As businesses across our industry fight to navigate the landscape of federal stimulus packages, there’s an untold story you should be aware of.

That is that the organizations the government designates to support their respective industries — which in this case means almost every single one of the marine trade associations you know today — are NOT eligible for the federal stimulus program.

As a 501(c)(6) non-profit trade association, the MRAA was created for the sole purpose of supporting and fostering the success of the marine industry. Our founding documents call it the “welfare of marine retailers” … or in other words the health, happiness and fortunes of those businesses. But 501(c)(6) organizations were left off of the list of organizations eligible for the PPP.

Despite this decision, over the last 45 days or so your MRAA team has worked tirelessly to support your business. They’ve produced more webinars in 45 days than they had planned for the entire calendar year. They’ve written and designed more pages of educational content than any single quarter in the history of this organization. They’ve flipped the switch on years (and more than $100,000) of online educational course investments to give every dealer – members or non-members — free access. They’ve had more conversations with decision makers in Congressional offices and at the state-level than any previous two-month period. They’ve battled for the “essential” status of retailers in almost every state. They’ve conducted and shared more research and best-practice-related blogs than any entire year previous. It’s been a herculean effort in support of our dealers and all despite the payroll reductions that we, too, have had to incorporate.

The MRAA is a non-profit entity and as such is focused on providing support much more than collecting revenue. Yet, in times like these, it’s so easy for businesses to think that their membership dues don’t mean a lot and are easy to trim out of their expenses. The exact opposite of that is true. Your membership dues are what make MRAA’s work possible.

I don’t know who had the authority to designate today #GivingTuesdayNow, a day designed to raise awareness of non-profits in these difficult times, but regardless, our team here at MRAA is pausing (after yet another great webinar, mind you) to recognize this movement and to ask for your support. Let me be clear, we’re not asking for a donation … we’re asking for you to support the MRAA in ways that will give you incredible return on investment and amplify our ability to advocate for you.

·       Renew your membership or join the MRAA for as little as $395.

·       Upgrade to Silver Membership for $995 and give your team access to 140 courses at MRAATraining.com.

·       Or Get Certified and gain access to a proven business template for your dealership.

Even though the MRAA is a non-profit, it is a business just like yours. Except we are unique in that without support from our industry, from the businesses and individuals we work so hard to support, we don’t exist. While we continue to fight hard to help create more opportunities for your business, we are also fighting to gain access to some of the same stimulus package opportunities for ours and other 501(c)(6) organizations.

We’ve heard plenty of experts tell us to be direct when making an “ask,” so that’s what I’ll do. We ask that if you find MRAA’s programs or services or any of the COVID-19 related webinars, documents, data, best practices, publications, communications or other resources of value, please support the MRAA and this incredible team by becoming a member.

When we turn on the news these days, there is a lot of data being thrown at us. And for good reason. With all the speculation about what might happen in the COVID-19 economy, data is needed to help us sensibly navigate our current reality. It also grabs our attention, and the media knows it.

But as important and compelling as it is, data needs to be understood in the proper context. Take, for instance, recently reported data showing an 18-percent decline in new powerboat registrations in March 2020, as compared to the same time last year.

In normal times, registration data gives our industry a monthly pulse on how our industry is performing. It is invaluable and remains critical to understanding the trends in the market place at any point in time. This blog is not meant to question that.

However, when looking at recent registration data, it is important to note that of the 50 state offices that process boat registrations across the United States, only two — Georgia and Wyoming — are actually open to the public. Four others — Arizona, Iowa, New Hampshire and Oklahoma — permit consumers to enter administrative offices on an appointment-only basis. The other 44 state offices, as well as countless municipal offices responsible for administering motorboat registrations, are closed to the public, offering only mail-in or online services.

44 of the 50 state offices that processed registrations are closed to the public, offering only mail-in and online registrations. 

As a regular practice, organizations that analyze state registrations comb through monthly data from “early-reporting” states, and the number of states reporting for any given monthly snapshot fluctuates on a regular basis, typically between 25 and 32 states. March 2020 early-reporting states totaled 22 in all, or about 42 percent of the U.S. boat market. Comparatively, February 2020 early-reporting state data was based on registrations from 30 states or about 61.5 percent of the market.

I am not disputing the accuracy of the new boat registrations that were reported. Nor would I argue that new boat sales haven’t been negatively affected — we have every reason to believe that boat sales would be impacted by the mandated closures of many marine businesses and the restrictions placed on the public in many states.

However, as the ability of states to keep up and accurately report registration data has been disrupted by closures and delays, the possibility of a temporary disconnect between boat registration data and new boat sales as a result of this pandemic is also part of the story we need to understand.

