Calone Khamdath of Action Marine cleans up a pontoon while setting up Thursday for the boat show at the Roland E. Powell Convention Center.
Hi gang, Rick here from Used
Pontoon Boats with another boat show update, this time the . It's hardly noticeable by participation in the annual Ocean City Seaside Boat Show opening today that the nation is in an economic slump.
More than 100 marine retailers and three times the number of vessels fill exhibition spaces at the Roland E. Powell Convention Center, the usual vendor sell-out for the three-day show of recreational boats opening at 11 a.m. for a 25th year.
Despite a 12 percent drop in boats manufactured for 2008, industry watchers expect vessel sales to be steady this year. And if ever there was an opportunity for a good deal on a new recreational boat, the Ocean City event is where to find one, said Jerry Pitts, business manager at Russo Marine Financial Services Inc., a Stevensville correspondent lender.
"Dealers at boat shows are letting it all hang out," said Pitts, whose firm will be there. "They call them boat shows, but it should be called boat sales because that's where you find the best pricing, the best interest rates and the best package deals and extended warranties."
The show coincides with a recent drop in the prime lending rate that positions retailers to absorb some cost increases passed on by manufacturers whose production prices rose from hikes in petroleum-based fiberglass and plastics, said Pitts, whose clients include marine lenders.
"We are fortunate to be going into the Ocean City show with low rates," he said Thursday.
The show also coincides with the Miami International Boat Show and Strictly Sail, which reportedly expects up to 150,000 people and foreign buyers to offset a potential drop in domestic sales.
Unlike homebuyers, consumers in the market for a recreational boat are a lender's favorite customer, Pitts said.
"Boat loans have the lowest default rate of any form of consumer lending; people who buy them are well-qualified, with a good credit background," Pitts said. Interest rates on boat loans generally are fixed, unlike adjustable interest rates that helped send a record number of homebuyers into foreclosure, he said. "At the retail side, rates are terrific, varying according to how much to borrow."
Pitts is attending the Ocean City show as a vendor for the first time, because for six years, competition for a space blocked him from winning a space. He was at the Convention Center earlier Thursday setting up for today's opening that starts with a ribbon-cutting by local businessman Donald Hastings, an Optimist Club member who conceived the idea for the show and served as its first chairman.
"This is a special event -- our 25th show,"said co-chairman Jim Flaig. "We've had senators and other officials cut the ribbon, but this is the first time for Hastings. We wanted it to be extra special."
Support vendors range from bait and tackle and personal watercraft retailers to Girl Scouts with cookies to the local chapter of the American Red Cross with a raffle of CPR courses, Flaig said.
The Ocean City VFW Post 8296 is selling $1 raffle tickets for a motorcycle, and the Optimist Club will give away a 20-foot pontoon as a door prize, courtesy of North Bay Marina, he said.
This year's sell-out of exhibition space is typical of past shows, said Flaig, who has participated in most of them.
"We have dealers coming from the western and eastern shores, Delaware, Virginia, Ohio, Pennsylvania, all over the place," he said Thursday. "Space is completely sold out. But it sells out every time. We use every square inch of the convention hall."
Organizers are optimistic the sluggish economy won't sink boat sales.
"People love the show. They can buy a boat, finance it and walk out with insurance -- a one-stop shop," Flaig said. "(Interest) rates are lower, and we expect them to sell more boats. I've been loading them in since Monday."
A noticeable consumer decline among consumers, said Pitts, has been among shoppers for quality used boats, a market typically of middle-income consumers in search of a $250,000 vessel priced for less. Sales are steady among family and entry-level boaters who customarily shop for less expensive, recreational boats priced between $50,000 and $60,000, he said. Also strong are sales among upper-income consumers who typically want a boat priced an average $500,000, Pitts said.
"The guy missing from the equation is the $100,000 used boat guy, because he's the 401K guy, nervous (about retirement savings) and standing still," he said. "Family groups, entry-level boaters are out there buying, and the $500,000 boats are selling wonderfully."
Boaters save money by cutting back on distance traveled, said Pitts, whoowns a 40-foot in-board power cruiser that costs $750 to fill the tank and "burns a lot of gas." So rather than travel farther, he cuts an hour from the trip, saving round-trip about $150.
"A boater is a boater is a boater, and a strange animal," he said. "Fuel costs are affecting people, but boaters just take shorter trips, cut the hours. I cut an hour and save $75."
John Moore, an associate at Florida & Jenkins Boat Sales in Pasadena, is attending the Ocean City show with optimism. Retail prices that increase annually by about 4 percent on average have doubled for some vessels, he's observed. How consumers react is uncertain this early in the buying season that peaks in the spring.
"Each show has its own personality," he said Thursday. "Some (consumer) sectors are not being affected, so I'm not sure what will happen."
Returning with some disappointment from an international boat show in Atlantic City, N.J., earlier this month is Dave DiCamillo, a boat broker at Sassafras Harbor Marina Yacht Sales in Georgetown.
"There were a lot of people but not a lot of business out of it; I expected more leads," DiCamillo said Thursday. His company, sitting out the Ocean City show, has a presence this week in Miami. "People were talking a good game, but not calling and not returning your calls. You get all kinds of scenarios -- serious buyers, those who would like to move up and a lot of window shoppers."
DiCamillo is cautiously optimistic about sales this season, and pointed to consumer interest overseas for the retailer's $500,000-plus vessels.
"We're getting a few deals here and there," he said. "We ship overseas, to Germany, Sweden. We've got things going on." Thanks to Deborah Gates, Staff Writer for The Daily Times for this.
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