Boating industry is making waves
Boating is big in Tennessee, and in East Tennessee especially. It’s not just big fun; it’s big money.
In March, the GEICO Bassmaster Classic – known as the “Super Bowl of Bass Fishing” – was held in Knoxville for the first time. The event, which used the Tennessee River and connected waterways, drew a record 150,000 fans.
Not just for fishing anymore
“The No. 1 activity that boats are used for is fishing,” said Thom Dammrich, president of the National Marine Manufacturers Association. “Probably 70% of all boats are used for fishing, if not exclusively at least some of the time.”
But boating today goes far beyond bass boats. While most are still used for fishing, the trend is toward dayboats – larger, more comfortable recreational models, but not necessarily with cabins for sleeping, Dammrich said.
“Basically, boats are becoming more versatile, so you can do more things,” Dammrich said. “It’s versatility that the consumer’s really been looking for.”
Nearly a quarter-million boats are registered in Tennessee, one for about every 27 people in the state, according to NMMA.
Within Tennessee’s 2nd Congressional District, which includes Knoxville, 96 boating-related businesses employ 1,965 people and support 745 indirect jobs, for a total annual economic impact of $711 million, the trade group figures. Statewide, 663 boating- related businesses have nearly $6 billion in annual economic impact, including 13,000 direct jobs and nearly 7,000 indirect jobs.
Who’s building boats in Tennessee?
American boatmakers tend to cluster in Florida, the Carolinas, the Great Lakes states, Washington state – and East Tennessee, Dammrich said.
The top name in East Tennessee boatbuilding is probably Sea Ray, now in its 60th year. The company built its Tellico factory in 1985 – a year before Brunswick Corp. bought the brand, said Ritch Ragle, Sea Ray director of North American sales and customer service.
In 2017, in light of declining sales for some models, Brunswick – which owns multiple boat brands – mulled selling Sea Ray. It opted to keep the company while changing its focus, closing its sport yacht factory in Florida but keeping the Tellico plant.
“We build our sport boats as well as our cruisers here in East Tennessee,” Ragle said.
Now Sea Ray is putting “significant capital investment” into Tennessee – the company also has a factory in Greeneville, distribution center in Dandridge and corporate office in Knoxville, he said – and is hiring at all levels.
Ragle wouldn’t say how many boats Sea Ray makes, but said the company is the world’s top manufacturer of recreational fiberglass boats from 19 to 40 feet long. In East Tennessee, that means 17% of the market, he said.
MasterCraft Boat Co., which started in Maryville in 1968, makes wakesurfing, wakeboard and ski boats. Its Vonore factory employs more than 400.
HCB Center Console Yachts is in Vonore “because of Master Craft,” said Mike Yobe, HCB vice president of product strategy – Master Craft used to own HCB when it was known as Hydrosports Custom Boats. Now it’s privately held by two individuals, and Yobe rebranded the company to emphasize its main products, he said.
HCB’s 120 local employees make fewer than 60 boats a year, all customized; they can take 6 to 9 months each, Yobe said.
“It’s like building a custom home,” he said. “Our smallest boat is a 39-footer, and retail starts at around $725,000. Our largest boat is a 65-footer, and that boat starts at roughly $3.9 million.”
HCB also makes 42-foot and 53-foot models; all of its boats are used mostly in saltwater, Yobe said.
That personal service can include buyer visits to the factory, and a captain accompanying the final product for up to a week after delivery, Yobe said. The company sends its yachts by truck to the coast; HCB has six “Annex” locations from New York to Texas, plus one on the Great Lakes, but it delivers yachts all over the world, he said.
There are many other manufacturers with an East Tennessee presence: Skier’s Choice in Maryville makes Moomba and Supra brand performance boats, and Yamaha Jet Boat Manufacturing USA is in Vonore. Sailabration Houseboats builds in Powell.
Malibu Boats employs 1,800
Malibu Boats, which has existed for 35 years, moved its headquarters to Loudon in 1989, said Chip Smith, Malibu vice president of marketing.
“We’re actually a major player in the industry,” he said. “A lot of people don’t know we’re here.”
The company has 1,800 employees, of which 630 are in the Knoxville area, Smith said.
“This is the facility for Malibu and Axis. We are the market leader worldwide in tow boats,” said Eric Bondy, Malibu’s vice president of sales. The company makes more than 4,000 boats a year, selling them mostly in the U.S. but shipping to 80 other countries.
The company makes both brands, plus Cobalt and Pursuit, at several factories elsewhere, Smith said.
Bryant Boats has been in Sweetwater since 1990, and employs about 75, making 20-foot to 27-foot runabouts and surf boats, Vice President of Sales and Marketing Robin Brendle said. Floridabased Correct Craft, which owns several other boat and engine companies, bought Bryant two years ago, he said.
“We build some of their products here in our plant as well,” Brendle said. One is the Ski Nautique brand of tournament ski boat.
“One thing that makes Bryant a little bit different than some of the other boatbuilders is we consider ourselves a boutique boatbuilder,” he said. It’s a small factory, where most of the boats are custom-built by hand.
“Our boats are 100% wood-free. There is absolutely no wood in a Bryant boat,” Brendle said. “We use all composite materials to replace the wood.”
Dammrich said the Tennessee River and its associated waterways probably drew the first manufacturers.
“The people who started these companies were boaters, probably, in Tennessee,” Dammrich said. Once factories were here, suppliers followed, and a skilled workforce developed, he said.
