Economic recovery fueling boom
by Dave Gallagher
Curt Bagley has been in the boat-selling business for 26 years, and he is amazed at how well boat sales have been in the first three months of 2005.
“This is the best start I have ever seen in this business,” said Bagley, the owner of Bellharbor Yacht Sales in Bellingham. “In the first part of 2005 our sales are up 50 percent compared to the same period last year, and 2004 was a good year.”
Last year was a record-breaker for Olympic Boat Center in Bellingham. One salesperson had an especially good year for the store: Rod Nau topped $4 million in boat sales for the year, smashing the previous record of $3.3 million that he set in 2001.
“What is especially encouraging is that sales are strong in a wide range of boats, from small ones used for lake fishing to large yachts,” said B.J. Mattaini, store manager at the Bellingham Olympic Boat Center. “So far, the 2005 sales numbers are keeping pace with 2004. It’s been an incredible run for most dealers in the boating industry.”
Boondocks Boats and Motors has been preparing for the 2005 season by completing a nearby warehouse expansion. The company added 5,400 square feet of storage space in a nearby warehouse to free up space in its showroom on Roeder Avenue.
“Business has been going well and we just started running out of space,” said Jake Lindhout, vice president of Boondocks. Boondocks owner John Lindhout added that the company was already sold out of current deliveries on its Sea Sport boat line all the way through September, and are in the early stages of expansion plans for increasing production at their Sea Sport facility north of Bellingham.
Local boat dealers say the reason sales have been so strong for the past 15 months is a combination of factors that have meshed to create a perfect climate for selling. A stable economy combined with low interest rates have made boating a more popular recreational option.
“I consistently hear from people who are buying boats that they want to spend more time with families in a recreational setting by getting away from work, and getting out on the water is an attractive option,” Nau said. “Spending time with family is becoming a high priority these days.”
Even rising fuel prices haven’t been able to put a damper on sales.
“When someone is thinking about purchasing a boat, fuel prices are a small part of the costs compared to the entire cost of a boat,” Bagley said. “A boat is a major investment, and fuel prices would have to get really high before it would change someone’s mind when they’ve decided they want a boat.”
The activity in boat sales appears to have spilled over into other marine-related businesses. Gordon Lavigueure, owner of Bellingham Marine Repair, said it’s been one of the busiest first quarters ever for his company, and he’s been in business for more than 25 years. He recently hired five more employees to help keep up with the activity.
“I think the weather and the economy have played big roles in the busy first few months of the year,” Lavigueure said “We had that mini-summer in February and March, so everyone is thinking about getting on their boats. The economy is going well, so people are feeling positive about things and are willing to fix up their boats.”
Brian Rasmussen of Rasmussen Marine said he thinks boat service and repair businesses are busier in the winter because boaters have come to realize how difficult it is to get work done in the spring and summer months.
“Summer isn’t the time to try and get your boat upgraded or repaired, because most everyone is booked,” Rasmussen said. “Also, recreational boating is becoming more of a year-round operation because today’s boats are better equipped to handle cold weather.”
Rob Knode of Barkley Associates said business has been brisk when it comes to boat insurance, but he said he’s hasn’t been seeing as much in new boats yet.
“With new rules about liability insurance when it comes to boats, we’re seeing more people revising or getting new coverage,” Knode said.
In marine equipment sales, business has been good but not overly busy, said Zach Miller, store manager at LFS Marine.
“What we’re seeing is people gearing up for the sport fishing season,” Miller said. “Our season kicks off around mid-April, so business is just now starting to pick up.”
Movin’ on up
A popular trend in the boating industry is trading up and purchasing a larger boat. Many times someone will start with a small boat for their first purchase to see whether they really enjoy boating, Mattaini said.
“People just getting into boating are also usually interested in used boats, because there is a smaller initial investment to be made in comparison to a new boat,” Mattaini said. “However, as they get hooked on boating, they tend to come back and trade up.”
In recent years, boat dealers are seeing more people who have very little experience in boating become interested in owning a boat. Bagley said the reason that’s happening is the technological advances made in both the safety and handling of boats.
“The improvements that have been made in the safety and handling equipment have made a big difference in attracting people who haven’t been involved in boating, because it has become so easy to operate a boat,” Bagley said. “These advances have taken the intimidation factor out of the equation. It’s great being able to show people that they can do it.”
The best place to show people is the boat shows. One of the biggest in the area is the Seattle Boat Show, held every January, and local dealers say they usually see a bump in sales in the weeks following the event.
“The Seattle Boat Show really gets people’s juices flowing, whether it is to buy their first boat or to trade up,” Mattaini said. “When you combine that with the fact we’ve had a warm, dry winter and low interest rates, it made for a busy three months for boat dealers.”
Bagley, who focuses solely on the used-boat market, said his most popular boats have been between 30 feet and 60 feet long, ranging in price from $80,000 to $450,000.
“Most often, we are seeing boaters who are interested in something a little bigger. We’ve also been benefiting from the Canadian dollar. Canadians now account for 25 percent of our sales. It used to be much lower,” Bagley said.
Adapting to change
As boating gains in popularity locally, one of the challenges will be to make sure there are enough boat slips available. Local boat dealers say at this point it’s not a huge problem.
“Finding slips for yachts can be difficult, but somehow it always works out,” Mattaini said.
Bagley said the port’s work in expanding the Blaine Harbor and the potential new marina in the former Georgia-Pacific lagoon area will play a major role in making sure there is enough room to meet the growing sales demand.
“It’s a good situation up here,” Bagley said.
One popular topic in local boat shops has been the Lake Whatcom debate.
“It really has changed how we sell the smaller boats. We never get people asking about two-stroke engines anymore, since they are being banned on Lake Whatcom,” Mattaini said. “It has helped us in selling four-stroke boats and other cleaner-running engines.”
The possibility of boats being banned on the lake, however, hasn’t slowed sales.
“What has people more comfortable is the local economy. Boat sales are closely tied to the economy. If people are confident that the economy is going in the right direction, boat sales pick up in all categories, from lake boats to yachts. That’s what has been happening for the past year,” Mattaini said.