The showroom at Custom Boat and Marine in South Reno has seen a steady stream of new and repeat customers during the pandemic.
Courtesy Photo
Last July, if you had walked by Custom Boat and Marine in South Reno, you may have thought the dealership was at the tail end of a liquidation sale.
“I had four or five boats in stock, I was out of lifejackets,” Ryan Glover, general manager of the dealership, said in an interview with the NNBW. “It looked like we had the most successful going-out-of-business sale in the history of going-out-of-business sales.”
But the business was hardly sinking. In fact, the dealership saw such a flood of buyers come out of quarantine that it could not keep up with the demand.
“Customers were buying boats that were yet to be built and taking delivery of them whenever they happen to show up,” Glover said. “The parts supply chain has been somewhat disrupted with the manufacturers, and the demand across the country has picked up.”
Picked up, indeed. Many families in Northern Nevada and beyond have shunned airlines, hotels, cruises and other crowded vacation options throughout the pandemic.
Instead, they have opted for more personal transportation choices that make it easier to fend off the coronavirus, whether it is recreational vehicles, bicycles or in this case, boats.
“The families that had a Disneyland vacation planned or had a 10-, 15-, 20-thousand dollar vacation that had to get canceled, they rolled that into the cost of a new boat,” Glover said. “And they enjoyed that boat all summer long versus one to 10 days.”
And the stream of new and repeat customers has been steady ever since. In fact, despite a two-month slowdown after the state shut down last spring, Custom Boat and Marine saw a 12%-to-15% increase in revenue in 2020 compared to 2019, Glover said.
“It was a pleasant surprise,” he continued. “But as the season was kind of going along, it started making sense. People couldn’t do anything except go hiking, camping and boating. And most of our customers are a little more affluent; our demographic are the people that weren’t affected financially as much by the pandemic.”
The same could be said by just about every boat dealer across the country. Since March 2020, a reservoir of consumer spending on boats formed among households flush with cash amid COVID.
As a result, U.S. boat sales reached a 13-year high in 2020, according to the National Marine Manufacturers Association (NMMA). All told, in 2020, unit sales of new powerboats in the U.S. rose 12% and sales of boats, marine products and services increased 9% in 2019, reaching an estimated $47 billion, per the NMMA.
At Marine Specialties in Sparks, the demand outweighed the supply so much last year that, in August, the dealership’s showroom and shelves were completely empty, said owner Jim Canepa.
“We saw a lot of new people that weren’t expecting to be into boating or get boats, but they didn’t have another option,” Canepa said. “People realized that outdoor activities were a safe place to be, they were good for the family, and they were a way to get out of the house and explore.”
Canepa said Marine Specialties’ revenue could have been “significantly higher” in 2020 if it had more boats to sell, but it ended the year mirroring its 2019 sales.
“That was mainly the lack of inventory — we couldn’t get anything to sell to people,” he said. “I think, for the most part, everything on the recreational side was moving quickly; much faster than most people anticipated, and definitely much faster than the supply chain to keep up with.”
POWERSPORTS PLAY
He’s right. Like the boating industry, the powersports industry also shifted into high gear due to COVID, with sales booming for motorcycles, ATVs, and side-by-sides. In all, new-model powersports sales increased about 18% in 2020, according to the Motorcycle Industry Retail Sales Report.
“I think a lot of it is driven by everybody being tired of sitting on a couch,” said John Giambastiani, general sales manager at Michael’s Reno Powersports in South Reno. “There’s only so much Netflix one can watch before they want to climb out of their skin and go out and play. And going into the great outdoors is a great way to do it.”
As a result of people finding a cure for cabin fever, Michael’s Reno sold about 15% more machines in 2020 compared to 2019, Giambastiani said. Business peaked last May, when the shop sold 355 machines — 200 more than it did the same month in 2019.
“I think the stimulus money helped a little bit,” he said. “People decided to go out and make that purchase that they’ve been wanting to do for a long time but we’re timid about doing it. They weren’t going to the movies, they weren’t going bowling, they weren’t going out to dinner as much, and all of those monies were collecting in their account.”
But as more and more buyers rolled into powersports dealerships across the U.S., manufacturers were stuck playing catch-up.
“Inventory levels are being crushed by manufacturing,” Giambastiani said. “Manufacturers have cut our orders multiple times throughout the year, just because they cannot supply the product that we need to satisfy the demand that we have right now.”
As Northern Nevada continues to grow, fueled by new companies and Californians migrating to Reno-Sparks, Michael’s Reno is seeing more new buyers than ever, Giambastiani said.
And since many move to the region because of the outdoor recreation, it’s a trend he doesn’t expect to slow down.
“The industry standard is usually 60% repeat customers and 40% new,” Giambastiani said. “We’re probably going to see about 70% of our business as new buyers and the other 30% is going to be repeat (customers), because there’s that many new people in Reno. It’s crazy.”
Back at Custom Boat and Marine, the dealership is seeing more customers, old and new, than usual during the first quarter of the year, Glover said.
“I think some people that may have missed out last year are shopping a little earlier this year to take advantage while we’ve got products in stock and they have something to choose from,” Glover said. “Whereas, people that are going to start looking for a boat in June may not have a whole lot of choices or may have to wait throughout the summer before they can get something.
“I think buyers got a little wise to what happened last year.”
