Trends and analysis of the recreational boat market.
The recreational boat market has seen steady growth for the last few decades. Over the last 50 years, the average household disposable income has gradually increased all over the world. With more money to spare, expenditure on tourism and other recreational activities has expanded globally.
With increasing interest in cruising and water sports, the recreational boat market has enjoyed a steady amplification. Will this trend continue to grow in the future?
A recently published report by Global Market Insights has predicted that the global recreational boat market will enjoy a compound annual growth rate of 6.2%, going from the current figure reached in 2020 of $16.4 Billion to an exponential increase to $23.6 Billion by the year 2027.
Experts believe that driven by the frustration of staying indoors for a year or so due to the pandemic, people’s love for the outdoors has increased. With more people interested in touring and outdoor activities, demand for cruising, fishing, water sports, and other water-based activities has gone up.
With more people interested in buying their private yachts and boats, and an increase in online marketplaces like www.boatsforsale.co.uk, more money is being spent on the purchase of recreational boats than ever before.
As demand forces the supply chain to expand, the future will see more recreational boats purchased by both private and business buyers.
Steady growth in the past
The steady expansion of the recreational boat industry in the past was closely tied to three factors: cheap and easy transportation, public interest in tourism, and an increase in average disposable income.
With more people venturing out locally and internationally, the hospitality industry grew aggressively all over the world. In the last century, many countries that had low GDP enjoyed an increase in national income as they advertised their land’s natural beauty and attracted tourists from around the globe.
The travel and tourism industry grew, creating more jobs and attracting more investors into the market. Investors started focusing on the hospitality market, due to the increase in demand for rentals, the rentable boat industry also expanded. More boats were made and sold as the popularity of cruise vacations increased.
Sudden limitation leading to unprecedented growth
The year 2020 was the year of the worst pandemic seen by the modern world. With 4.55 million deaths globally, the world is yet to see the end of this. Due to quarantine, travel bans, and threats to public health, people all over the world have been confined to their homes since March 2020.
With lockdowns and bans continuing, the global tourism industry took a massive hit, dropping by 50%. But, how did it affect the recreational boat market?
- During the first few months, the pandemic took hold and people got used to the new normal. Just like many other industries, the recreational boat industry also saw a drop in sales. By May, as the restrictions eased, the market started gaining average momentum.
- As travel bans increased and public transportation became a problem due to fear of transmission, people realized having their boat gives them the freedom to travel the outdoors, covering short distances while enjoying a recreation that has less restriction.
- By June 2020, the US government eased the regulation of recreational marine vessel emissions, and demand for private leisure boats increased. From June to October, the industry enjoyed a growth of 20% to 60%, coming back to normal by the end of 2020.
- Due to the increase in online marketplaces and growth of interest in outdoor activities that can be enjoyed privately while maintaining social distancing, what was once a curse to the recreational boat market became a key reason for rapid growth.
What factors can turn this forecast into reality?
This forecast gives a positive signal to the recreational boat market, but how can it become a reality? Let’s take a look at a few factors that can work for the forecast.
High post-pandemic increase in tourism
The pandemic has transformed the human mindset and given them a sense of carpe diem. With an increasing desire to “seize the day”, the moment the pandemic comes to an end, people who have been afraid to cross the threshold of their homes will get out in search of outdoor adventures.
The travel and tourism industry is bound to see an expansion post-pandemic, which will give rise to an increase in demand for recreational watercraft. The rental boat market, the cruise market, and the recreational fishing industry will all enjoy rapid growth due to the increase in tourism. This in turn will become a crucial factor driving this forecast.
If you walk down a crowded street, asking people whether they know how to drive a car, you are bound to find many people with a driving license and experience. If you walk down the same street, asking people if they know how to set sails, or man a boat, you will be lucky to even find one person.
Sailing is not easy and is not common expertise. Even if people can own a private yacht, they need to hire professional yacht management to run the boat.
This makes sailing even more expensive, making people who are clueless about how to set sail on their own, more reluctant to pursue such a venture.
However, if there is advancement in marine vessel technologies about the production of boats that are automated, efficient yet easy to manoeuvre, it will attract more buyers, resulting in a growth in the market.
A possible future limitation that can make the manifestation of this forecast challenging is the impending and fast-growing threat of global warming.
If the marine vessel emission regulations are increased, it will make owning and running recreational boats and related businesses more expensive. An increase in expenses might drive people away from the market becoming an obstacle in growth, and the only people left in this industry will be those who can operate here while going green.
Another limitation can be pandemic management. Even as the world is focusing on reopening, the threat of Covid-19 is far from over. Until we find a permanent solution or some effective prevention methods for dealing with this threat, no industry can maintain stability or expect growth with certainty.
The trends of the current recreational boat market are showing promise of future growth, as observed by experts. However, there are crucial factors that will affect how this market behaves in the future. However, the future turns out, if you want to get into this market, or hope to buy your boat, the time to act is now.