Back in spring 2020, local boat dealers weren’t feeling too optimistic about how the year would turn out. Things had been going well in January and February, but then the COVID-19 pandemic hit in full force, and everything just seemed to stop. No one was shopping for a boat.
“In March, we all thought the world was ending,” says Jim Connor, general manager of MarineMax Naples, which sells new and pre-owned boats and yachts.
But to everyone’s surprise, the exact opposite happened. By May, customers had started to come back. They wanted to find ways to get out of the house and had extra discretionary income from canceled family vacations and more meals being eaten at home. And they were ready to take the helm of a new boat.
“It became apparent that COVID-19 wasn’t going away quickly, and people only had so many things they could do,” says David Hirshberg, sales manager at Galati Yacht Sales in Naples, which sells new yachts from brands such as Viking and Princess, as well as previously owned yachts. “Boating happened to be one of the things you could still do. We picked up steam through May, June, July and August, and we have not slowed down since then. We had the strongest August and September that we’ve ever had, with sales levels approaching where they were in 2006, which was a high year for the marine industry.”
Nationally, August 2020 data from the National Marine Manufacturers Association showed that sales were up year to date for essentially all categories of boats, from powerboats (up 8% year to date) and freshwater fishing boats (up 10%) to saltwater fishing boats, cruisers and yachts (each with growth ranging from 11% to 15%).
When Connor finished his fiscal year at MarineMax Naples on Sept. 30, sales were up 40% for the year across all boat sizes. October 2020 was up about 55% over the same month in 2019.
“We were completely selling out of things,” says Connor. “Everyone flocked to the sea for some solitude and distance.”
Instead of a complete bust, 2020 wound up being a strong year for local boat dealers, with most expecting to surpass or meet 2019 sales levels, despite two months of virtually nonexistent sales in 2020. They expect the good times to continue into 2021, but elevated sales bring some new challenges. The biggest one right now: inventory levels.
Lots of Buyers, Not Enough Boats
As sales levels have remained strong, both new and used boats have become increasingly difficult to find. Yacht builder Hinckley Yachts, which has a sales center in Naples, first experienced tightening inventory on its brokerage (or pre-owned) side of the business in May.
“Most of our brokerage inventory was cleared out within six weeks,” says Scott Bryant, vice president of sales and marketing for Hinckley Yachts. “Come June 1 or so, the new boat market just lit up, and we basically are selling out into a year from now. We sold almost a year’s worth of inventory in a short amount of time.” That means customers who ordered a new boat from Hinckley won’t get it until well into 2021.
Some boat manufacturers had to close their factories during the spring pandemic shutdowns and are still working to catch up. That would cause problems in a normal sales environment, but it makes it even more challenging when there’s such strong customer demand. Dealers have had to get creative to find inventory for buyers.
“The whole world is experiencing inventory issues, and that ripple effect goes through our industry, as well,” says Philip E. Osborne, vice president of operations for Naples Boat Mart, which sells boats from brands including Yamaha and Grady-White. “All of these manufacturers are tied to global supply chains and normally keep as little inventory as they can. So manufacturers are having to work through capacity issues both from staffing and parts availability. We worked with dealers in other parts of the country that didn’t see the same increase in demand, or have seasonality that affects their demand differently. Everyone is kind of playing the shell game to allocate capacity as best they can to satisfy the market.”
Hirshberg at Galati Yacht Sales in Naples deals primarily in yachts from the mid-30-foot range up to more than 100 feet. Yachts in the $100,000 to $500,000 price range have been the strongest segment in 2020, and for those kinds of customers, a lack of inventory can be especially difficult.
“Those type of buyers really need to be able to look at and touch things to buy it,” he says. “They don’t do well buying from catalogs. So that presents a bit of a problem when we’re low on types of inventory, because it’s harder to give people a sense of what they’re buying unless they can actually see it in front of them.”
Connor expects to see stressed inventory levels into the first quarter of 2021. And that could have an impact on sales volume: “If you don’t have product, it’s tough to sell it.” He’s finding ways to get around that, though. As MarineMax saw more customers spend time shopping online, it’s beefed up its online presence to showcase inventory virtually and provide customers with information vital for purchasing decisions. “And there’s always a past client’s boat we can borrow if a customer needs to go for a sea trial or just touch and feel the boat,” says Connor.
An Influx of New Boaters
A large number of first-time boaters entered the market in 2020. That presents both opportunities and challenges.
“It’s been a really adaptive year for us,” says Osborne. “We typically would refer to Naples as a fairly mature boating market, because there are probably more barriers to entry to boating in this market than other markets. It can be daunting to get into boating here from a dollars and cents standpoint.”
But as more people turned to boating as a pandemic-friendly activity, it brought new buyers into Naples Boat Mart. “All of a sudden we were visited by a segment of customer we hadn’t seen as many of before—the average person seeking to understand how much boat they could afford based on the monthly payment that they would put on a trailer and keep in their garage or side yard,” says Osborne.
In past years, only about 10% of sales at Galati Yacht Sales in Naples were financed. But now 30% to 40% of buyers are taking out loans to purchase boats. “Many more people are getting financed than were before,” says Hirshberg. “The finance companies have been extremely busy, and it’s taking longer to get financing now.”
