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More than 100,000 manufacturers, retailers, brokers and buyers have converged on Miami for one of the biggest boat industry events in the world.
Each year, the Miami International Boat Show and the luxury-oriented Yacht and Brokerage Show on Miami Beach, simultaneously set up shop. The showboat events feature thousands of watercraft and accompanying aquatic accessories, all of which are up for grabs.
Whether its aluminum fishing boats or mega yachts, one theme is prevailing across price categories at both shows: boat sales are back.
"Almost everything is selling," says Thom Dammrich, president of the National Marine Manufacturers Association (NMMA). "Pontoon, ski-and-wakeboard boats—both of those are increasing double digits, and salt water fishing boats are very strong."
That's welcome news for an industry rocked by the recession. Like other types of big-ticket discretionary items, demand for recreational boats plunged dramatically in the economic downturn. Sales of new boats sunk 60 percent from their pre-recession peak, staying sluggish for years as the much larger pre-owned market held steady. The wave of distressed supply drew in enterprising bargain hunters, who dominated the market.
Yet if the buzz at Miami's shows is any indication, the tide seems to be turning.
The NMMA estimates new boat sales grew 7 to 8 percent last year, and it forecasts similar momentum for 2015. While sales activity is still about a third below that mid-2000s peak, consumer spending on boats, marine accessories and other related goods has surged back to pre-recession levels, according to data. In 2014, spending on the recreational boating in the U.S. approached $40 billion.
Perhaps it's no coincidence that boat sales have been tracking a booming Wall Street, which is perched near historic highs.
"Over the last two years we've seen a slow improvement, and it's directly related to the stock market," says Mark Elliott, a yacht consultant with International Yacht Collection.
"As the stock market goes up our phone calls increase, so with the stock market in uncharted territory and demand pent up, people are buying yachts," he added.
Elliott says demand from European and Russian buyers has begun to cool, but wealthy Americans are making a comeback. He expects to see some of the Russian owned 250-400-foot mega yachts come to market this year, given the far-reaching effects of Western sanctions and the steep crash in the ruble currency.
At the Yacht & Brokerage show, the yacht consultant is peddling a string of pre-owned yachts docked along Collins Avenue—including a 2003 125-footer that sleeps 10 plus a crew of eight, boasts a hot tub, and comes with a tender.
The price tag is $8.4 million, though it can be chartered for $85,000 a week. Maintenance is about a million dollars per year and it costs $40,000 to fill the tank with gas.
The recovery is taking root in lower priced watercraft as well. Entry level vessels are also enjoying an uptick in demand. Industry leader Brunswick Corporation has tripled production of pontoon boats to keep up with demand.
"Our bigger models are completely sold for over a year. Pontoons and fishing boats—which tend to be a smaller, different income level—have now begun to reach pre-recession levels," says Dusty McCoy, chief executive of Brunswick.
"So one end of the market and the other end... are very strong, growing very healthy," he said.
Experts point to an improving labor market, rising consumer confidence, and increasing disposable income, boosted in part by cheaper gas prices.
NMMA's Dammrich notes that when gross domestic product grows at or above 3 percent, boat sales tend to well. In the final quarter of 2014, annualized growth checked in just under that threshold.
Another key reason: manufacturers have rolled out more models with more bells and whistles, at lower prices. Take Brunswick: the company debuted 11 new boat models each of the past two years, double its offerings in previous ones.
"The used market is our biggest competition and it's larger than it was prior to the recession...so for us to bring the used boater to the new market, we need to do a couple things," McCoy said. "Get the price right for new boats so the spread between new and used begins to decline, but more importantly...we need new boats with new innovation features."
That approach seems to working. Brunswick recently reported earnings that beat consensus estimates, with growth in its boat segment jumping 23 percent.
Still, the industry faces headwinds that may shipwreck the recovery. The stronger U.S. dollar is already cutting into sales overseas, with American-made boats now pricier in other currencies.
If slowing growth at home and abroad begins to weigh on the U.S. rebound, that too could have an effect. The slow, choppy recovery of the U.S. housing market could trickle down to boating, since new home sales and new boat sales are directly correlated.
Nonetheless, brokers in Miami say business is shaping up to be brisk. And certainly buyers have their pick, including a $3 million 110-foot sailboat with a 125-foot mast, and a $1.2 million 50-foot Cigarette Racing boat modeled after the new 2016 Mercedes-AMG GT S road car.
The latter goes up 135 miles per hour and it's painted the same solar beam yellow. Sadly, the car is not included.