Know Your Market: the Past, Present and FuturePublished on June 28, 2019
Knowing your market has three basic components – where you have been, what is current and where is it moving to for the future.
Where you have been is certainly the easiest of the three. There is clearly value in taking some time to look back at what things were like in the past, both recent and longer term. How have things changed? How are they the same? Are there things that have fallen through the cracks? Who were your best customers last year? How about 10 years ago? Are there common denominators? The better we know the past the better we can understand where we are and where things might be heading.
What’s current should be obvious, though it seems we often get so caught up in the day to day that we don’t stop, look and listen. Stopping might actually be the hardest part. There are always too many things to do, so how can we stop to read an article, to go to a boat show or conference? But these kinds of “breaks” are important, and so is stopping and looking at what’s happening at your own facility and in your own “neighborhood.”
And above all is the importance of stopping to talk to your customers – really talk to your customers and LISTEN to what they are saying and get THEIR impressions of the facility. It’s one of the best ways to adjust the big picture to your part of the world, and infinitely helpful as you look to interpret where your market may be heading in the future.
So what’s happening in the big picture? There are numerous trade magazines that suggest new boat sales are up and boat chartering is growing at a rapid pace. And while generically on a global scale that may be true, the devil is always in the details, and it may or may not be true for you. For example, it’s not unusual to see an article about boat sales being up, but in the same issue there are stories of brands or dealers going out of business. Other articles say units are down, but at the same time some lines are sold out. My takeaway is that overall sales have been improving but are still a bit mixed.
With respect to chartering, it certainly appears as though megayacht and superyacht chartering is up, but the big dollars associated with it tend to skew the overall boating statistics to look better than they otherwise might be. And since chartering megayachts and superyachts is not realistic for most facilities in most places, one needs to be sure to look at what the market looks like for your particular location.
That’s not to say that chartering or various rental/shared ownership options might not be a viable and growing market where you are, just be sure to do your homework. In fact, today boaters have more choices than ever as to what types of boating they would like to participate in, what they perceive as a desirable boating experience, what the other demands on their time are and how much can actually be allocated to boating.
Taking a real assessment of your location is always a good place to start. The type of boating that has and can take place in your area and surrounding water bodies is critical to a meaningful assessment. You might be surprised at the number of facilities in shallow water that have asked us for megayacht designs. The fact that they do not have enough depth on a sustainable basis (even including dredging) has not entered their thinking. Add to the mix things like the surrounding demographics, are you a point of destination for transients – short term or long, are you a seasonal or year-round venue, what is the competition? While the list can become long, these types of simple questions start to build up a realistic evaluation of where you are and potentially the path for tomorrow.
The truth is that every site has its attributes and challenges (a euphemism for problems). We are big believers in capitalizing on a site’s attributes, such as deep water, safe protected harbor, great fishing grounds or whatever. We also believe that once a site’s challenges are recognized, in most cases they can be turned around to meaningful approaches, such as providing covered slips for smaller shallower draft boats in shallow water.
When I hear that boater demographics are aging, I agree that this is something to take note of (and something I have also written about), but it is not necessarily a reason to panic. There are, in fact, any number of expanding niches, as well as signs that there is more disposable income being made available for boat purchases or rentals. That may not filter to all markets, but look, for example, at the inland lake and river markets, where the pontoon market is expanding rapidly. They are great for shallow water (and some would say the relatively inexperienced boater), and while they were once thought of as nothing more than a cheap party raft (nothing against cheap party rafts!), they include increasingly expensive vessels with a wide range of capabilities.
And what surprised me most during a recent series of inland marina visits was the number of young kids (preteen to college) out on their family pontoon boats enjoying all sorts of water activities from tubing to wake boarding to numerous other variations. Those party barges clearly have evolved, and it’s not too hard to draw a line from these increased sales and uses of pontoon boats to the current apparent boom in sales of specialty wake/waterski and similar boats. In fact, these specialty boats had sold out productions in most countries last year – and they are not inexpensive!
Another niche showing promise in good sailing areas has been catamarans, with both sales and chartering increasing, especially in the warm climate destination markets. Pontoon boat manufacturers also seem to be increasingly testing the saltwater, with new lines and models designed to handle this very different environment.
These various bright spots together with the signs of increased consumer spending do seem to be making their way to the docks, with the overall word I’ve been getting from most places this year, whether urban, suburban or rural, is that boat slip occupancy has increased in most categories, with the possible exception of the former sweet spot for 28- to 38-foot boats.
So the secret in seeking to know your market and where it is going is to really analyze your position within the area of the facility. What makes your facility different? Why should they come (other than your charming personality)? Why should they stay?
Years ago it seems that the market trends would change gradually, and some would even say sluggishly. Today, the markets are moving at warp speeds, in part spurred by the electronic age – internet, social media and television. That can make it hard to keep up, particularly with your infrastructure, so as you consider changes or improvements to your facility, particularly your dock layout, it is becoming more important than ever to seek designs that provide the greatest flexibility.
Boaters old and young are also becoming more demanding, especially the young. They do not want to hear that things are not working, and off they go onto the next thing.
The reality is that customers do have options and are exercising them in ways not previously seen. Most are willing to pay the cost of the experience if they believe that they are receiving value for the expenditures. A successful future is predicated upon understanding that and seeking to satisfy those desires, which today are demands. In reality, there are niches and hotspots out there for various types of boating from paddleboards to megayachts. Knowing your market is to recognize how your facility, with its particular attributes and challenges, best fits into your corner of the boating universe!
Dan Natchez is president of DANIEL S. NATCHEZ and ASSOCIATES Inc., a leading international environmental waterfront design consulting company specializing in the design of marinas and marina resorts throughout the world. He invites your comments and inquiries by phone at 914/698-5678, by fax at 914/698-7321, by email at firstname.lastname@example.org.