Dealers in the boating industry have been on quite the roller-coaster ride since 2019. First, when Covid-19 hit, they had to shut down until they could figure out how to keep employees safe while working on the shop floor. Then people realized that getting out on the water was one of the few safe ways to practice social distancing. Boat sales surged, and retailers and manufacturers scrambled to keep up with deliveries taking up to a year. Next, as the pandemic waned, so did demand. Dealers found themselves worrying about carrying too much inventory.

Today, dealers are facing more typical concerns: an uncertain economy, interest rates, an election year, finding good help, and getting some boats insured for customers. But in good news, coming out of the winter boat shows, Matt Gruhn, president of the Marine Retailers Association of the Americas, says he was hearing reports of steady business. “It’s an even keel,” Gruhn says. “It doesn’t seem like a lot of dealers are saying, ‘I had an extraordinary show,’ but I haven’t heard anyone say, ‘I had a horrible show.’ ”

With the surge in boating activity during the pandemic, salespeople basically filled orders and collected fat commission checks. Now that demand has ebbed, they are putting in effort to close deals. “Dealers are working hard for it,” Gruhn says. “We had a concern that dealers would be out of practice on generating leads, nurturing them and overcoming objections.”

In early March, the biggest concern for dealers and consumers was interest rates. Dealers were paying more interest on the boats in their showrooms, and consumers were holding off on pulling the trigger on a purchase. “We hear a fair amount of concern,” says Chad Lyon, managing director at Wells Fargo. “Short-term interest rates that floorplan lenders pay are up 500 points over the last two years. It’s the highest it’s been in 15 years.”

Premium Profits

Seattle Boat has five locations on Lake Union and Lake Washington, including three dealerships with service and marina facilities, a rigging and storage shop in Kent, Wash., and a marina with a boat club and fuel docks. Year-round staff numbers 100 people, and between 50 and 75 seasonal workers are added. The company had revenues of $53 million in 2023, with $33.7 million coming from new- and used-boat sales. Service accounted for 16.4% of business, while 12% was marinas and storage, and 8% came from boat club and fuel dock revenues.

“Overall, the strong buyer is still out there, and salespeople are having to work harder for the sales again,” says co-president Elizabeth Bohling. The company carries Cobalt, Malibu and Barletta. Cobalt continues to be the best seller, followed by Malibu. In the Seattle market, Bohling says pontoons have not gained the traction that they have in other parts of the country.

Because of the continued influx of new people to Seattle, thanks to the tech industry, Bohling says many sales are to new boaters who need to be properly trained. “We’re set up for convenience for the boater,” she says. “They go out with a delivery captain for a minimum of four hours and learn how to dock, trim the drives, set the surfing wave.”

Regarding inventory, Seattle Boat stayed ahead of it using tracking software. A bigger problem has been parts shortages and longer wait times for warranty claims. “The last year has mostly been engines and drives,” says Bohling, explaining that sterndrives are more popular than outboards on Lake Washington and Lake Union.

Another hot-button issue for virtually every business in the industry has been workforce shortages. Seattle Boat developed a junior tech program where it pairs inexperienced mechanics with “super techs,” more experienced service personnel who mentor the youngsters and help them earn their certifications. The dealership also partners with the Northwest Marine Trade Association on job fairs and has a referral program. An employee who refers a new staffer gets $50. The number bumps up to $150 if the person lasts six months and $500 if the employee is there for a year.

As in many waterfront communities, hourly employees are finding it harder to live closer to the dealership, so they move farther away and commute. Seattle Boat gives them a $50 fuel stipend in every pay cycle.

Locations, Locations

The Boat House Group has three locations in Florida and nine in the Midwest, and about 10% to 15% of its customers boat year-round at the company’s marinas in both areas. “We have many customers who live in both places,” says president Rick Gasaway. “We have many Wisconsin customers who live in Naples or Cape Coral, Fla., too. They have a Bennington pontoon in Wisconsin and a 34 Everglades in Florida.

“Our goal has been to give our customer a 360-degree ownership experience,” he adds. “We have things like boat clubs to get them into the lifestyle and potentially convert to boat ownership. For customers who purchase a boat, we’ll store it, winterize it and get it ready in the spring.”

Five Boat House Group locations are on a lake or other waterway. Rigging, repowers and more complex service work is done at an operations center in Wisconsin. “We tried to become more efficient with our operations,” says Gasaway. That service has also expanded to include ride-and-drive events, open houses, rendezvous and a Women on the Waves program focused on teaching females how to drive and dock a boat. “We continue to get to build relationships with our customers and get to know them and their needs,” he says.

At the Boat House Group location in Johnsburg, Ill., the company sponsors a three-day concert with a stage on shore and plenty of space for boaters to drop the anchor and listen to music. “It’s an event that brings together the community and helps with our employees,” Gasaway says. “They feel part of a business that supports the community, and it’s a fun place to be.”

The group carries Grady-White, Cobalt and Boston Whaler on the Lake Michigan shorefront, and Nautique, Supra, Moomba, Godfrey and Regal on smaller lakes. The Florida outlets carry Solace, Everglades, Parker, Cobalt and Godfrey. At all the locations, Gasaway says, the manufacturers have been helping his team manage inventory, including curtailing floorplan payments and providing rebates on older boats to help get them moved.

“They realize that in some cases you may be sitting on some inventory,” Gasaway says. Some initiatives that have helped move boats include throwing in options for free or offering a deal on storage or winterizing.

The Boat House Group offers financing and insurance, which has been a good business source for the company.

While he says the group will always welcome good technicians, workforce hasn’t been a problem. “Our turnover is low,” Gasaway says. “We have a management team, and we continue to add strength to that team. We haven’t lost key people.”

