Sales increases in practically all market segments
Following a very successful boot Düsseldorf 2017 and good business after the trade fair, the water sports industry in Germany started the water sports season with great optimism. The high expectations have been fulfilled. The water sports industry anticipates record sales of maritime goods and services amounting to more than EUR 2 billion in 2017.
The water sports industry is booming. This is how the results of the economic survey carried out by the Association of the German Water Sports Industry in mid-2017 could be summarised. 86.6% of the companies polled report that the current business situation is as good as or better than in the previous year. This is the highest percentage since the financial and economic crisis in 2008/2009.
A definite uptrend is apparent at the international level too. The eurozone has now recorded economic growth for the 5th year in succession. The upswing has gained considerable momentum as well. All of the five largest economies in the eurozone (Germany, France, Italy, Spain and the Netherlands) are growing. Only Italy still lags behind somewhat, with economic growth of about 1%. The EU Commission is expecting economic growth (GDP) of 1.9% for the eurozone as a whole in 2017.
The maritime industry in Europe is benefitting from the improvement in the general economic situation too. Confidence in a positive development of the economy is continuing to grow and is stimulating private consumption.
The maritime industry in Germany is also developing at the same pace as the economy in general. In view of the sound economic situation, the German government has increased its growth forecast for 2017 from 1.5% to 1.2% and for the coming year to 1.9% from 1.6%. Consumers remain just as keen to buy. The income increases that consumers are expecting due to the good economic situation are likely to continue strengthening domestic demand and are unlikely to be added to private savings much because interest rates continue to be low.
Positive trend in all areas of the market
It is particularly positive that all segments of the industry are benefitting from the ongoing uptrend – even though the extent to which they are doing this varies. “Service & maintenance” continues to lead the way. None of the companies polled reported sales shortfalls over the previous year: 100% satisfaction – it doesn’t get any better than that! The number of boat owners who prefer to have their precious possession maintained by a professional firm rather than doing the work themselves has been on the increase for years now.
There is, however, also a downside to the success in this area of the market. Many companies are working to full capacity in the meantime. This leads to bottlenecks during the season and has an adverse impact on customer satisfaction. Urgently needed additional technical personnel is in short supply, on the other hand.
Most of the players by far in the other market segments are very happy too. The “Equipment & accessories” sector recorded substantial growth over the previous year once again. On average, 90% of the companies are positive about the current economic situation in this segment. One major reason for the positive development is the comparatively high average age of boat owners (61). As they get older, they spend more time on their yachts and maintain high standards on board where equipment that increases comfort and safety is concerned. This explains why demand for such high-quality accessories as heating, refrigeration and cooking appliances as well as multimedia systems is so strong.
An additional factor is that existing yachts are being used longer. Regular investments in the maintenance of yacht value are therefore required. Sales and profits are not, however, growing at the same pace in the equipment field. Competitive pressure is increasing substantially. Sales are also shifting more and more to online channels. This necessitates new business strategies in an industry that focussed for a long time to a very large extent on offline sales channels.
The “boat chartering/boat rental” sector is continuing to grow too. It is particularly true of younger customer groups that use is more important than ownership. They are more interested in enjoying leisure activities than in having their own yacht. This is stimulating rental business. Companies are reporting sales growth of between 5 and 8% in the yacht chartering field at both domestic and foreign destinations.
Some destinations are experiencing sales shortfalls too, however, such as Turkey, which is registering substantial decreases in business for political reasons, or the Caribbean, where Hurricane Irma left a trail of destruction in the marinas too. It cannot be said with any certainty at the present time how much the booking season in the Caribbean will be affected by this.
The weather has considerable impact on bookings in Germany too, however. Whereas a poor summer is not generally felt until the following year in the yachting sector, the effects are immediate in the canoeing sector. Floods and heavy rainfall – frequently at weekends of all times – during a summer that was underwhelming anyway led to sales shortfalls in this segment at least at the regional level.
Traditional boat and yacht rental is likely to become more diverse in the coming years. This is due to customers’ increasingly exacting demands for greater flexibility where both timing and geography are concerned. “Fractional ownership” is the motto here. In this concept, the buyer acquires a (small) proportion of a yacht (the right to use it for a certain amount of time), but is at the same time entitled to use other, comparable yachts at many different locations on the basis of his fractional ownership. This is not a new idea and has, for example, been standard practice with private aircraft for a long time now. A number of companies, including shipyards, are starting to consider and implement this concept in the boating field.
