Luxury Living Sections

Boat Dealers Navigate Challenges to Post Strong Sales

Rising Tide

Oxbow Marina in Northampton

Oxbow Marina in Northampton

A boat is, for most buyers, a true luxury item, and price tags can get high. Yet, boat sales have remained steady over the decades, and even the Great Recession posed only a blip for the industry, which has posted steady gains for the past several years. The bigger challenge, sellers say, is generational — specifically, drawing young people into the activity who will then share the passion with their own children.

Diane Bassett Zable calls it “water therapy.”

“You go away on a Friday night, spend a couple days and nights on a boat, and come back refreshed — you feel like you’ve been away even longer than that,” said Bassett Zable, co-owner of Bassett Boat, whose family business has been in Springfield for 73 years.

“You might not get your kids to sit still in your 29-foot living room, but on a 29-foot boat, away from video games or TV — unless you choose to have a TV — they’ll start playing cards again with the family,” she went on. “It’s a wonderful family activity. You’ll find a lot of families that boat also snow ski together, and vice versa; they want that family unity. Boating really does give that to you.”

Maritime enthusiasts across the U.S. echo that passion, and boat sales nationally have remained healthy over the past few years, with steady improvement each year the norm, according to Boating Industry.

In fact, following a solid 2015, this sector is expecting an even stronger year in 2016, Thom Dammrich, president of the National Marine Manufacturers Assoc., told the publication, noting that the broader economic indicators that affect sales are healthy. “The economy, while not robustly strong, is still positive. Fuel prices remain low. Interest rates remain low. There’s nothing negative happening to adversely affect boat sales in the coming year that we can see today.”

Chuck Burke, who co-owns Action Marine in Holyoke with Paul Robillard, notes that the inverse is also true. “When you get high gas prices, when interest rates go up and the economy is shaky, we see a direct drop on sales,” he said.

Not lately, however. Through mid-May, Action has seen a 16% increase in business over this time last year, but Robillard said that number may be a bit deceptive. Last year, a longer, colder winter meant a later start on sales, which was followed by a very strong June. This year’s mild winter weather got sales ramped up earlier, but a mediocre June would bring the numbers in line with 2015, so the jury is still out. But the partners are confident that brisk business will continue through the spring and into summer.

Mick Duda, owner of Oxbow Marina in Northampton, which has long sold a wide range of boats alongside its slip-rental, service, and supply business, agreed.

“Business has stayed strong,” he told BusinessWest. “The only slow year was about seven years ago, in the recession. People didn’t have the discretionary income, so they didn’t buy boats, or they were buying repossessed boats.”

In a healthy economy, it’s a different story.

“The people we primarily sell to have the capacity to buy these things. We’re not selling small sports-store-type products. Our cheapest new boat starts off around $20,000, but some go up to a half-million. That’s the niche I want to be in.”

Diane Bassett Zable

Diane Bassett Zable says a passion for boating is often passed down from parents to children, so it’s important to get young families interested in the activity.

In a recent Boating Industry reader survey — including boat dealers, manufacturers, marina owners, and others working in the industry — 77%  said they expect their revenue to increase this year. More than half expect revenue to increase by more than 10% for 2016, while only 4% expect their revenue to decrease. That would be an improvement over 2015, a year when 71% said their revenue increased, 13% reported a decline, and 16% said business was flat.

Duda said his team at Oxbow — which includes his children, Clay Duda and Shelley Anderson — has been recording strong sales at regional boating expositions. “We go in with a positive attitude, and our shows are always really strong. We have top-notch products because we’ve been in it so long, and we get clientele who can well afford to buy a boat.”

Behind the Numbers

Still, nearly half the respondents in the Boating Industry survey said they are ‘very concerned’ about the challenge affordability poses to the industry, with 96% saying they were at least ‘somewhat concerned’ about the issue.

But Bassett Zable said many are looking at raw numbers instead of the monthly cost — banks will accept 15-year terms on new boats up to $50,000 and 20 years for pricier models — while too many look to buy used, not realizing that new boats bring warranties and lower interest rates.

“A lot of people might not realize how affordable a new boat is,” she said. “When they’re new to the sport, they say, ‘oh, what do you have used?’ I chuckle at that. If you’re new to something, why do you want someone else’s headaches?”

Instead, Bassett deals almost exclusively in new craft, backed up with long warranties and a service culture — the staff answers their phones even after hours and on weekends — that have ranked the business second nationally on the industry’s Customer Satisfaction Index. After all, she said, a negative experience will chase newcomers away much more quickly than the price of a new boat.

As for a boat’s value, if it has a sleeping area, she said, that can become a second-home writeoff. “A lot of people don’t realize that. It’s direct waterfront property. You can wake up with a cup of coffee and a seagull. You can finance that for $100,000 and pay $599 a month. That’s the cost of a fancy hotel room for one night. It’s really affordable, but I don’t think that message has reached everyone.”

Mild winter weather with minimal snow, as the region enjoyed this past winter, can help raise the profile of boating come spring, Burke said. “You’re not getting bogged down in shoveling snow, and when the shows start in January, February, and March, that kind of gets the ball rolling. February is more like mid-March, business-wise, because of the lack of snow.”

In addition, he recalled, the last few years have seen rainy springs that raised water levels and kept marinas and boat owners from opening their docks early. “This year, the weather was more consistent, which was conducive to early boating.”

Duda doesn’t have an issue at Oxbow, whose slips are protected from swells and heavy flooding. “On the river proper, you never know what’s going to happen, but here, there’s no current whatsoever,” he said, adding that the slips are secured by a network of underwater cables, keeping everything in place.

He said the marina benefits greatly from its visibility from Interstate 91, but he doesn’t wait for business to come to him, taking part in shows throughout the Northeast and delivering product from New Jersey up to Canada. But plenty of customers visit the spacious showroom, lined with Crownline fiberglass vessels, Bennington pontoons, and other models.

“You can’t beat the exposure from the interstate. This is the crossroads of the Northeast, the junction of 90 and 91,” he said. “And people with this kind of money want to see what they’re buying; they don’t want to look at a catalog. They want to come inside a nice showroom and look at the boats displayed.”

The property, celebrating its 50th anniversary with a series of events this year, has come a long way from its humble beginnings. Duda was a dairy farmer in Easthampton when he came across some property for sale along the Connecticut River. He bought it with the intention of farming, but started to consider boating as a potential business opportunity. So he bought more land neighboring the first parcel — where hundreds of boats are now moored — and launched a marina. Today, he owns more than 200 acres, which is home to not only the marina, but two soccer fields and the headquarters of a waterski team.

“When I met with the neighbors, they were happy because it was a mess over here,” he said, recalling that the property was a popular site for nighttime parties before he began buying up the land — a good investment, it turned out, considering that waterfront property has become so expensive that many dealers can afford only small parcels with smaller showrooms. “But Oxbow has grown so much. We’re busy.”

Living Large

Sellers of large boats are experiencing a resurgence in business. Specifically, boats over 40 feet, hit hard during the recession, posted some of their strongest numbers, Dammrich noted, especially in the offshore fishing market.

Buyers who can work a larger boat into their monthly budget have more than one reason to do so, Bassett Zable said, including ease of operation. Twin-engine boats above 30 feet long can be fitted with a joystick and steered like a video game — in other words, much easier than a smaller boat.

However, many factors go into choosing the right vessel, Duda said. “A boat has to meet the needs of the family and what its desire is. If it’s just fishing, they want an offshore fishing-type boat. If they’re interested in cruising, overnights, that’s something different. If you can fit the family to the right model boat and price, then they’ll be happy. If not, they won’t be happy.”

Paul Robillard, left, and Chuck Burke

Paul Robillard, left, and Chuck Burke say a robust service business buoys the bottom line at Action Marine no matter what kind of sales year it’s been.

Still, despite the positive signs, Boating Industry reported that a decline in entry-level boaters remains an issue for the industry in 2016, which is reflected in the continuing decline in sales in the ‘runabout,’ or small motorboat, market.

“Back in the ’80s, young people were getting into boating, but fewer are now,” said Burke, a 50-year industry veteran who opened Action with Robillard 26 years ago. That’s why attending boat shows is important. “It gets the boating season going and allows people to see what’s out there, what’s new.”

Action specializes in fishing boats — alumimum vessels between $10,000 and $20,000, and some offshore fiberglass fishing boats in the $20,000 to $40,000 range. “Our strong suit is fishing. What we’ve got, our niche, we’re sticking with that.”

But fishing is just one way to enjoy the water, Duda said. “Boating is certainly very popular, and it’s a true family form of recreation, which everyone in a family can enjoy at the same time.”

Bassett Zable understands the family appeal, but knows it’s a constant challenge to attract families who have never experienced boat ownership.

“Boating is here to stay, and once people understand how great it is, they love it. It’s such a fabulous family memory. And if their children grow up with it, they’ll want to stay part of it, so we have to make sure it stays affordable.”

To that end, her goal is to make boat shopping a pleasurable experience, and stress service after the sale. “Dealers look like equals, but we’re not,” she said. “Not all manufacturers are equal, and neither are dealers. What’s their reputation? If they say they’re going to do something, do they do it? If you buy a boat from Bassett, you’re joining my Bassett Boat family — and I take that seriously.”

She recalled someone who called, panicked, on a Sunday evening. He needed to clean up a spill in the cabin of his 34-foot boat before his wife saw it, but couldn’t find the central vacuum. “He was so happy that I answered the phone and helped him. I was in a supermarket in Florida, but I took the call.”

Bassett Boat, which overlooks Lake Massasoit in Springfield and boasts a second location in Old Saybrook, Conn., also offers learn-to-boat programs to turn novices into capable captains.

“I want to deal only with quality products that bring quality customers, and then turn around and give them quality service,” Bassett Zable said. “When you can stick with that strategy, that’s a winning combination.”

Continued Growth

Speaking of service, Burke said that side of the business is what insulates Action from recessions like the one that struck eight years ago. “If the economy goes down, people tend to put their money into repairs to keep what they have going. Either way, it kind of balances out for us because we have a strong service background, and people bring their boats to us for service. In fact, that’s what keeps the door open. Sales are nice, but secondary.”

Duda also stressed the value of taking care of customers, and said many employees have stayed with Oxbow for decades and know the business well.

“Work is what I live for, and I’m still working at my age,” he said. “I still wake up at 3:30 to plan the day.”

With his children doing most of the selling these days, Duda can devote part of his time to growing vegetables on some of Oxbow’s acreage. Last year saw squash, and this year he’ll be growing sweet corn.

“After all,” he said, “I’m still a farmer” — one who, 50 years ago, saw a future in the boat business and took the plunge.

Joseph Bednar can be reached at [email protected]