To maintain staff, the Boat House Group also has a program in which it pairs new technicians from local trade schools with a master tech; the company also offers internships for finance and sales. For someone who wants a change of location, the business will help an employee move from a store in the Midwest to one in Florida. “They want to see that we offer opportunity and career pathing,” Gasaway says.

Winning the LOTO

Located on Missouri’s Lake of the Ozarks in Osage Beach, Mo., Performance Boat Center has evolved into a go-fast-boat destination on the famous waterway, with sales, full service, restaurants and entertainment. “Any day on our property, you’re going to have live music, restaurant activity, boat service, it just never ends,” says Performance Boat Center co-owner and general manager Brett Manire. ”We’re going to have a lot going on this summer, and tourism is going to be another record-breaker.”

The full-service dealership for Marine Technology Inc., Sunsation Powerboats, and Princecraft and South Bay pontoons has a Florida location in Hollywood. The headquarters in Missouri is situated on about 7 acres and consists of seven buildings covering 125,000 square feet. PBC employs 55 people year-round at the lake, with another 15 in Florida. That number jumps to about 400 with seasonal employees, including the restaurants on the property. “It starts with the people,” Manire says. “I have the best team we’ve ever assembled for the 2024 season, from back office to salespeople, service technicians.”

He says the wow factor that comes with working at a high-performance dealership that sponsors an offshore racing team draws potential employees. “The atmosphere, the look and feel, the racing, the events, these guys work hard all week long, and some get to go racing or be in a poker run on weekend,” Manire says.

Conversely, the cost of real estate and rentals in the area has made it hard to bring in young talent. “It’s a hurdle when I’m interviewing,” he says. “I ask before I hire them, ‘Where would you live around here?’ And they have an uncle or a relative who lives on the lake.”

PBC doesn’t release financials, but Manire estimates that sales make up 60% of annual revenues, with 30% coming from service and 10% from storage. His business partner and marina co-owner Mark Waddington owns 30% of Sunsation Powerboats in Michigan and is helping back a new 65,000-square foot manufacturing facility. Performance Boat Center also takes 80% of Sunsation’s production for retail sales.

While the dealership didn’t exhibit at the Miami International Boat Show this year, the company had two salespeople at the MTI booth in the Miami Beach Convention Center and two others in the Mercury Racing display at Grove Harbor. They took orders on high-performance catamarans from their sister company Performance Powerboats, along with MTI center consoles and catamarans. “That group of people hasn’t slowed down at all,” Manire says.

Most customers in the six- and seven-digit, high-performance market are paying cash for boats, and Manire says he has about 20 pontoon boats in inventory that he needs to move before he’ll order more. However, the bigger obstacle to completing deals has been insurance costs. “A challenge I’ve been trying to overcome is insurance,” Manire says. “It’s frustrating to get a person to grasp spending a million dollars on a boat and you can’t get it insured. Having to spend $2,000 a month for insurance takes the fun out of it.”

Steady Work

One challenge for any marina or dealership in a northern climate is keeping technicians busy when the weather turns cold. “For our book of business, we have four different seasons — launch season, use, haulout in the fall, and winter projects,” says Shae Cross, who on Oct. 31, 2023, took over as president of Irish Boat Shop, which has three full-service locations in northern Michigan. “We continue to have a full book of work for all our service people through the winter. People are spending money to get ready for the boating season.”

While most dealers were concerned that sales would slow in the fall and winter, Irish Boat Shop has sold about boat per week. “We had five deals in January,” he says. “We went into the winter pretty heavy on the towboat side.” The company carries Boston Whaler, Chaparral, Nautique and Premier.

Irish Boat Shop has carried Boston Whaler since the 1960s, and Chaparral, Nautique and Premier are more recent partnerships. Cross says all the manufacturers worked with the dealership to manage inventory and provide incentives to help move boats at shows.

Regarding floorplan and interest, Cross says, “I wouldn’t call it a big concern. It’s something that you manage. You use your cash in the best way possible. When floorplan rates are low, use your cash to pay off debts, and when interest rates are high, you pay it down faster.”

To maintain workforce, the company works with the Great Lakes Boat Building School in Cedarville, Mich., the Landing School in Arundel, Maine, and IYRS School of Technology and Trades in Newport, R.I. Irish Boat Shop offers a $15,000 scholarship at GLBBS, and the dealership’s human resources director Laura Kohler has a series of initiatives to attract and retain employees.

An employee referral program offers $1,500 plus a $500 sign-on bonus for new workers. Two-year, paid apprentice training program for marine techs, fiberglass repair, woodworking and paint are available, and internships are offered in human resources, accounting and management. Local outreach efforts include working with freshmen and sophomores at local schools and participating in trade and counselor’s days.

In January, Irish Boat Shop attends the IYRS Job Fair in Newport, R.I., followed in March by a visit to a similar event at the Landing School. At GLBBS, the dealership is a Marine Dealer Education Network member, participates in career day, and hosts students at its facilities. The dealership has initiatives for military veterans, offering on-the-job training.

Once an employee is in place at Irish Boat Shop, retention efforts include a robust benefits package, an annual employee picnic, welcome lunches for new hires with the crew, winter holiday celebrations, monthly town hall meetings, a team-based work environment, a safety committee, and continuing training and education.

MRAA’s Gruhn stresses the importance of bringing new blood into the industry. “We need to demonstrate to high school kids, college kids and their parents that you can have an amazing career in the boating industry,” he says. “We have to create good businesses and great places to work that will attract good people.” 

This article was originally published in the April 2024 issue.