Boating Industry Mostly Resilient as Coronavirus Crisis Continues

Dear IYBA Members: We wanted to share an excerpt from an article that includes some positive industry news amid the coronavirus crisis. The full story will appear in the April/May issue of Compass magazine, which should arrive in your mail in early April.

Boating Industry Mostly Resilient as Coronavirus Crisis Continues

By Kim Kavin

The news about the novel coronavirus was growing increasingly grim as Compass went to press.

On March 19, the Dow Jones Industrial Average (DJIA) had just inched itself back up over 20,000 following a torrent of sweeping losses and erratic trading. That equaled a loss of more than 30 percent since the DJIA set a record high of 29,398 on February 14.

Military hospital ships were preparing for action on both U.S. coasts as the number of confirmed cases skyrocketed.

But many Americans still wanted to go boating.

“Fuel sales at our marinas in Florida doubled last weekend. One of our stores said it felt like the Fourth of July because so many people were out on their boats,” said Chuck Cashman, chief revenue officer at MarineMax, which has 60 locations selling everything from Azimut and Benetti motoryachts to smaller boats from Grady-White, Boston Whaler and Scout.

Cashman and other industry leaders were maintaining an optimistic attitude even as the world’s economy ground to a halt.

“If you think about it, what else are you going to do right now?” Cashman said. “There’s no kids’ sports, there’s no kids’ camps, there’s no theme parks, there’s no sporting events. If you’re a boater, you can be out on your boat right now. We’re seeing it at all of our stores that have marinas.”

At MarineMax, the number of qualified leads coming in through the internet took a slight dip, but not much, Cashman said.

There was also an atmosphere of adjustment and optimism at Fraser, whose global operations in the large-yacht segment include new builds and brokerage sales, crewed charter, yacht management and crew placement.

“Our yacht-management department, that’s still going strong. There are some challenges due to travel restrictions, but that’s pretty much business as usual,” said Mike Busacca, Fraser’s chief operating officer, adding that Fraser had closed a brokerage deal on a yacht larger than 100 feet that very day.

The one segment posing larger challenges is crewed charter, Busacca said. The problem isn’t a lack of inquiries ‒ people still want to book vacations for the summer ‒ but instead trying to figure out how to complete the bookings.

Even despite those challenges in the charter segment, Cashman and Busacca remain bullish about where brokerage and new-boat sales will be when the crisis wanes. Cashman said he looks at the stock market, consumer confidence and interest rates as leading indicators; when all three are favorable, the boat business does great. It’s not until all three areas falter that the market goes totally haywire.

As of this writing, the stock market was a problem, but interest rates were near all-time lows. The big question is whether consumer confidence will hold, given dramatically rising unemployment claims.

Roger Sowerbutts, head of Horizon Yachts USA, said his Fort Lauderdale office was still doing boat showings by appointment ‒ and customers were still calling. It was almost as if, demand-wise, nothing had changed.

“If I had blindfolds on and wasn’t watching the news, it would be very difficult to tell,” Sowerbutts said. “We have one client looking at a boat whose money isn’t in the stock market. He’s looking at beneficial interest rates for loans.”

Cashman said that MarineMax, too, is already planning for a promotional push when the news headlines settle down.

That type of planning is exactly what Andrew Golden, co-founder of the marketing communications firm Rushton Gregory, is urging clients to do in their marketing plans, as well.

“What better time to reach people than when they’re a captive audience?” Golden said. “It’s an age-old marketing principle that in times of pullback and confusion, it’s the clients who invest in marketing at that time who come out on top.”

Article Author: Kim Kavin