Recreational boating industry thrives
Darla Slipke | April 23, 2006 08:23 PM | Link
Significant growth in the recreational boating industry over the past five years has helped business owners to survive a decline in sales this year caused by higher fuel prices.
Steady growth in the boating industry slowed this season with the rise of fuel costs. However, the industry has been growing in other ways that compensate for the recent loss in sales. Local businesses aren't suffering too bad because of growth in prior years, but many worry about the effects the fuel factor will have on the future of the industry.
“There is growth, definitely,” said Linda Morginson of Arnie’s Boat Sales and Service in Lawrence, "but with the gas prices, we’re not sure what to expect.”
Morgison said the cost to fill her twin-engine boat with fuel has increased from approximately 100 dollars to 300 dollars, and said that some boats cost twice as much to fuel.
“Right now because all the fuel prices have gone up, people aren’t buying as much,” Garett Nolte, owner of Mid-Kansas Marine in Hutchinson, said. “They still have the boats and the accessories, but they aren’t going out as much." Nolte said this has caused the market for used parts and service work to increase.
Linda Morgison of Arnie's Sales and Services in Lawrence agrees about the demand for services and used parts. She reported a 40 percent increase in service work at Arnie's over the past few years, as well as a higher demand for parts and accessories. But Morgison said that she has seen more people going boating in the area, not the decline that Nolte reported.
“People are staying around and doing more boating here, which increases our business,” said Morgison. Beginning after September 11, 2001, Morgison said she's noticed more people within a 50 to 75 mile radius going to nearby lakes rather than traveling places. Her father-in-law, who owns Arnie's Sales and Service, said that the high fuel prices have continued this trend, causing even more people to stay close to home and try to save money rather than taking expensive vacations. Joe Finnegan, manager of Boater’s World Marine Center in Topeka, said that more families are going boating. It's a way for them to vacation together and spend time together.
Chris Coffman, assistant manager of Clinton Marina, has noticed several other factors causing growth in the industry in recent years.
"Rates on loans are excellent right now," Coffman said. "Also, the state is really trying to accommodate for boaters." Two years ago it recognized National Marina Day, and a number of classes on boating safety are offered through the coast guard auxiliary. The number of registered boaters in Kansas increased by 3,000 from 1996 to 2000, according to registration numbers provided by the National Marine Manufacturers Association.
Around Lawrence, businesses report growth as well. Joe Finnegan, manager of Boater's World Marine Center in Kansas City, Mo., says his business has grown between 8 and ten percent in the past three years. Half of the boats at Clinton Marina are less than five years old. Coffman said the Marina added dozens of new boat slips a few years ago and might add more in the near future. The Marina has a waiting list of 100 people. Morgison said that they are backed up with repair work and customers sometimes have to wait a month for repairs. That's a lot of time out of the boating season.
Preliminary development plans for a new boat dealership at the intersection of Clinton Parkway and Lake Pointe Drive were approved by the City Planning Commission in February. Coffman says that the community could probably support a boat dealership. Morgison said a new business would help them keep up with the overwhelming demand for boat services.
The boating industry is expected to keep growing, according to a study published by Freedonia Group, an international business research company. The report estimated that recreational boating in the United States would continue to grow at a 4.8 percent annual rate through 2009, to reach $16.7 billion dollars. Globally, the industry was projected to grow from $23.7 billion in 2005 to $33 billion in 2010, an annual growth rate of 7 percent, according to the same study.
A number of factors might account for this future growth. According to the study done by Freedonia, there has been a shift toward larger, more expensive boats. Mike Preston of Blue Springs Marine shop in Blue Springs, Mo., said that the growth he’s seen has been primarily this shift to larger boats. The Freedonia study also said that development of higher performance, more environmentally friendly engines might attract customers. Also, a rise in the population of people age 45 or older would cause growth in the industry because this age group is the primary consumer base for boats.
The boating industry is a tough business because it is seasonal. Rising fuel prices add to the difficulties this season. But the industry has been growing in recent years and businesses hope that growth will continue when the economy improves. Until then, they hope that the growth of business in recent years will carry them through.
“We’re just trying to stay above water,” Morgison said.
(Source: Licensing Section of the Kansas Department of Parks and Wildlife)
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