Marine industry officials say Katrina, high fuel costs won't dowse boat sales
2/6/2005 6:28:48 PM by MIKE PETROVSKY
It was difficult for anyone to be optimistic about anything at the end of last summer given the news of the shock and horror those in the Gulf Coast region experienced after Hurricane Katrina.
When Wave magazine interviewed Thom Dammrich, president of the Chicago-based National Marine Manufacturers Association, last September, the devastation of the late August Category 3 hurricane weighed heavy on his mind as it did many of us who watched the video reports, particularly from New Orleans.
"I heard on the news them talking about tearing it down," he said of the Louisiana Superdome, the storm shelter that proved to be anything but.
Before Katrina, Dammrich planned to host the New Orleans Boat Show which was to be held in the Superdome from Feb. 8-12.
Asked if the show would go on despite the tragedy and probable loss of venue, Dammrich, trying to maintain a note of optimism, said: "Who knows? If the vendors in Southern Louisiana still want to have a show someplace, we'll provide it.
"And, there was a show scheduled for Biloxi, (Miss.)," said Dammrich as his voice trailed off. Biloxi was also devastated by Katrina.
Earlier this year, just before the NMMAunveiled its Grow Boating Initiative at the Miami Boat Show, Dammrich and others in his organization had said the tragic events of Sept. 11, 2001, had resulted in a nationwide surge in recreational boating because families had realized that their all-work, no-play lifestyles needed to be adjusted.
"If (the Hurricane Katrina tragedy) causes people to focus on family relationships and friends, it would be good for boating," Dammrich says.
As for the state of the recreational boating industry during the first half of 2005, the NMMA president said, "It's been good, but not great." So far this year Dammrich says unit sales have been flat. The number of new boats sold has maintained the 7- to 8-percent increase the industry experienced in recent years. It should be noted, however, that NMMA reports on its website that unit sales dropped 1.7 percent. Jim Petru, NMMAs director of Industry Statistics & Research, says the wholesale unit sales figures are not indicative of the boating market in the first half of 2005.
"We don't know what dealer inventory was coming into 2005, so the numbers could merely reflect that dealers had high inventories in January and limited their new boat orders. We will have a better grasp on the state of the industry when second quarter retail numbers are released at the end of September. Early indications from Info Links bellwether report; however, are that sales are up at the retail level." The end-of-September figures were not available before Wave's press time.
A bright spot is NMMA reports the wholesale dollar sales for the first half of 2005 - the amount people are spending on recreational boats - increased 7.2 percent compared to the same period in 2004.
Dammrich says the wholesale dollar sales figure shows that current boat owners seem to be trading up - a good sign, but he admits his organization has its work cut out in attracting first-time boaters.
Although it seems people in the areas affected by Katrina won't be thinking about recreational boating for some time, Dammrich says television commercials touting how boating brings together family and friends might turn things around for the rest of the nation. He says the NMMA plans to run the spots in the second quarter of next year.
"Boating connects people like nothing else," Dammrich says and he adds that the TV ads will carry some form of that message.
The TV ads, he says, will direct viewers to the Grow Boating website now under construction. He says by the time the national television spots air the website likely will have links to local dealers nationwide.
As for the aftermath of Katrina, within the same week the hurricane hit the Gulf, gas prices shot up to more than $3 a gallon in some parts of the country.
In mid September, Dammrich was asked if he thought high fuel prices would effect recreational boating.
"Gasoline prices are already receding," he said, remembering gas prices in the Chicago area reaching $3.60 a gallon just after Katrina struck. "Gas prices won't be in the headlines for long."
Frank Herhold, director of the Marine Industries Association of South Florida had this to say in mid-September:
"Just as automobile drivers adjusted to the high cost of fuel, boaters are making similar adjustments. Current prices are not going to stay. I pay more attention to weather conditions. Were now in the rainy season and that has more effect on boat sales than gas prices. My only worry is if we couldn't gas."
Phil Hawkins, vice president of Sterling Associates in Fort Lauderdale, echoes Herhold's remarks, saying fuel prices, which he thinks will eventually stabilize at $2.50 a gallon, tend to have little effect on boats sales. Hawkins brokerages loans for recreational boats and said he noticed less business in mid September but knew it was only the seasonal slump of hurricane season.
Of course, gas prices where climbing steadily before Katrina. Concerned, the NMMA asked Harris Interactive, a survey company, to ask boat owners how fuel costs will effect their boating activities.
"Eighty percent of boaters said (gas prices) would have no impact on the use of their boats," Dammrich said of the Harris poll taken last summer when prices at the pump just began to rise. Just as great a threat to boat sales as the high cost of fuel and hurricanes in Florida is boaters' access to waterways.
The NMMA website reports 28 industry leaders recently met in Chicago to address water access.
"This is one of the most important issues facing our industry today," said Tom Errath, chairman of the Grow Boating Water Access committee and general manager of Water Access at Brunswick. "In order to make a difference, it was imperative that the industry back the committees efforts and, judging by the number of members we have, it is clear we have the industrys support."
The group will focus on four areas that have the greatest impact on water access: permitting, policy reform, land-use issues (mixing access and development), and compiling data and outreach efforts to change access issues.
With these focus areas in mind, the committee is researching and identifying specific tactics and strategies until it reconvenes Oct. 25- 26 at the Diplomat Hotel in Hollywood, just prior to the Fort Lauderdale International Boat Show.
"The committee is working to narrow its focus, to make the industry's efforts to grow boating as effective as possible. The meeting was an excellent first step, and the committee we have assembled is ready to take on these critical issues," said Jim Frye, president of the Association of Marina Industries and NMMA director of Marinas and Boating Access.
The Water Access Committee is one of five committees developed for the Grow Boating Initiative to ensure that the industry meets the goals established for the campaign. The others are: Dealer Standards & Quality, Product Standards & Quality, Timely & Accurate Sales Statistics, Marketing/Communications and Funding committees.
"In order for the Grow Boating Initiative to work, every strategic area must be successful. We must find ways to protect water access to recreational boating in order for the pastime to grow and for our industry to prosper," says Dammrich.