Boat Sales Are Making Waves In Minnesota
Dan Chesky spent about a month preparing and packing 40 boats to bring to the annual Minneapolis Boat Show this month. The co-owner of Dan’s Southside Marine in West Bloomington will spend upwards of $70,000 to display the newest, most innovative models of Premier and Berkshire pontoons, Alumacraft fishing boats, and Suzuki, Yamaha, and Honda outboards. And, he says, it’ll be well worth it.
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In total, Dan’s Southside sells 450 to 500 boats a year at an average sale of $28,000. “About one-third of my annual sales come from the show, but they don’t all come at once,” Chesky says. “By June, July, and August, there are still a few stragglers coming in who say, ‘I saw your boats at the show.’ It’s a great place for someone to go fact-finding. It would take a long time for someone to visit every dealer in the state. You couldn’t do it in a day or two.”
Other boat dealers from Cross Lake to Wayzata and further south share similar stories about the importance of the Jan. 19-22 event. (See “Boat Show Benefits,” page 26.) Statistics bear this out as well: 36 percent of powerboat owners decided to purchase a boat after attending a boat show, according to the National Marine Manufacturers Association (NMMA). This helps explain why more than 200 boat dealers are expected to exhibit this year.
This event, and 20-plus other boat shows taking place across the country this month (including St. Paul’s Sportsmen’s Show), also officially launch the 2017 boating season, even though lakes in these parts are frozen over for at least another three months.
Manufacturers such as Wyoming, Minn.-based pontoon boat-maker Premier Marine, dock and lift provider Clear Lake-based Walks-on-Water and Two Harbors-based Ronning’s Lake Carvings will attract some of the best sales and sales leads they’ll get all year. And these shows fire up boating-related purchasing elsewhere on goods ranging from wake boards to fishing gear.
In fact, January’s boat shows start a slow tsunami in spending. By the time boats are put away this fall, Minnesotans will have propelled at least $5.5 billion into the state’s economy by spending on boating and related accessories to enjoy the land of 10,000 lakes (actually more than 11,000 lakes and 18,000 miles of rivers), according to the NMMA. Such spending supports 676 related businesses that employ 28,791 people.
Water sport boats are designed for a smooth ride and speed to pull people who waterski, wake board or tube, while offering a more compact and limited version of bathroom, sink/bar and other useful areas that are available on cruising boats. This type includes open-bow boats. Prices run from $5,000 for small used boats to more than $200,000, such as for a 2017 29-foot Cobalt.
Cruising boats are good for just that: cruising along with a larger group of people, often with a kitchen/bar/grill onboard. In recent years, cruisers, which are primarily pontoon and house boats, have added speed by increasing the number of motors and horsepower. A pontoon boat today can now keep up with many sport boats.
Fishing boats aren’t what your dad used to have. Most now come with additional components and features, and their average cost is much higher than 40 years ago; some even offer enclosed cabins and sleeping quarters. These, too, have become faster in the last few decades, depending on the size of motors they come with or are added. —F.H.
How it all adds up
Minnesota’s 459,866 powerboat owners spend, on average, $4,000 each year just for the pleasure of relaxing on the water, towing the kids on a tube, or throwing a line overboard in the hope of catching the next walleye, northern, or crappie. (See “The Costs of Ownership,” page 24.) That’s $1.8 billion a year, and it doesn’t include how much they spend on travel, food and beverages, as well as, for some, owning a cabin or lake home.
Then there’s all the boat purchasing, which adds up to about $800 million each year.
All told, 11,000 new boats were sold in Minnesota in 2015 at an average of $34,427 per boat, according to the NMMA. That’s $379 million. Minnesota comes in fourth, behind Florida, Texas, and Michigan, when it comes to new-boat buying activity in the U.S. And for every new powerboat sold nationally, four used powerboats are sold at an average cost of $9,371. Extrapolating that data to Minnesota means 44,000 used boats were sold in the state in 2015 for a total of $412.3 million.
