Competition has always been heavy for consumers’ discretionary time and money. It is going to remain especially heated for another year according to analysts who follow leisure markets. Regardless of the product, boats or RVs, golf clubs or fishing lures, market watchers point to rising fuel prices, general economic and job worries, and falling home prices as spending constraints or acquisition postponements on optional goods and services.
Marketing pros talk about “time and treasure” as the two primary areas they compete for in offering their products or services to customers. Finance providers look for new items to loan on as well as new ways to supply the funds to help customers obtain the product or service desired. Growth in home equity loans allowed many consumers to buy things otherwise out of reach. This finance option is greatly reduced with downward price pressure in house values. Traditional asset-backed loans, including those for boats, are expected to remain widely available, though the qualification process has become more stringent over the past 18 months.
On the positive side, the base number of participants in many leisure activities remains strong and is growing along with the general population, and in certain sectors that are in cyclical favor.
Within market sectors, consumer preference shifts can also affect where the funds and time are directed. The Motorcycle Industry Council reported a slight decline to 1.1 million units sold nationally in 2007, but sales of more fuel-efficient motor scooters rose 24 percent in the first quarter of 2008 over last year.
Marine lenders, who often also finance airplanes, are intrigued by the maker of a new light sport aircraft, who is aiming marketing efforts to the same audiences buying motorbikes and powerboats. The owner of Icon Aircraft told the Wall Street Journal he is committed to bring back the romance and excitement of flying by selling it as a lifestyle, an approach similar to the industry’s “Discover Boating” effort. The twin-seat Icon A5 can be folded up to be trailered and can fit in a garage. It will be available in 2010 and is expected to cost about $140,000 – roughly the same as a nicely outfitted offshore sport fishing boat.
Industry associations track where the money is being spent.
Of interest is the number of participants and how they move to new or rediscovered activities. NSGA defines a participant as someone over the age of seven who engages in the activity at least twice a year. Though this is not a very exact science, participation levels reflect underlying changing demographics such as age, income, gender, regional influences, etc.
Participation does not equate to “ownership” of the related equipment. But it does indicate the breadth of interest in the activity and the potential for the industries involved to serve consumers with products and services, including finance and insurance.
This broad view of the recreation market underscores that the core benefits provided to consumers with its products have, and will continue to have, high value. Spending time with family and friends is achieved in boating, fishing and RVing. Adventure and a “getaway from the daily grind” can be fulfilled on the open road with motorcycles or in the sky with light aircraft.
Recreation industry sales performance is cyclical. It is being challenged now, as in the past, by a difficult economy. But, interest in participation heralds better times for those who make and finance products for consumers whose pent-up demand to be active and out on the water continues to grow.