Naples Boat Mart has increased the amount of training it offers during new boat deliveries because there are so many first-time boaters making purchases. “If you go out and buy something new and the dealer says, ‘Here’s the keys and have a good day,’ and then you get it stuck on a sandbar your first time out, those are the people who get into boating and get turned off quickly,” says Osborne. “But if you do business with a reputable dealer where someone shows you the ropes the right way, the industry data tell us you’re here to stay.”
But doing that takes time and effort. Naples Boat Mart is investing in both its team of employees and the trailers, racks and other equipment needed to support robust sales.
“This is a very capital-intensive business to be in,” says Osborne. “So just because we may be up in volume, with the additional training time we have to do and all the other stuff that has to come with it, the profitability side of the picture doesn’t get significantly rosier. We’re working harder for the same amount of money.”
But the hope is all these brand-new boaters turn into lifetime customers. “Once a client has a good experience and they receive good service, they will stay part of the brand and be very loyal to it,” says Connor. “And they’ll grow within that brand to their next boat.”
TO THE RESCUE
For Capt. Dan Mercier Sr., 2020 wasn’t just his 10th year as owner of Sea Tow Naples. It was also one of his busiest years on record.
The COVID-19 pandemic brought a lot of people out on the water, and there were a lot of new boaters navigating things for the first time. Sea Tow provides on-water maintenance (think of it like AAA for boats) and might get the call when a novice— or any kind of boater— runs into trouble.
“I’m going to ballpark it here, but I think our service calls increased at least 10% to 15%,” says Mercier. “And my membership base has been growing, which is a pretty good indicator for me also. I’d say we had a good 5% increase in memberships.”
That boost in business made it hard at times to keep up on the maintenance on their own equipment. “Boy, we had to stay up on that quite a bit,” says Mercier. “There were a lot of long hours, late nights and early mornings.”
Things calmed down into the fall, giving Mercier time to prepare for whatever 2021 brings his way. In the meantime, he offers some advice to all the new boaters out there.
“Take a boating class,” he says. “If you’re a brand-new boater, safety is such a huge factor. Anything can happen out there. If you know the ‘rules of the road,’ it’s a huge factor in making everyone safe out there.”
RVS REV UP
Boating’s not the only way to travel in socially distant style. RV sales have also seen an uptick during the COVID-19 pandemic.
“People still want to travel and have vacations,” says Timothy Lowry, marketing director for North Trail RV Center in Fort Myers. “RVing presents the best way to do that safely.”
Lowry says 2020 sales at North Trail RV Center and its Fort Myers Airstream dealer, Airstream of South Florida, are “definitely up” from 2019. (He declined to provide any specific numbers.) Both locations have been selling through inventory and have hundreds of units on order.
That same kind of thing has been going on all over the country. According to recent data from the RV Industry Association and ITR Economics, 2020 RV shipments are expected to end up at about 424,400 wholesale units, which would be a 4.5% increase over 2019 and the fourth-best annual total on record. Forecasts for 2021 call for RV shipments of some 507,200 units, which would be a 19.5% increase over 2020 and the best annual total on measurable record for the industry.
Lowry said a lot of first-timers entered the market, but existing RV owners also chose to upgrade their vehicles. And he considers the outlook for 2021 to be “fantastic.”
“A lot of people have gotten into the lifestyle who weren’t into it before,” he says. “Whenever you have that additional amount of people who become customers, it’s going to increase everything. RVing gives you that safety and ability to go anywhere you want and experience things in a unique way. I think this could be a real boon for our industry for quite a number of years.”
FERRARI PLANTS ITS FLAG
In 2020, Ferrari didn’t match its record-breaking 2019 sales figures of more than 10,000 vehicles, but the luxury car company still remains red hot. The new Ferrari of Naples offers the luxury automotive experience local fans of the Italian sports car have long been dreaming about.
The 58,000-square- foot, state-of-the-art dealership includes a second-floor indoor showroom offering a “museum-like experience.” Customers can visit the on-site atelier to customize their Ferrari, from the steering wheel to the leather fabric used in the car’s interior. “It provides the client with their own personalized Ferrari and makes the experience for customers unique,” says Helder Rosa, general manager of Ferrari of Naples.
The eye-catching structure on U.S. 41 near Immokalee Road is the first Southwest Florida location for New Country Motor Car Group, which also has a Ferrari dealership in West Palm Beach. Rosa says factors such as Naples’s wealth and the number of Ferrari owners already in the area made the city an obvious choice for a new dealership. And those owners now have an authorized Ferrari dealer to turn to for service from a factory-trained technician—or a new Ferrari when they’re ready to upgrade.
That urge for a new car has been a bit stronger lately due to the COVID-19 pandemic, says Rosa. “People want to get out; they want that freedom to get out,” he says. “And whether it’s a Ferrari or I don’t care what kind of car, they want the ability to have their own car so they can go explore and get out on the road and drive.”
But you don’t have to be in the market for a new ride to check out the new Ferrari of Naples. “We know that the Ferrari brand will bring people into the dealership who may not be considering buying a Ferrari but just want to be part of the experience,” says Rosa. “And we want to deliver a message that says, ‘Come visit Ferrari of Naples to really experience that excitement.’”