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Tuesday, February 14, 2012

Boating Business Rides Recovery

Here is a great article from the Detroit News:
February 10, 2012 at 10:32 am

Michigan boating business rides wave to recovery

By Jaclyn Trop

The Detroit Boat Show at Cobo Center is riding this wave of tentative recovery, boasting more boats, brands and leased exhibit space than in prior years when it opens Saturday, said boat show spokeswoman Nicki Polan.
Sales of luxury yachts, refurbished boats, dock space and maintenance services are increasing, Metro Detroit businesses say. Boat repossessions are diminishing, a local company reports. And yacht club membership is recovering, according to two local clubs.
But boat registrations still need a life preserver. Michigan boat registrations have fallen for seven consecutive years through January, according to the Michigan Secretary of State's Office. The result is fewer watercraft on the lakes.
Still, owners are investing more money in the boats they already own, said Mike Tusa, owner of Mike's Marine Supply in St. Clair Shores. The business gains are due to an improving automotive industry and a bump in consumer confidence, he said.
"Since the first of the year, we have sold numerous electronics packages to people who recently purchased new boats or have decided to upgrade equipment on their current boats," Tusa said.
Scott Gregory II has seen an upswing in business at his Detroit-based detailing service, Scotty G.'s Mobile Detail Service. Business nearly ground to a halt last winter, but "this year, I'm having a hard time keeping up."
"I think things are turning around slowly," he said. "I think we're through the hardest part of the recession."

Sales of luxury yachts are projected to increase more than 7 percent nationwide, and sales of powerboats 15 feet or longer have risen above the February 2006 level for the first time in almost six years, according to the Michigan Boating Industries Association.
That's good news for Michigan, which ranked third in the nation behind Florida and Minnesota for the
number of boat registrations in 2010, the latest year available, according to the U.S. Coast Guard.
The nine-day Detroit Boat Show reflects the industry's comeback by featuring three times as many boats 30 feet or more in length than last year, Polan said. The star is a 45-foot Sea Ray that measures 3 feet longer than 2011's largest boat.
Sales of exhibit space are up 24 percent over last year as dealers expand their presence, she said.
"Many dealers attribute up to 50 percent of their annual sales due to the sales and leads generated during the nine days at Cobo," Polan said. "So if dealers are buying more space, then people must be buying boats."
A renewed interest in boating is evident at the Detroit Yacht Club, where membership is on an upswing, said membership director Jack Lyon.
The Belle Isle club lost about 30 percent of its membership from 2007 to 2009, but "in the past two years, and more so this past year, we have gained almost 20 percent back," Lyon said.
Membership this year is expected to rise to levels seen before 2007, he said.
The Jefferson Yacht Club is experiencing a similar membership resurgence with a 23 percent increase from last February, said Kathy Nucci, a club membership director.
But some Michiganians remain reluctant to spend money on registering their boats. There has been a 4.4 percent drop from January 2005 to this January in the number of registered watercraft, which are charged from $5 to $448 a year, depending on their length and use.
As a result, state revenue from registrations has fallen 9.4 percent to $9.5 million in the 2011 fiscal year from six years ago.
Other indicators are producing optimism. Boat repossessions began to taper last April after reaching all-time highs the four years prior, said Jeff Henderson, owner of Harrison Marine Inc., which sells repossessed boats in Harrison Township.
"We're not as busy as we used to be," Henderson said. "For a few years, we were just busting butt trying to keep up with it all."
An especially bright sector is the market for refurbished boats, said Scott Gregory, owner of Gregory Boat Co. in Detroit; he is Scott Gregory II's father.
New boats "aren't selling like they used to," Gregory said. "People can't afford them."
Providing refurbished boats at a fraction of their original cost, "we've created a new market for people who wouldn't be in the industry," Gregory said.
"There's some great old boats that need new engines, and if you double the fuel economy, they're marketable," he said.
Sales of brokered boats have increased during the last two years, Gregory said. This year, there is a waiting list for his other main business, winter storage.
"The number of boats on the lake is down — no question about it — but our company seems to be maintaining a certain level."
There is cause for continued optimism, Gregory said. He anticipates more companies moving into Detroit and manufacturing firms into the state.
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