While a good used boat can be purchased for as little as $4,000, new boats typically sell for between $10,000 and $200,000. For example, Dave Briggs, owner of Wayzata Marine, sells more upscale runabouts and sterndrive wave surfers made by Regal, Chris-Craft, Chaparral, and Four Winds. His average sale is a 24-foot boat that costs $75,000 with all the trimmings.
The No. 1 reason for owning a boat in this state is to fish, according to the NMMA. And the activity fuels spending.
The Minnesota Department of Natural Resources issued more than 1.4 million fishing licenses in 2014, the most recent year for which figures are available. On average, each angler spends $1,714 annually on equipment, bait and travel (26 percent, or $446, is spent on rods, reels, lines, and lures each year.) Anglers also spend $41 per person on fishing licenses, magazines, memberships, permits, stamps, and land leasing, according to the U.S. Fish and Wildlife Service.
All of that adds up to about $2.4 billion in economic activity that supports 35,000 jobs here. Only three states had higher angling expenditures. Two were Florida and New York, which have high-population coastal areas. The other was Michigan, which has nearly twice Minnesota’s population and shoreline on four Great Lakes.
Minnesota still ranks second in the nation for fishing participation, according to the DNR. Nearly a third of residents age 16 or older have a fishing license. (Only Alaska has a higher rate, at 40 percent.)
Whether for fishing, cruising or water sports, Minnesota boaters spent a total for $270.4 million on related accessories in 2015, according to NMMA. These accessories include everything from navigation electronics and instruments, marine sound systems, electrical panels, gauges, seating, lighting, and personal flotation devices to boat covers, galley equipment, water sport equipment and a variety of other items a boater might want or need.
Trailers are another big-ticket item for some: In 2015, Minnesota boaters spent nearly $12.4 million on new trailers.
Denise Tetrault, one of four owners of Hallberg Marine in Wyoming, estimates that 50 percent of all powerboats—274,933—are trailered to the lake or river, where they are used and then trailered home and stored in the garage or yard. The other 50 percent are either kept at the dock of a marina, cabin or lake home for the season. At the end of the season, about 25 percent of these boats are just turned over and stored near the dock or hauled into the yard and covered for the winter, while the remaining 75 percent are trailered to a commercial boat storage facility or stored at a marina.
Hallberg Marine is also in the boat storage business, charging boaters between $400 and $1,500, depending on size, to store a boat during the off-season.
For many, docks and boat lifts are another must-have. Jay Miller sells docks and lifts manufactured by Porta-Dock in Dassel. He says the average dock in the state is about 20 feet long and retails for between $5,000 and $7,000. Boat lifts cost another $7,000 to $10,000, and electric lifts can tack on an additional $1,000 on average.
“Most cars will go over 100,000 miles without any issues if you change the oil and rotate the tires. With good care, a dock will also last a long time. Same with a lift. Shorelines that are steep and [with] muddy bottoms will shorten the life of a dock,” notes Miller, who says it is impossible to come up with an average cost of a dock per Minnesota boater these days.
“It used to be that people had one dock and one boat,” Miller notes. “Nowadays, people have a fishing boat, a powerboat, a personal watercraft [such as a Jetski] and a pontoon, so often there is more than one boat at a dock.”
An even smaller percentage of boaters, an estimated 12.5 percent (68,733) rent slips for their boats at marinas. Most of these boats are larger than average.
Not every Minnesota boater likes to spend the day speeding from one bay to another, pulling tuber after tuber or cruising the scenic St. Croix in a yacht that feels more like a house’s great room than a place in nature to escape the 9-to-5 grind.
Boaters who prefer a slower, quieter ride—and there are plenty of them—opt for a sailboat, kayak or canoe to feel the wind in their sails or listen to the slapping of their paddles.
Minnesota had 8,086 registered sailboats in 2015; a new sailboat in Minnesota sells for an average of $34,876, according to NMMA. Make no mistake, though: A 30-foot sailboat (considered small in sailing circles) that’s launched on Lake Superior or Lake Pepin can sell for more than $200,000 new.
Canoes and kayaks are even more popular, with 202,156 of these boats registered in the state in 2015. Due to their long lifespan and robust person-to-person secondhand market, accurate annual sales are impossible to estimate.
