where does everyone in Gulf go to catch fish?

I keep on with my Bertram with 2 x Cummiins V8 185 (V470M) Diesels and from 4 or 5 years ago we start doing some calculations in a way to go with the boat to a certain place and stay in hollydays near that place. Before we go to a place 1 or 2 days and then to another place. Now its more dificult. And here the taxes for boats are higher and higher (they consider that boats are for milionaire people). Looking to my Bertram from 1969 and considering that this is a sailors country I think that they should pay me for having a boat with such an age. If Vasco da Gama live on these days and have a diesel boat , I think he only gonna discover the entrance of the Lisbon river ( about 5 miles) and then go back home.
But give up is not an option and my boat like those engines and, I and my family too.

[JohnD]

You guys are making me cry

I have to bring that 50 home from Florida. I think I will be selling rides.

When I get it home I won't be able to move the rest of the summer.

Capt Tom

Congrats' on the 50 Tom!

If I have any $$$ left from my repower that I don't spend on $4/gal diesel, I'll take one of those tickets to ride.


br,
JohnD

[34Hatt]

Many fishermen here are going to go under this summer. They will not be able to pay their fuel bill with what they catch.

Yeah and the one's that hold on will charge you more for the catch which then will be passed on to the customer. You know the saying about going down hill.

[ed c.]

Bruce, forget all about boats, buy housing stocks. HOV, TOL, LEN, BZH, also you can get onto the 1st floor with VISA. Good Luck

[In Memory Walter K]

Six-Pack inshore charters out our way are up to $950.00 for a full day this Spring. That doesn't include tips, travel, food or drink. For that you are limited to 2 Striped Bass over 28", 4 Fluke over 20 1/2", and all the Bluefish you can eat. Last season when the Fluke regulation was 19 1/2" I had a group out that caught 63 Fluke and only one was a keeper. Wonder what the survival rate was on the 62 we released. Stupid rules made by stupid people. The species would be better off if the size was smaller and you limited out early rather than hurting so many fish trying to find and kill a breeder. Anyone ever hear of natural selection and what it tends to do? Walter

[Rawleigh]

I think I am becoming a "Howdy Boater" like UV now!! If he can do I don't feel so bad about it!! Cocktail cruises here i came!!

[capy]

Rawleigh,

I welcome you to the fold...the howdy boat is the future!!

I pretty much gave up fishing four years ago when I became a dad.

Timmy teases me, but howdy boating is the life.

[dougl33]

That's OK Capy.

When's the last time Timmy went fishing? (Just chumming doesn't count!)

When's the last time he went fishing on his own boat?

[JP Dalik]

Funny I have 2 kids and they've been fishing since diapers. Matter of fact since I became a dad I think I fish more....

Howdy boating- not on my watch.

Just fishing closer to home

[bob lico]

right on jp "give me fishing or give me dishtowel" not me.my grand sons are 4 years old now, just waiting till they get a littlebit older.the hell with the fuel you only come around twice better get right the first time.

[John F.]

I'm going to cut back on runs to find fish, but will still fish. I've fished w/my kids since they've been about 3--now they fish with me or on their own on the whaler. Nothing better than seeing the look in your kid's eye the first time they come back to the dock with some nice fish that they caught all on their own. Priceless.....

[Rawleigh]

"give me fishing or give me dishtowel" LOL Now that is funny, I don't care who you are!!!

[scot]

I can go either way, fish or howdy, just as long as I'm out on a boat with a thru-hull exhaust rumbling in the back ground.

[Hueso]

the big question is......"who is to blame for this debacle?".......... Oil Country Owners?..... US International relations?........ Who do we have to kill to get this back in motion?.........

[In Memory of Vicroy]

Well, my view is that fuel prices are pure supply & demand. India and China are sucking up a lot of oil. We in the USA have limited our energy supply for political reasons (no drilling off FL, the east coast, most of CA, ANWR, etc), so we are reaping what we sowed. There is a lot of oil and gas out there, but we have chosen to import it rather than produce our own because of the perceived notion (mostly false) that producing our own will result in bad enviromental results. So we are hostages to imported oil.

The solution for us boaters is to invest money in oil stocks and ride the wave......ExxonMobil was $35 a share 4 years ago, its now 88 and pays a damn good dividend.....Conoco, when DuPont spun it off about 7 years ago was 22, it split when it merged with Phillips and fully dulited is now 78. My advice to the Faithful is don't bitch about the price, get on the bandwagon. Cheerfully pay 4 bucks for diesel cause you will get it back on the stock price and dividends. Go online to any brokerage site and search out the 7 sister US oil companies and look at the return on your money over the last 5 years..it will stagger you...when you read that Exxon made X billion bucks last quarter the liberals act like its going in one pocket, nope - it goes in millions of pockets. It, like most companies, is owned by the public.

Anyway, buy oil stocks until the Grosbeak Propulsion System gets off the ground.

UV

[Tony Meola]

UV

Don't forget the oil speculators on Wall Street help drive the price of oil, plus if they would stop playing with interest rates, and strengthen the dollar the price of oil would come down. It is pegged to the value of the dollar. God too many outside influences, this will never be fixed.

[capy]

Funny I have 2 kids and they've been fishing since diapers. Matter of fact since I became a dad I think I fish more....

Howdy boating- not on my watch.

Just fishing closer to home

JP,

My boy has been on the boat since his diapers too, but spending 300 bucks for a $10 haddock, or worse non-existent tuna, doesn't make sense.......

Striper fishing doesn't count cause we don't even have to leave the dock to catch one (we do though).

He caught his first striper last year at three.

[Carl]

By me everyone is becoming "Dock Potatoes". It's kind of like rafting up dockside.
I still manage to venture out to fish, hit the beach, go out to dinner or just set the autopilot and take a slow cruise to nowhere.