Stokley
Stokley’s Marine owner, Ralph Stokely
Lexington, KY - Any list of businesses or institutions impacted by the recent recession is usually topped by the housing market along with the auto industry. But as you work your way down the list — past the rubble of Ponzi schemes and bailouts — the roster becomes more diverse and begins to diverge into leisure or recreational industries. And as with every other American business, the boating world was not left untouched by the financial turmoil that began to significantly manifest in 2008.
Like their counterparts in Detroit, boating manufacturers and dealerships had to adjust their business models to the turbulent economic times. Prices were lowered and thus created less margin. Cheaper materials were used to construct the crafts, and more work was outsourced to foreign countries as yet another way to cut costs.
But according to local dealers and repair shops, indications are the boating world is on the verge of rebounding to pre-recession numbers, if it hasn’t begun to bounce back already.
“We kind of stuck it out,” said Ralph Stokley, owner of Stokley’s Marine in Nicholasville, Ky. “It’s been slowed down considerably, and we saw a big drop off when the economy went down. ... Customers are more value-oriented now than they were, but they’re buying boats again. They’re starting to buy new and used again, and we’re making sales — better from ’09, and they’re improving and getting better every year.”
For sure, that time beginning in 2008 was difficult for the industry, with plants shutting down, more work sent overseas and other creative ways being sought just to stay alive. Things were no different for those with boating interests in central Kentucky.
A number of local dealerships were forced to close their doors during that span, as leisure items such as boats took a backseat to the aforementioned housing market and auto industry. And the dealerships that remained open found themselves walking a delicate tightrope between reducing employee hours and overtime at times during the year to avoid completely eliminating positions.
“I’ve always said the first two years I joined were the worst two years of my life,” said Danny McSorley, who became co-owner of Marine Works in Harrodsburg, Ky., with Rick Bartley in 2008. “But Rick and I were saying that if we can make it [during the recession], then we don’t have anything to worry about. The biggest thing is take care of your customers and satisfy your customers, bend over backward to make them happy, and then they’ll come back.”
Certainly some factors beyond the control of McSorley and his peers have attributed to the rebound, such as the overall improvement of the economy. That aside, the biggest element could be the difference their target consumer’s buying habits. That not only includes a stronger propensity to buy a used boat over a new boat (thus creating more flow at dealerships), but the customer’s willingness and ability to find funding through new or at least untraditional financing sources, something that has also reared its head in the auto industry.
Consumers also have more options now when it comes to actually looking at boats, as the dealership nowadays is rarely the first stop. Many potential buyers will price-shop online before visiting a dealer, something that’s becoming more commonplace thanks to more manufacturers creating fixed-priced initiatives. That’s an especially attractive pro- gram for local dealers, as it allows mom-and- pop shops to compete with larger outlets such as Bass Pro Shops because the price will be the same at each, thus making an intimate shopping experience often the difference.
Challenges and hurdles remain. By its nature, the boating industry is very seasonal, beginning in January and February during the traditional boat shows and waning around Labor Day. During that time, sales go through a cycle, beginning with fishing boats before gradually progressing into pleasure boats and cruisers. The preferences of customers at the time of purchase will deter- mine the amount of sales during each phase of the cycle.
There are other influences, as well, that determine sales flow, such as the current state of what’s involved with ownership of a boat. Along with repairs and maintenance, the price of fuel plays a huge role in not only operating the craft, but in towing it to various destinations. Stokely said that has been tempered in recent years by more fuel-efficient motors that can save up to 40 percent of fuel during operation as well as other new technology. Those innovations would have eventually materialized, but they were per- haps expedited by the recession and, again, that change in consumer focus and spending habits.
“There’s still a lot of competition out there,” McSorely said. “Plus there’s more to compete with other than other boat dealers. We’re competing with golf, backyard swim- ming pools and other things. We have to be on our game more than ever now.”