Huge demand for new and used boats, tight supply, drives boating industry to record highs
Big or small.
New or used.
Boat business is booming.
“We were up 275 percent in boat sales (last year),” said Eric Thomas, president and chief executive officer of Sailboat’s, Inc., operator of Barker’s Island Marina in Superior and Knife River Marina. “The industry is blessed with a problem, but it’s tough on clients.”
Huge demand from people looking to be outdoors and a tight inventory as a result of manufacturing slowdowns in 2020 have combined to create an unprecedented boating market.
New boats sell even before arriving at dealers. And used boats are becoming hard to find, which has increased asking prices, Thomas said.
“I was just inquiring with people who deal with larger sailboats, and there’s not that many vessels of that caliber out there,” he said. “With our used boats, we sold everything we had. And the few vessels we’ve had available are older.”
Sailboats, Inc.’s 440 slips in Superior make it the largest harbor on Lake Superior, said Thomas.
Its two marinas primarily serve customers who own large power or sailboats.
Lake Superior, combined with its many surrounding communities, is becoming a major attraction to out-of-state boaters. “This region is still being discovered. Because the weather in the south is so harsh with the hot summers and hurricanes, we’re seeing a lot of vessels being trucked in during the spring. They like the fresh water, the communities and the restaurants. They like being here because of excellent health care and not being stirred up.”
Inland boat dealers are experiencing the same demand.
“It’s been off the charts,” said Ryan Hernesman, a co-owner of RJ Sport & Cycle in Duluth and several other northern Minnesota marine stores. “Lund has been sold out of product since December. They’re building more boats than they ever have, but (sales are) something else.”
Boaters are searching across the state and beyond for certain boat models, he said. “We’re getting people calling around from a lot more areas than usual. A lot of guys are having to search a lot farther than they normally would.”
Beyond existing boaters looking for a new boat or seeking to re-power with a new motor, RJ Sport & Cycle has seen more people wanting to get into boating, said Hernesman. “We’ve had a big influx of new customers. They say 30 percent are new customers. So with that, we’ve had a lot of education to do.”
In addition to a shortage of boats and motors, boat accessories are hard for dealers to obtain, he said. “There’s even a shortage of seat foam that’s made in Texas.”
Still, he sees a strong year ahead for boat dealers.
“I think what’s going to happen is it’s going to be another boom year. I think people are going to go right down the line and buy whatever they can. It doesn’t matter what it says on the side of the boat.”
Boat builders in December stepped up wholesale shipments of new outboard boats, personal watercraft, jet boats and stern- drive boats by 17 percent compared to November, according to the National Marine Manufacturers Association (NMMA).
“Boat builders are shipping approximately 20,000 new boats monthly and operating at 13 percent above normal levels to restock anemic inventories ahead of peak selling season,” Vicky Yu, NMMA director of business intelligence, said in a news release. “Continued supply chain disruptions and workforce issues, combined with an average order backlog of up to six months, will challenge manufacturers to keep up with new orders through at least 2021.”
At the Timbuktu Marine dealership in Cook and its marina on Lake Vermilion’s Oak Narrows, the boating boom has coincided with demand for other recreational products such as all-terrain vehicles, motorcycles and golf equipment.
“The whole outdoor boom with the pandemic has created demand with all the recreational stuff,” said Matt Clines, Timbuktu Marine and Timbuktu Marina owner. “Inventory got cleaned out with the demand. We’ve got a few in-stock boats, but like everyone else, we’re struggling with inventory.”
Manufacturers working to keep up with demand are producing more high-end boats and motors than smaller boats and motors, leaving consumers with fewer choices, he said.
“It’s an industry time,” said Clines. “People don’t seem to mind, but the cost is getting real expensive. The manufacturers are building the expensive stuff and small outboards are hard to find. Anything under 150 horsepower is hard to find. It’s affecting our customers more than anything, because we’re missing out on the 25 to 40s (horsepower motors). It’s like the people who want to put a new 50 horsepower on a pontoon. Re-powering motors are hard to find.”
Boat activity on Lake Vermilion increased last summer as more people stayed close to home or came to their cabins and stayed, said Clines.
He expects more of the same this summer.
“It will be a strong year on the lake. Gas sales and sweatshirt sales will be good.”
Still, Cline has concerns about other boating needs.
As demand remains strong, there’s uncertainty whether manufacturers can catch up with consumer needs.
“We’re going to have issues getting props, trolling motors and depth finders,” he said. “We’re even hearing there could be an issue with batteries come July and August. We could be in the exact same situation next year, because there’s not a lot of inventory in the field. It’s starting out gangbusters this year, but I don’t think it’s going to end strong.”
Back at Barker’s Island, Thomas says the marina is seeing its biggest growth in dock needs and storage since 2010. Its 20 service technicians are also staying busy maintaining boats.
But the marina still has space for additional boats.
“We’re fuller than we’ve been in a long time,” said Thomas. “But we always have room. We always have a place to tie up.”