Growth in sales of new boats
The manufacturers are expecting considerable sales growth in the new boat segment. This development is the result of the ongoing trend towards larger yachts. Demand for sailing catamarans is continuing to grow too.
The two leading German boat manufacturers Bavaria and HanseGroup are of course following this trend as well. Whereas Bavaria took over Nautitech as long ago as 2014, the investment company Aurelius – HanseGroup’s parent – has now acquired the French catamaran manufacturer Privilège.
All in all, it can be said that the restructuring measures needed as a result of the international financial and economic crisis in 2008/2009 have been completed in the meantime. The two leading German yacht manufacturers have adapted to the changes in the market environment and are recording growth. The HanseGroup, for example, reported a sales increase of 12% to almost EUR 129 million and a profit for the first time in 8 years for the 2016/17 financial year.
The large number of new products, which have already been presented by the German and international shipyards for the 2018 season or will be launched at boot Düsseldorf in January, are further confirmation of the good market environment.
The trend towards larger yachts is apparent in the motor yacht sector too. In contrast to the sailing boat segment, however, demand here is also growing for smaller boats equipped with outboard motors that can be pulled on a trailer. Many buyers are finding the combination of lower upkeep costs and higher flexibility to be a convincing argument. This trend is confirmed by the boat motor statistics compiled by the Association. In the power range above 60 horsepower, sales of outboard motors increased by 19.6% between 1-6/2016 and 1-6/2017.
The companies definitely expect this positive development to continue. 79.6% of the companies (previous year: 80.6%) think that the maritime economy will be developing better or at least as well in the medium term.
The national campaign to promote recreational boating in Germany with the motto START BOATING has been a help here too. About 2.2 million people have been reached via social networks and provided with information about recreational boating in 2017. Far more have had their attention drawn to recreational boating via regional radio and online channels. The spotlight is being focussed on recreational boating at many different levels of society as a result, so that it is becoming an increasingly trendy alternative among leisure sports. Information alone is not enough, however. This is why the campaign includes an offer to try out recreational boating free of charge at regional boating events. Sailing boats and motor boats between 4 and 10 m long are available for this purpose. In 2017, almost 3,700 people have taken up this offer and experienced the fascination of recreational boating for themselves.
Shortage of good second-hand boats
According to Association calculations, about 18,000 pre-owned boats change hands annually. Well-kept second-hand boats are the preferred option for the roughly 6,000 newcomers to recreational boating each year. Many newcomers would like to try out recreational boating first of all, before they decide to buy a new and thus more expensive boat.
Demand is strong as a result. While boats that are several decades old are generally slow to sell, good second-hand boats find a new owner in no time at all.
Recreational diving
The biggest recreational diving trade fair in the world that is open to the general public is held at boot Düsseldorf and every single square metre available will be booked, as in the previous years. The sector is struggling all the same. The most important recreational diving destination – Egypt – is only recovering slowly and continues to be undependable because of the political situation. Turkey, the coast of which is very suitable for recreational diving, is recording large drops in business too. This means that destinations which have in the past guaranteed steady recreational diving growth are no longer performing well, at least to some extent. This is reflected in sales development, which is at the same level as in the previous year in the recreational diving accessory field. Developments with a strong positive impact cannot be expected at the present time.
Positive outlook
Following a successful water sports season in 2017, the industry is optimistic about the coming season. And it is a fact that there are no signs at present of a weakening of the maritime economy. Positive overall economic conditions and interest rates that remain low guarantee strong private consumption. After all, it is certainly better to invest available funds in a yacht that will maintain its value and to enjoy all the fun that goes with owning it than to spend one’s time in frustration about the lack of interest one’s money is earning.
Cologne, October 2017
Bundesverband Wassersportwirtschaft e.V.
Gunther-Plüschow-Strasse 8
50829 Cologne
Germany
Contact: Jürgen Tracht
Tel.: +49 221 59 57 115
Fax: +49 221 59 57 110
E-mail: tracht@bvww.org
Web: www.bvww.org
www.entdecke-wassersport.de
