From The Helm: 2014

Published in the February 2014 Issue February 2014 News Brady L. Kay

It’s no secret. The houseboat industry has taken its share of lumps over the last few years with the down economy. Some manufacturers have been forced to close thier doors while others have simply done whatever it took to stay in business. But as a consumer, the slowdown in sales is actually a good thing for those considering buying a new houseboat in 2014.

“One positive for the consumer is the quality and innovation has definitely improved,” says Thoroughbred President Shawn Heinen. “The few remaining companies are working harder for sales so the consumer is definitely getting more boat then ever before.”

With some of the larger manufacturers going out of business, this has not only improved the situation for the consumers, but the manufacturers recognize the opportunity as well.

“The upcoming year looks good, now that we have less competition from builders who had the, ‘We won’t be undersold’ mentality, which hurt the profit margin for builders as a whole,” explains George Roberts, owner of Sunstar Houseboats.

“While the universe of buyers is smaller, so is the universe of manufacturers,” adds Gary Smith, the vice president of sales and marketing at SkipperLiner. “Those builders who remain are solid and have learned to be responsive to the needs of a very discriminating buyer. We’re leaner in our factory and more efficient, which is good for the customer. A buyer with good credit and manufacturers with solid financial statements are both good things for the future of the industry.”  

It seems the majority of the manufacturers who have continued to build boats during this slowdown have emerged with a greater appreciation for the industry and can now look back and see the good things that have come from the struggling years.

“We are feeling the positive effects of the moderate but steadily improving economic conditions,” says Compass North Industries President Jim Goettl. “I believe that the houseboat consumer continues to receive the benefit of the refinement the entire industry has had to endure. The manufacturers that remain have done so because they are strong, they have learned how to adapt and they understand that they must deliver a top quality product at a fair price while taking care of their customers.”  

This latest downturn not only affected new boat sales, but it’s also now influencing the used market as well.

“There have not been a lot of new boats built in the last six years, so anyone looking for a late model used boat are not going to find a lot to look at,” says Roberts. “Although sales in 2013 were not up, inquiries are, and I think houseboaters are starting to think more about building a new boat.”

How the current manufacturers have continued to stay in business varies, but having a consistent work flow is what some feel is the key to having future success.

“Our real hope is that 2014 is the year when orders start to back up,” says Heinen who is also the president of Sumerset Houseboats. “The best solution for our industry is to get a real backlog of orders so we can plan better and build more efficiently. This will help consumers as well as manufacturers.”

For Stardust, the slowdown in the industry forced the manufacturer to pursue new markets and be more creative with its custom designs.  

“Our success in the foreign market was very important in 2010 and 2011 when the domestic market was very bad,” says Stardust CEO Terry Aff. “Now that the domestic market has improved, we expect our share of the market to increase due to our innovations and new construction.”

Surviving the downturn was almost easier for some manufacturers compared to just accepting these changes to their industry.

“I can honestly say I never expected sales to drop by 70 percent,” says Roberts. “I have been in the industry 28 years and from 1985 until 2007 we built as fast as space and crew would allow.”

Throughout this stretch in the industry, the National Houseboat Expo has continued to help bring manufacturers and potential buyers together for its annual show. Some manufacturers credit this houseboat-specific show as a big reason why business is improving once again.

“The 2013 Houseboat Expo was great for prospects,” says Heinen. “I was very happy to see so many boats in the show this year, which attracted more customers. While I prefer this to be a new boat-only show, having some late model houseboats helped the venue grow.”

Adds Roberts, “We sold a couple of brokered boats and we also sold a new boat that we started construction on in July.”  

Stardust is another manufacturer who found success at the Expo and agrees that adding more houseboats was the best way to help jump start custom orders.

“The June Expo was successful for Stardust, in that we closed two boat orders during or as a result of the show,” says Aff. “The addition of recent model used boats was also good for the show, as the higher prices of the used boats was advantageous for the sale of new construction.”

So what are some of those secrets to keeping your houseboat facility open while other builders are closing up shop? For a lot of these manufacturers it was all about getting lean when times were tough.

“To survive we have had to become very lean in our factory and ‘right-size’ our labor force at SkipperLiner,” says Smith. “We have also taken steps to improve our manufacturing costs, reduce procurement costs and mechanize some of our manufacturing processes.”

For Destination Yachts, controlling their labor costs was also the key to keeping thier doors open.

“Low overhead is important to staying in business and because we use a lot of outsourcing in the Amish community, we were able to order less work to be done until things picked up.”   

Adds Roberts at Sunstar, “We also have done more remodels and service, as well as large boat transportation. We now have the equipment to haul up to a 130-foot houseboat, which not everyone has that capability. Also in May 2012 we started Sunstar Yacht Sales & Brokerage, which has allowed us to list and sell several used boats. Since we are now brokering used boats, we can offer repairs, upgrades and transportation for those boats we broker.”

As we continue to see growing interest once again in new houseboat sales as consumer confidence in the economy continues to rise, this is not only good news for the manufacturers, but for those interested in having a custom-built houseboat made as well as those in the market for a used houseboat.  

New designs, latest trends and the development of high-tech and sophisticated electronics and great features will continue to be the driving force as consumers seek to recreate all the comforts of home on their houseboat.

“We expect new boat sales to increase by at least 20 percent in 2014 over 2013 as the economy returns and we see younger buyers enter the new boat market,” says Aff. “Our new construction techniques that we employ have been our best sales tool.”  

Adds Goettl, “While our Bravada Yachts line has carried us throughout the toughest years, our new AXIOM Yachts line has far exceeded our expectations in sales. Since we introduced it to the market just a few months ago, we have already doubled our first year sales projections.”

At one time or another, virtually all of us have faced adversity so profound we wonder if it can be surmounted. The challenges rise before us like a soaring, steep mountain with no apparent way to pass. Because of the struggles we have all faced together in this industry over the last few years, we are now able to rise to new heights that would have been unattainable without this experience.  

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 bounce back once again. 

 

 

[Pull Quote] “Because of the struggles we have all faced together in this industry, we are now able to rise to new heights that would have been unattainable without this experience.”  

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