And there’s the allure of personal watercraft with motors, such as Jetskis and WaveRunners. More than 48,500 of these fast little machines were registered in Minnesota in 2015, according to NMMA. An estimated 5,000 or more are sold each year in Minnesota at an average cost of $11,204, for a total of at least $56 million in annual sales.
The average lifespan of a four-stroke-engine WaveRunner, if well maintained, is nearly 20 years, according to Tousley Motorsports in White Bear. Tousley says that for every new personal watercraft sold, it sells one used Jetski. —F.H.
Boating Without Owning
Others are willing to pay for the pleasure of not owning a boat. Luke Kujawa’s Your Boat Club rents boats both on a membership and per-outing basis. He has nine locations in the state: one each on the Whitefish chain of lakes in Crosslake, Gull Lake near Brainerd, Lake Minnetonka, Forest Lake, Prior Lake, the St. Croix River in Red Wing and Stillwater, Lake Waconia, and White Bear Lake. “All of the large markets have a handful of companies that rent boats. Gull Lake has a handful. Lake Minnetonka has a handful. The St. Croix River has a handful. On the popular bodies of water, there are multiple options available,” Kujawa says.
Of Kujawa’s fleet of 130 boats, about 35 are in the rental fleet and the rest are available for use by Your Boat Club members. A 24-foot Bennington pontoon is Kujawa’s most common rental, but he also rents ski boats and fishing boats. The average cost to rent a boat is $300 to $400 for a half-day, but cost can range from $100 to $700 depending on time of year and demand. He says his rental fleet is in use 70 percent of the time from May 1 through October 15.
Kujawa’s Your Boat Club has a few options, depending on the size of the boat a member wants to use. “For $6,300 a year, you have unlimited access to $80,000 to $90,000 boats on Minnetonka or the St. Croix River,” Kujawa says. As the boats get smaller, so does the membership fee, which starts at $1,600. The average membership fee among the club’s 800 members is $5,000 a season.
Minnesota is a good place to sell boats, in part because it’s also a great place to make them. Until 2010, the state was home to the largest manufacturer of recreational boats in the United States.
With 12 different companies, Genmar Holdings produced more than 300 models including brands Aquasport, Carver, Crestliner, Glastron, Larson, Logic Marine, Lund, Ranger, Trojan, Wellcraft, Four Winns, Hydra-Sports, Javelin, Lowe, Seaswirl, and Stratos.
Those boats were made at nine manufacturing locations in the United States and Canada, sold by 1,300 dealers in all 50 states and in more than 30 foreign countries. But Genmar went into bankruptcy due to the Great Recession, and a California private equity firm acquired most of the company’s assets and brands.
Remaining Minnesota boat manufacturers include Lund, Alumacraft, Crestliner, and Premier Pontoon. In November, Larson announced it would be closing its Little Falls factory this year. But others are still going strong, especially Premier, which produces about 1,500 boats a year and sells about 20 percent of them in Minnesota, according to president Lori Melbostad.
“The workforce here has a strong work ethic, and there are a lot of good local vendors that we rely on,” she says. “We buy our plywood, aluminum, and 60 percent of our marine furniture from local vendors. We have very strong vendors in the state, which provides a good opportunity for us.”
And of course, there are all the avid boating fans interested in buying the latest and greatest—if not this year, probably next.
Boat Show Benefits
Hallberg Marine has exhibited at the Minneapolis Boat Show nearly every year for the past 30 years. Denise Tetrault, one of four owners of Hallberg Marine, says her firm spends about $35,000 for a booth at the show, exhibiting Bennington, Crest, and Premier pontoons, Alumacraft fishing boats, and Bayliner and Hurricane fiberglass powerboats.
We sell boats that are 21 feet and under and mostly trailerable,” Tetrault says. “We have five showrooms inside our dealership. We try to get people who visit our booth at the boat show to visit our showrooms. For a lot of dealers, their booth at the boat show is their best showroom.” The firm’s goal is to sell 22 boats at the show—double the number of boats they put on exhibit.
