Yacht market relies on used sales while manufacturers in Bradenton, Sarasota gear up

MANATEE -- In the aftermath of one of the season's last major boat shows in Southwest Florida, pleasure boat sellers and manufacturers in Manatee and Sarasota counties are predicting a good year in 2015.

Coming off a 2014 with static but steady sales in Florida's boating industry, builders and yacht brokers say demand is ramping up after the Suncoast Boat Show in Sarasota last weekend. Builders, including Chris Craft and Hann Powerboats, have full factory floors with new orders backlogged for weeks.

Brokers say they are doing most of their business in preowned watercraft selling for higher prices than a year ago.

Ed Massey, president of Massey Yacht Sales in Palmetto, said the market is back to pre-Great Recession levels, at least in the used boat market.

"In terms of preowned sales, the recovery is pretty complete," he said.

Florida is the place to be for those involved in the boat industry. According to yacht industry publication Trade Only Today, 19 percent of 30,063 boats sold in the United States last year were sold in Florida. On a dollar basis, boats sold in Florida comprised 46 percent of the value in the U.S. market.

Statewide sales were down, however, by nearly 200 units from 2013. The value of the sales dropped 15 percent to $1.655 billion.

Part of the reason Florida is the top boating industry value producer is size. Darren Plymale, vice president of Anna Maria broker Galati Yacht Sales, said big boats with big price tags sell well in the Sunshine State. Last year, 131 boats more than 80 feet long were sold in Florida, according to Trade Only Today.

"The buyers within our market on the Gulf Coast have demonstrated their interest in yachts over 100 feet-plus," he said.

More typical for boat brokers are sales of craft in the 30- to 50-foot range. Plymale sold about 450 boats in 2014 across its eight locations ranging in price from about $100,000 to several million dollars, while Massey moved about 100.

Plymale said he hopes Galati repeats last year's 10.5-per

cent sales gains in 2015.

Aging vessels dominate tight market

What the boating market isn't seeing right now is much new inventory. Massey, which sells a large inventory of sail boats and a growing pool of power yachts, reported selling prices in 2014 were generally lower than the year before. Ed Massey said few new boats were built during the five years during and just after the recession so pre-owned boats on the market now tend to have been manufactured in the early 2000s.

The silver lining is sellers now tend to get 90 percent to 95 percent of their asking prices, compared with 75 percent to 80 percent during the recession.

"Actually, pricing for fair market value for boats was quite an improvement," he said.

Dan Delrose, an Ellenton dentist, recently put the 39-foot Meridian 391 power yacht he and business partner Richard Steinberg bought new in 2008 on the market. They paid about $390,000 and have listed with Massey at fair market value, $295,000.

Delrose said he believes a strong preowned sales climate will help move the boat for the right price. He said he feels fortunate to have gotten into the market at the right time.

"Because the market had tanked in 2008, we got a deal on a brand-new boat," he said.

The weight toward used boats may not be unbalanced for long.

Russ Hann, president of Whitfield-area boat builder Hann Powerboats, said he scaled up operations this year due to demand. He's added eight employees since the start of the year bringing the company's total workforce to 28.

While his company devotes a fair bit of its production to filling U.S. military contracts for patrol boats, the company's volume of pleasure boat production has exploded. This week, the builder had examples of seven of its boats under construction on its factory floor. The wait time to start a brand new order is six weeks.

Reflecting on this activity and ongoing contract work, Hann expects 2015 sales to be as much as 50 percent more than last year.

"Based on what I'm seeing, I think we're definitely in an up trend," Hann said.

The biggest boat builder in the two-county area, Chris Craft, is also growing. In the past year, it's added about 50 employees to its 350-person workforce. The company is also drawing up plans to add onto its Manatee County production facility.

President Steve Heese said Chris Craft built about 500 boats in 2014 and expects to build even more this year. Order volume is so robust buyers ordering the company's largest boats may have to wait until next February to take delivery.

"Larger and more expensive has challenged our capacity the most," Heese said.

Also pointing to a good sales year in 2015 is the boat show scene. Last weekend's Suncoast Boat Show at Marina Jack's in Sarasota drew 12 percent higher attendance than last year and 7 percent more exhibitors, according to organizers. The show also had its largest yacht on display, the 130-foot Amarula Sun, which is being marketed by Galati.

"All the feedback we received tells us that the consumer is back," said Brett Keating, vice president of marketing for show organizer Show Management.

Brokers including Galati and Massey rely on boat shows and other events to get exposure for their inventory. With Galati carrying an inventory of about 450 boats and Massey 100, industry are one of the best ways to present a sales lineup to a crowd of prospective buyers.

Still, some boats do sell right out of dealer slips. Delrose purchased a brand-new sailboat from Massey a year ago for $189,000.

Ed Massey said he expects his company's appearance at Suncoast to pay off in future sales. More sales will likely come in the fall, when the boat show season starts all over.

Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027, or on Twitter @MattAtBradenton.

This story was originally published April 26, 2015 at 12:00 AM with the headline "Yacht market relies on used sales while manufacturers in Bradenton, Sarasota gear up."