I spoke with dealers in each of the “appointment-only” states, and it sounds like there remain opportunities, albeit reduced, to get boat registrations processed. And even in states like Minnesota, where registration offices are closed to the public, some dealers have noted that they have a “secret way in” to the office that’s not available to the public.

Regardless, the decline in the availability of state government employees and offices to process registrations has undoubtedly impacted boat registration data, particularly when it is compared to the same month last year. During this time when our businesses and our government offices can be deemed “essential” or “non-essential,” it’s important to identify that such statistics don’t offer an apples-to-apples comparison and may be influenced to varying degrees on a state-by-state basis and on a month-by-month basis, depending on the status of each specific state office and their many satellite locations.

Although we researched and identified the status of each of the 50 state registration offices (see graphic), their actual operational capacity for processing registrations remains unclear. We know, for example, that the Connecticut Department of Motor Vehicles was shut down on and off for weeks, dating back to mid-March, with some branches being unable to register private-sale boats. While the DMV has adjusted procedures, they are admitting that they are delayed.

We also identified that some states, like Kentucky, are taking steps to extend registration timelines so customers can use their boats while there are delays. Other states, like Colorado, are offering boaters the option to obtain another temporary registration permit from the dealership they purchased their boat from. In addition, agencies are moving to a larger emphasis on online and mail-in registrations. This, of course, could increase the already-existing lag time between purchase and boat registration as well.

It is reasonable to expect boat sales to be off of the pace of last year, as there are significant challenges for our dealers right now. Many dealerships are only partially open, at best, learning on the fly how to run a brick-and-mortar retail business out of individual employees’ homes and conducting boat sales by appointment only. Mix that with rising unemployment and serious economic concerns, and the playing field looks like a giant uphill battle.

While it’s clear that government office closures undoubtedly impact the flow of boat registrations, it’s difficult to ascertain the size of the overall impact and whether the reported numbers are better or worse than what’s actually happening out there. It may simply mean that there will be a larger-than-normal lag before registrations are processed, and we’ll need to understand that that’s part of our current registration analysis reality until shelter-at-home orders are lifted, social distancing guidelines relaxed and the economy regains a sense of normalcy.

Until then, MRAA will continue to look at boat sales trends through a variety of lenses, including a study that MRAA began fielding on Tuesday.

Boat dealership layoffs spiked in the state of Michigan in April, when compared to other states, as government officials locked down the state due to the COVID-19 pandemic, according to a survey conducted by the Marine Retailers Association of the Americas.

In a survey of 199 dealerships across the United States during the week of April 20th, 61 percent of the respondents suggested they had no layoffs to date, and another 14 percent had laid off just 1-10 percent of their staff.

Question: What percentage of your location’s workforce have you
had to layoff due to the COVID-19 Crisis?

61 percent of dealerships reported having no layoffs through the third
week of April. And 80 percent laid off fewer than 26 percent of their teams.

Of the 21 percent of dealerships that noted that 26 percent or more of their teams had been laid off, a full 45 percent of them were from the state of Michigan.

“Our state has shut down our business as well as the right to do any motorized boating,” noted the president of one Michigan-based dealership.

“Get the governor to let us do some business,” demanded the CEO of another dealership there.

In Michigan, Governor Gretchen Whitmer announced on April 10 that the use of motorized boats would be prohibited, and marine businesses had been deemed “non-essential” and therefore must remain closed. Her executive order remained in place until April 24, the day before this MRAA survey closed.

“Our governor has made the use of a boat with a motor against her mandates, with a minimum fine of $1,000 if you get caught,” commented the owner of a Michigan dealer. “We lost a month, but things are looking good as long as our shutdown doesn’t get extended.”

Similarly, dealers in New York, a state that also had strict “non-essential” mandates on marine businesses, recorded high levels of layoffs in the MRAA study, noting nearly 20 percent of the responses in the 26 percent and up categories. The “essential” business status for N.Y. marine businesses was returned on April 18, the Saturday prior to this survey launching.

One dealership operations manager from New York noted that the company had laid off more than 75 percent of its employees, but “we were allowed to reopen on the 20^th, and we have brought back 35 percent of our workers so far.”

“We used our own cash to keep everyone on when the mandate to close first started,” shared another New York-based dealership president. “Now we have the assistance of the PPP loan program to help. We have just been able to reopen, so it remains to be seen how business will be and how long we can continue to front the payroll, the insurance and of the rest of our expenses.”

More than 80 percent of survey respondents had laid off fewer than 25 percent of their team members, a threshold that’s notable because the Small Business Administration’s Paycheck Protection Program provides for forgivable loans, so long as business owners retain 75 percent or more of their payroll. And it’s true that the PPP loans were mentioned numerous times throughout the 85 comments the survey received as the means for which dealers didn’t have more layoffs.

