Now there’s a challenging head-line. I dare to write about it after having been involved in it for 25 years now. I have had a chance to follow the industry from the very hands-on work all the way to the top of the organizational food-chain. The overall economic development has always played an important role in the success of any discretionary recreational activity of the consumers. The 2008 financial crisis had a devastating impact on the marine industry. Quite a few countries saw a sales drop of almost 50% in just one year. It took 10 years to recover. The present situation is unexpected to say the least but when you think of it it’s quite natural. You can’t travel so you come up with things to do in your home grounds. Summer houses almost sold out, so did boats too. But not quite. Even though the demand is high and unit registrations are up by 33 % in the first 5 months in Finland there are boats available. The increased demand has mainly occurred in smaller power boats. In this country it means in and around the 5 m range and 50 hp engine. The effects of the pandemic are not seen in the sailboat business, at least not yet. New sailboat deliveries before the 2008 crisis were in the level of 200 units in Finland. In the last few years, and even this year, the sales may go up just to 20 units.
After a few phone calls to manufacturers and meeting with a few dealers, they really struggle with deliveries as everybody wants to have their new boat for Midsummer (end of June here). The crazy staycation phase started already last year with registrations up by 17 %.
Now let’s stop here for a while. 50% of Finnish population is vaccinated by now. The writer already has both jabs. Last winter I did not get to spend the winter months in Spain as planned but now our flights are booked for early October. And I firmly believe I am not alone. The long built-up urge for travelling will eventually start to unravel. This need is built in the nature of the present day individuals. Now we may ask what will happen with the domestic recreational investment boom. It will slow down and that’s only natural. We will, at the end of 2022 and in 2023 start descending to 2018/2019 numbers. After looking at the financial results of some companies even in these extraordinary good times it makes you wonder what has been done wrong. I do not wish to start speculating on the reasons, there may be quite a few.
So where do we go from here in terms of building up a sustainable future for the industry? In good times it is just so easy to forget or simply put aside all “unnecessary” marketing costs. The fact remains that without a continuous and heavy enough investment in promoting boating the future will not be all that bright. The sustainable growth evolves from long lasting and cleverly targeted campaigns that are not planned just for one season. They need to be on all the time.
One may also ask if the products the industry offers to the market represent the expectations of the present-day consumers in style, design, usability, connectivity and resale value/plan. There are plenty of really good examples where all this has happened. Unless we carefully monitor and evaluate the rapidly changing buying and other habits of the consumers, there is a danger that we will start losing people to other hobbies. This danger is evident especially in countries where the season is limited to just a few months.
This leads me to discuss a subject always on the lips of the industry: the boat shows. The shows are often seen and discussed just as an expenditure. This is, in my experience, a false approach. In Finland the main boat show is visited by 70.000 – 80.000 potential buyers (note: some 7.000 – 8.000 new boats are sold annually). Every 68th Finn visits the Helsinki International Boat Show. How good is that. Very good. It’s a world record of visits per capita to a boat show. Things keep changing though. The pandemic year has taught many of us skills to compensate the physical shows with virtual ones. This has been an attempt to keep the boating discussion alive. Will these replace the physical boat shows. I do not think so. Boaters always want to come, feel and experience. The show here is a real start for season. So, yes, it will come back. And will return with a bang. But, no doubt, there is an evident need for improvements and changes. The industry/shows will need to engage the public. A potential boater’s journey will very likely begin at a boat show. And the organizers have a responsibility to facilitate that. Education and boating community participation need to be enhanced. The consumer needs to leave the show with a positive mindset that will at the end of the day turn them to a life-long boater. On-site activities including entertainment and restaurant services will grow in importance. Virtual exposure is here to stay so the show producers need to invest more in new types of pre-show communication.
Boating and boat shows will both have a bright future. We just need to rethink how shows should be constructed in the digital era. The industry needs to acquire more knowledge and make use of that. They need to be ready for even radical changes. The industry also needs new people who can carry out the needed changes.
Dr Jouko Huju DBA, GMBA-Finland
+358 40 5509310
Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA