From the Helm

Published in the January 2013 Issue January 2013 News Brady L. Kay

In elementary school I remember my teacher clearly stating there is no such thing as a dumb question. Turns out Mrs. Tueller was wrong. While doing our research for our annual Buyer’s Guide, I asked some of the veteran manufacturers for feedback on the industry today, compared to those years when the houseboat market was booming. We discussed all the positives first, but this is where my dumb question comes in. When I asked what the negatives were to having too much business, I heard a lot of silence on the other end of the phone. I swear you could hear crickets. If there were any negatives, no one remembers them now.  

 “It wasn’t unusual for the lead time to be 6 to 12 months back in those days,” recalls Sunstar President George Roberts. “Lots of new houseboat customers thought they could come to the factory and just pick one out.”

“Back then we were about a year out so most folks knew if they ordered in spring it would be next year until the boat could be built,” adds Thoroughbred President Shawn Heinen.

While the past five or six years have been a struggle like few have ever seen before or even predicted, you can’t help but be impressed by the determination of some manufacturers to make those changes necessary to stay in business. I feel their short-term success during these lean years will lead to better days ahead. While customers have always been important, veterans like Roberts, who has been in this industry nearly 30 years, know that it is truly the key to survival.

“Our main goal at Sunstar is to make sure the customer is happy when we are done,” explains Roberts. “We always tell our employees that if not for the customer, we don’t work. I have been in this business for 27 years and I’m not sure I will ever see the demand that we had in the past.”

Industry giants like Sharpe Houseboats and Horizon Yachts were recently forced to close their doors, yet we feel we haven’t seen the last of them and expect to see many former manufacturers back and building houseboats again soon.

“While the closing of some factories has made for less competition, I hate to see it happen because in our area, hundreds of jobs have been affected,” explains Roberts.

“The market has contracted for all houseboat manufacturers and those who have survived are doing so by scaling their operations to fit the market demands for lower unit volume,” adds Gary Smith, the vice president of sales and marketing for SkipperLiner.

Facilities closing doors is hard on everyone, but good news for the industry did come a few months ago when we learned Sumerset Houseboats was back in production. 

“Sumerset was the biggest and still is the biggest name in houseboating,” says Heinen, who is the new president and builds the line at his new facility along with the Thoroughbred houseboats. “We had a few dealers wanting to sell houseboats but felt they really wanted to continue selling the Sumerset name if possible. Sine acquiring the name, we have already built and shipped one boat and have sold two other Sumerset brand boats as well.”

SkipperLiner is another one of those names that is well-known throughout the industry. Since 1971, this builder as been producing high-quality custom houseboats and thanks to the recent acquisition by the Griffith family, the SkipperLiner brand will be enjoyed by future generations as well.

“With over 1,000 vessels built since inception, SkipperLiner has a long history and extensive experience meeting and exceeding the needs of its diverse customer base,” says Smith. “The previous owners were victims of the economic downturn and some other business decisions that worked against them. However, the current owners intend to continue the legacy of excellence by understanding our customers’ needs and delivering on that promise.”

Newcomers like Compass North Industries, who manufacturers Bravada Yachts as well as Adventure Series Houseboats, not only began first-time production during this downturn in the economy, but have thrived.

“Having been houseboaters ourselves, we were very familiar with what had been offered in the industry,” says Compass North Industries President Jim Goettl. “About the time the idea of Bravada Yachts was developed, it had become very evident to us what the houseboat consumer was desiring and we set out to transform how things had been done up until then.”

Another industry giant still thriving today is Stardust. Since the mid 60s, this manufacturer has been building high-quality houseboats. When the new owners took over a few years back, they looked for other ways to keep its production lines running. The Kentucky-based manufacturer also branched out and started doing business in other countries as well, which has kept them running as a successful business. 

“Stardust built a 110-foot houseboat that went from St. Petersburg to Moscow Russia, all on its own power,” says Stardust CEO Terry Aff. “This is the equivalent mileage of a trip across the Atlantic Ocean.”

While finding customers overseas is something others have been doing as well, Thoroughbred also used these last few years to further its product.

“Thoroughbred has been able to stay in business due to a couple of big items: new innovative designs with glass sides, taking trades and keeping overhead low enough that we can survive building one boat a month,” says Heinen. “The glass side boats have been a hit over the last few slow years with 50 percent of our production in the last three years being insulated glass boats and about 75 percent of our deals start as a trade deal.”

Sometimes there are situations that are out of your control, which make surviving those lean years that much harder. For example, working with other companies to supply the parts you need can be tougher then anticipated.

“The biggest challenge has been the economy like everyone else,” says Goettl. “Suppliers and vendors have been less likely to stock items in these trying times, so managing lead times on even the most common of items can sometimes be a highly orchestrated event.”

Destination Yachts is another one of those builders who looked towards future growth instead of dwelling on the economy and was also able to control its overhead.

“We felt the need to enhance our customer service and sell reach,” says Destination Yachts President Sheldon Graber. “Last year we refocused on working with partners that are in key areas of the country. Our size and overhead cost is what helped our company. Plus we sublet a lot of our work to local Amish shops so as we slowed down we just ordered less and had no overhead involved.”

No one knows for sure what the future will bring, but I can’t help but appreciate the excitement and enthusiasm from the current manufacturers that hasn’t been felt like this in a couple of years. While most speculate it could still take a few more months, the general sense is that we’re on a gradual increase once again as an industry.

“For 2013 we see a slowly improving market for the houseboat industry, but I don't expect we'll ever see the kind of spending we saw during the '80's and '90's,” says Smith. “What this means is that now, more than ever, we need to be as efficient as possible on the manufacturing side in order to best serve our customers and deliver the right product at the right price.”

“I predict 2014 will be the first truly growing year for our industry,” adds Heinen. “Late in 2013 I would suspect orders to start picking up as many folks like a new boat every few years and this has not been happening. Used boats will continue to grow and improve in value, which will also help increase new boat orders.”

No matter the timetable, it’s clear the top builders listed in our annual Buyer’s Guide have positioned themselves well and are now ready to earn your business as this industry continues to grow. 

 

[Pull Quote] “When I asked what the negatives were to having too much business, I heard a lot of silence on the other end.”

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