The East Tennessee boat-building industry took off when C.N. Ray, founder of Sea Ray, moved his company from Michigan to this area, Yobe said. The logistics of shipping boats nationwide made the move sensible, and Ray also wanted to be close to Kentucky’s horsebreeding area, according to Yobe.
“This area’s been the hotbed for boatbuilding for a long, long time,” he said.
Tennessee Valley Authority, which has managed the Tennessee River and its tributaries since 1934, created vast water-recreation facilities; in addition to the rivers themselves, TVA has 33 reservoirs in Tennessee behind its dams. The agency operates 24 boat ramps in the state, mostly in East Tennessee, and also permits owners of waterfront property to build docks on TVA-managed waterways.
Tennessee offers a good environment for boatbuilders, Brendle said – not just TVA’s network of reservoirs for boaters, but a good workforce and low corporate taxes.
“You’ve got great distribution because you’ve got I-75 going north and south, and I-40 going east and west, so you can deliver boats anywhere in the country pretty easily,” he said.
Strongest market since 2008
Dave Curmi, general manager of boat retailer Travis Marine – at 9312 Tedford Lane on Fort Loudoun Lake – said he hasn’t seen a market this strong since at least 2008. That’s due to low unemployment, high consumer confidence, and easy borrowing, he said.
Last year 276,000 new powerboats were sold in the U.S., up 4% from 2017, NMMA reported. That’s the most in 11 years.
“This is our eighth consecutive year of growth. It’s probably one of the best periods of growth that the industry has ever seen,” Dammrich said. He expects another 2% growth this year.
Total spending on boats, engines, trailers and related items hit an all-time high of $42 billion in 2018, according to NMMA.
“The industry does its best when the economy is growing at 3% or more, but it’s still doing OK if the economy is growing at 2% to 3%,” Dammrich said. “Consumer confidence and new boats sales are correlated so closely that the impact is felt almost immediately.”
Though sales may wax and wane for other boatbuilders, the people who buy HCB’s yachts aren’t affected much by economic ups and downs, Yobe said. The factory is booked solid through December, he said. Today’s high-end new-boat buyer spends an average of $95,000, Curmi said. Pontoon boats, which used to be around $20,000, now run twice that, he said. Most of the increase is in engine prices, but the trade-off is engines that are much more reliable and efficient, and need little maintenance, Curmi said.
All of Sea Ray’s sales are through independent dealerships, which “do a significant amount of financing,” Ragle said. Today’s boat loans can stretch over 15 or 20 years, making “just about any boat affordable,” he said.
While boats can be huge and expensive, the vast majority can fit on a car’s tow-trailer, and nearly two-thirds of their owners have household incomes below $100,000, NMMA figures.
Rentals, shared use gain traction
Not everyone has to buy, at least not at first. The short-term rental idea has come to watersports with GetMyBoat, through apps available for Apple and Android.
Around since 2013, GetMyBoat has listings worldwide, including 134 in Tennessee and 11 now in Knoxville, according to Val Streif, GetMyBoat head of marketing.
Boat owners can cover storage and maintenance costs by renting their boats part-time, she said via email. The company handles rentals for fishing, watersports, cruising and other uses.
“We also want to help marinas and boat clubs reach more potential customers who may not want to sign up for a membership but rather just rent what they want when they want it,” Streif said.
Listing on GetMyBoat is free; the company charges a 7% service fee on each reservation. The hand-off location is coordinated between owner and renter, she said.
Sea Ray, too, is getting into shared use. Its parent company Brunswick just bought Freedom Boat Club, which lets 20,000 club members use 2,200 boats around the U.S., Canada and Europe. Freedom Boat Club has two locations in Nashville and one in Knoxville, according to its website.
Bondy believes the industry will keep growing as more people are attracted to boating.
“We’ve grown our workforce in Loudon here dramatically to meet demand,” he said.
Malibu’s latest quarterly financial results show sales of $199.9 million – up 42.4% from the same quarter of the previous year.
What do today’s boaters want?
Travis Marine carries three lines of boats, Curmi said.
“We’ve dabbled in a lot of different brands,” he said. Today Travis sells Cobalt, which makes surf- and wake-sport boats and larger “weekender” family cruisers; Coach pontoon boats, a recent addition; and Supreme wakeboard sport boats, Curmi said.
None are made in East Tennessee, though Loudon-based Malibu Boats now owns Cobalt.
Wake surfing has exploded as a sport over the past decade, Bondy said.
“It’s so popular because it’s relatively easy to do,” he said. “We see 4-yearolds, we see dogs, we see 85-year-olds.”
Wake surfers move about 10 mph, a third of the speed of traditional waterskiing, Smith said.
“So when you fall off, it just doesn’t hurt,” he said.
Traditionally, center-console boats such as HCB made were purely functional, for deep-water fishing: all white and plain, with minimal amenities, Yobe said.
But HCB noticed people were using them more for travel and general pleasure cruising, so the company began offering different colors and textures, with appliances and other comfort features.
“Our cabins have at least a full-size, up to a queen-size bed in them,” he said.
Probably half of the boats HCB makes now have an extra seat where a livewell for fish used to go, Yobe said.
Sales of larger, more expensive boats are accelerating, as people want more room and more amenities on deck, Ragle said. The move is toward watersports and luxury cruising, away from just fishing, he said.
“Just a few years ago, a 35-foot dayboat didn’t exist. Now we build a 35- and a 40-foot dayboat,” Ragle said.
As younger people become boat-buyers, they are expecting the same hightech features they’re used to elsewhere, Ragle said: remote monitoring, video screens, and joystick operation.
Source: Knoxville News Sentinel
The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org
Published May 31, 2019