C&C Boat Works in Crosslake has shown high-end powerboats—Cobalt and MasterCraft—at the Minneapolis Boat Show since the late 1980s. But owner Brad Nelson exhibits at the show for a much lower cost than many dealers. By dealer agreement, Nelson says only the local dealer of Cobalt boats, which is Hastings’ Erickson Marine, can exhibit at the show.
“[Owner] Jon Erickson and I set up a booth together,” Nelson says. “A lot of dealers from all over the country can’t believe that two dealers can do that.” The average cost of each of the 80 or so new boats Nelson sells each year is $80,000. He estimates that he and Erickson spend $30,000 or $15,000 each to be part of the show, and he doesn’t worry about whether the show nets him any sales.
Despite the cost and inconvenience, Nelson says exhibiting his high-end boats at the show is necessary in what he calls an “extremely competitive” industry.
“In my case, it’s about keeping my name in front of the people who live in Minneapolis-St. Paul and have cabins on the Whitefish Chain, Gull Lake and Bay Lake. We sell the equivalent of Mercedes and Porsches. My customers are not influenced by the ‘You need to buy this today!’ hype. Boat shows are expensive and time-consuming, and they are definitely a pain in the butt. But as long as the boat show exists, it’s important to have your name out there.” —F.H.
Accessories can add thousands of dollars to the cost of boat ownership. The bigger and pricier a boat gets, the more toys the boat owner typically has. Below are some costs for boats 21 feet or less.
The Cost of Ownership
The minimum average yearly expenses of boat ownership and upkeep run about $5,200 ($3,100 if you store your boat at home).
$200+ Insurance costs anywhere from about $200 for a small boat to more than $1,000, depending upon the age, size and condition of a boat.
$500+ Gas for a boater who gets out every weekend and goes a ways will run at least $500 a season. One reason is that most boat engines are not supposed to burn gasoline containing ethanol, so boaters pay more to buy non-ethanol premium available at some gas stations (including, in recent years, some Holiday stations located near boat landings).
$500+ Boating extras aren’t cheap, and they usually need replacing/updating every few years. They range from equipment for fishing, water sports (wakeboards, water-skis, foam pads, water chairs and towables) and entertainment (upgraded sound system). This can run anywhere from $500 to thousands each season.
$700+ Keeping a boat in top running condition—including a properly winterized motor—costs at least $300 a year, and more than $500 every two or three years, when a motor’s gear case and other drivetrain parts need inspection and greasing. This doesn’t include repairs, surface maintenance such as periodic buffing of the gelcoat and fixing scratches, and miscellaneous gear, such as anchors and ropes—all of which add up to at least $400.
$1,200 (average) Boats bigger than 24 feet are usually so heavy and big that an SUV or car can’t tow them; they require a pickup truck or other heavier utility vehicle; there’s also the challenge of unloading and loading the boat on the trailer. Hence thousands of people rent slips for the season. Depending on the body of water and the location of the boat, slip rental costs or docking fees range from $100 to $500 a month or $1,200, on average, for four months.
$2,100 (average) For those who don’t have the space, room and time to figure out how to properly cover a boat to handle heavy loads of snow and fend off field mice, there are places that will shrink-wrap, or plastic-encase the boat for about $1 a foot. Those businesses or other places will then store it—outside or in a building—charging from $100 to $500 a month, or
$2,100 on average for seven months.
Minneapolis Boat Show(this year Jan. 19-22)
2015 attendance: 33,643
Ticket price: $14
Ticket spending: $471,000
Parking, food and beverage, gas, other spending ($30 per person): $1 million
Subtotal: $1.5 million
Total (minus est. 25 percent free tickets, parking and no food): $1.1 million
Sources: Attendance, National Marine Manufacturers Association; ticket price, Minneapolis Boat Show; parking, food and beverage, gas and other, TCB estimates based on attending.
Minneapolis Boat Show (this year Jan. 19-22)
Boat Purchases In 2015, 11,000 new boats were sold in Minnesota for an average of $34,427 per power boat ($379 million). For every new boat, four used boats are purchased for an average of $9,371 ($412 million).
Fran Howard is a regular contributor to Twin Cities Business