Richard Ressler wishes he were in the market for a new boat.
The New Holland, Pa., man visited the Baltimore Boat Show yesterday to check out the newest models and to get a feel for prices. But after months of hearing about weakening housing values, declining stocks and soaring fuel prices, Ressler said all he could afford to do was window-shop.
FOR THE RECORD - An article on the front page of yesterday's editions of The Sun gave incorrect information about declining boat sales. Maryland boat registrations fell 1 percent last year.
The Sun regrets the error.
"Gas prices," said Ressler, who said he'll just hang on to the boat he has for now. "That's probably the biggest problem."
Recession fears are making it even more challenging to persuade jittery consumers to spend $50,000 or more on a boat. And as the annual boat show opened to the public at the Baltimore Convention Center yesterday, retailers acknowledged that their industry is hurting. And many manufacturers are offering steep discounts in this buyers' market.
"We're down a little," said Paul Morris, the general manager of Full Tilt Marine Inc. in Grasonville, who is altering his sales pitch by telling potential customers that things aren't as dire as they seem.
Boat sales have slumped the past two years, according to the Chicago-based National Marine Manufacturers Association, and industry leaders have weak expectations for 2008 as well. Americans pulled back on luxury items during the past year, including clothing and jewelry, as credit concerns reverberated throughout the economy.
And because maintaining and fueling a boat can be pricey, many water lovers have more costs to consider than just affording a new vessel.
"The [boating] industry is hoping sales in '08 will be flat or slightly down, given the economy," said Ellen Hopkins, spokeswoman for the industry association. "There probably won't be a turnaround until 2009."
Powerboat sales, which are considered the industry barometer, fell 5 percent in 2006 from a year earlier, according to the trade group. Consumers purchased 219,000 powerboats that year for $9.6 billion. The association estimates that sales fell an additional 7 percent last year, based on preliminary numbers.
Locally, the trend is emerging as well: Boating registrations in Maryland declined 7 percent last year to 211,440 compared with 2006, according to the Department of Natural Resources. That number includes powerboats, sailboats and personal watercraft.
Baltimore Boat Show organizers expect 25,000 to 30,000 people to attend the event, which runs through Sunday.
The show is shorter than in the past - five days instead of nine. Organizers said they offered fewer days so they could expand the number of boats on display by renting the entire convention floor. Retailers are showcasing 750 boats, including sailboats for the first time. Prices range from a $300 kayak to a 50-foot Rinker yacht for $1 million.
Attendance was down last year, organizers said, so they hope the changes will spur more business.
Unlike auto shows, customers can buy a boat on the spot from a dealer or broker, with financing and insurance. Area dealers say they typically make more than a third of their annual sales the week of the boat show, and they hope to do the same this year, despite the economic worries.
Retailers are offering deep discounts and low-interest loans in hopes of coaxing buyers to spend. Among the offers this week: 2.9 percent financing and up to $5,700 worth of cash discounts or accessories toward a sale.
"We really think it's going to do us wonders all week," said David Baumgartner, president of family owned Riverside Marine Inc., which has 10,000 square feet of exhibit space and 32 boats on display. The company has four locations in Maryland.
With more than 30 years in the business, the Baumgartners have enjoyed strong markets and weathered weak ones. David Baumgartner said he sold several boats the weekend before the show, which gives him hope.
Paul Matrangola, sales manager for Tidewater Marina in Havre de Grace and Annapolis, said his company advertised before the show and invited buyers to check out its Hunter and Catalina brand sailboats ranging from about $87,000 for a 31-foot sailboat to $400,000 for a 39-footer.
"It's off a bit, but we had a strong fall," Matrangola said. "We're optimistic."
It's clearly a buyers' market, said Ken Hertel of Ellicott City. He is looking to buy a Rinker 280 Express Cruiser retailing for $73,000 - if he can convince his wife.
"Right now, there are quite a few deals," Hertel said. "And with interest rates coming down, now is the perfect time."
Kevin Ralston of Dundalk said the economy hasn't deterred him from buying his first boat, but it will play a big part in what he buys.
"I've been going between a cigarette boat and a fishing boat," Ralston said yesterday, after climbing down from a new 20-foot Pro-Line Express retailing for $39,900. "This is far more economical."
Most buyers these days are like Ralston, said A.J. Bowden, sales manager and partner in Jaws Marine in Curtis Bay, who is selling the boat Ralston is considering.
"People are still buying boats, especially fishing boats," Bowden said. "People are just going to size down."
Despite the optimism among dealers, industry analysts say there just aren't enough consumers buying boats these days.
Edward Aaron, an analyst with RBC Capital Markets in Denver, said in a recent report that the boating industry is on track to sell the fewest units since 1965. At the New York boat show two weeks ago, Aaron noted that bigger, more expensive boats sold well, as did the least expensive ones. He said manufacturers pushed promotions to sell off high levels of inventory.
Baltimore Boat Show manager Michael Duffy, who serves as regional manager of boat shows for the marine manufacturers trade group, said sales figures tend to ride a five-year cycle, and he expects an upturn soon. While attendance in 2007 was lower than expected, he said, new attractions such as the sailboats should attract buyers this year.
"Boaters are boaters," he said. "They love their sport."