Wildcard expectations for Summer 2024
Apr 30, 2024
I have often stopped to think about the “wildcard” aspect of being in the boat business and I marvel at the ongoing success that some businesses achieve. This year looks to me like it’s setting up to be a bigger challenge than ever before.
Recently, NMMA President, Frank Hugelmeyer, shared the NMMA’s take on the current state of the recreational boating industry, including a look at consumer behaviors and demand in 2023 and how that’s shaping the headwinds and opportunities for 2024. The expectation is that new boat sales will be flat, or about equal to 2023. But his comments have an understandable U.S. market bias and I think Canada will be different in 2024. The rapid rise in interest rates in 2023 had a big negative impact on sales in Canada.
The Canadian Federal Budget announced April 16th brings a significant new level of Capital Gains taxation. At this point, it’s not clear who will be most affected but cottages and other secondary properties may get hit. What will the effect be for our customers? Professionals like doctors are concerned because of how some have structured their practices. Many wealthy Canadians (the sort who are our customers) have done very well with real estate investments but it looks like the Capital Gains taxes are designed to impact that. If a large number of people try to unload properties ahead of the implementation dates, it could drive prices down quickly.
Record Federal deficits are another part of the budget and that may have an impact at higher levels that we cannot predict at this point.
My thought is that new boat sales in Canada may well continue at levels similar to 2023 and that boating expenditures are likely to remain strong for demographic reasons. But the other wildcard we get dealt every year is the summer weather and we are just coming off one of the strangest winters I ever remember. Will our summer be hot or cold? Will wild fires again cloud the skies? Or, will we get torrential rains?
Our customers are very successful people and another thing I have observed over the years is that they are smart and resourceful enough to find their way through stock market crashes, rapidly rising interest rates and all sorts of other headwinds. I think they will be back again this summer – maybe cautious, maybe pulling back a bit, but still enjoying their boats and boating experiences. Fingers crossed!
Also – from last week’s comments about ethanol-free fuel – I have not received a clear answer on what we will have in the marinas in my area, but I will pursue that question with more effort this coming week. I welcome your input on that question.
Andy Adams – Editor