“Only because of the PPP was I able to keep my people working,” noted an Iowa-based dealership president.

“We were able to get the SBA PPP loan and keep our folks on payroll and working in the shop,” shared a Pennsylvania-based dealership general manager.

And many dealers who noted they had gone through some layoffs, have brought staff back since they received their loan proceeds.

“We reduced our staff from five days a week to four days a week,” commented a New Jersey-based dealership manager. “We received our PPP funding from the SBA on April 17, so we had our employees return to the five-days-a-week schedule.”

“Since we received the payroll protection SBA loan, we are almost back to 100 percent,” said the CEO of an Indiana-based dealership.

“I am lucky so far,” noted the president of a dealership who reported no layoffs. “I did not have to close so far, and we are busy. Liquidity is still an issue, though, and if we don’t close the gap in boat sales and/or get our PPP money, I will need to reduce staff by 20 percent and cut pay within the next 30 days. If I get the PPP money, I will actually add a technician.”

In a news cycle that’s heavy with bad news, it’s important to underscore the positive things happening around the marine industry. And there’s a lot to take note of, so I thought I’d spend some time sharing what we’re hearing.

Little by little, politicians are noting the importance of outdoor recreation in today’s physical distancing culture. In Minnesota, Governor Tim Walz recommended from the early days of his shelter-at-home order that getting outside, and notably fishing and boating, was important. Last week, he backed up those words with actions and transitioned boat retailers to “essential” status, allowing them to service boats and sell by appointment.

Within days, Governor Andrew Cuomo in New York reversed a decision to exclude marinas and dealerships from the essential list, collaborating with governors from New Jersey and Connecticut to announce that marinas, boatyards and marine manufacturers will be allowed to open for personal use as long as strict social distancing and sanitation protocols are followed. (Find 49 best practices for creating your strict protocols here.)

In what has been the most restrictive state in terms of boating limitations, Michigan Governor Gretchen Whitmer relaxed boating restrictions on Friday and allowed for prep, delivery, launch and/or curbside pickup of boats in storage or boats ordered online or remotely, provided the business and employees adhere to social distancing guidelines.

And then Miami-Dade County Mayor announced a three-phase plan to reopen public ramps and marinas in south Florida, reversing restrictions he had placed on them a month earlier.

For the dealers around North America, navigating these on-again, off-again restrictions and re-openings has no doubt created challenges, but what we’re seeing is that consumers are turning to boating for the ultimate physical distancing activity.

On Lake Minnetonka outside of Minneapolis, boating activity has rarely, if ever been as heavy as it has been through mid-April. Boat sales reports in the state have been better than expected for many dealers.

“There’s way more interest in boats than I can ever remember there being in April,” says Dave Briggs, who owns Wayzata Marine located on Lake Minnetonka.

MarineMax, Inc., who also has a location on Lake Minnetonka, as well as 60-plus other locations across the United States, reported revenue growth of almost 2 percent in the quarter ended March 31^st. While MarineMax noted its results were partially impacted by the pandemic, the company noted that its online engagement with customers has been stronger than usual.

Similarly, Discover Boating, the industry-led marketing campaign to grow participation in recreational boating reported strong performance and growth this week, compared to the same period last year. The Discover Boating team has been tapping into real-time data on consumer interests and providing relevant, helpful content, resulting in record site traffic. Compared to March of 2019, site traffic in 2020 has shown a 30-percent increase in website visitors, 44-percent increase in organic traffic, a 118-percent increase in visitors to the Boat Loan Calculator, a 45-percent increase in female visitors and a 78-percent increase in visitors age 18-24. And things look to be getting even better, as early April saw a 300-percent spike in organic traffic following the release of new content.

While soft spots remain in the market place, the desire to get outside and go boating seems to be on the rise as people remain on shelter-from-home orders and spring temperatures move upward. At Norris Marine in Oklahoma, sales picked up over the last week, and the service department has been busy.

“I’m cautiously optimistic we can get things going,” said owner Shawn Easton. “People’s attitudes change with the direction of the news, but at some point, they’re going to get a little stir crazy and want to get out on the lake.”

At FB Marine Group in Fort Lauderdale, they’ve had to deal with the ramp closures in Miami-Dade, and that has caused a hit on the company’s service work. At the same time, however, boat sales have been solid, and when I spoke to owner Kim Sweers last week — before the ramps had opened back up — the company had sold a couple boats that day.

While certainly cautious optimism will be key, I’m a firm believer that boating could help lead our economy out of this slow down, as people look to socially and physically distance themselves from each other and from the confinement of their homes. And this upward trend for boating could last for years!