Key to the Future

Ken Landon is excited about the future of boating.
The CEO of Cleveland, Ohio-based Key Recreation Lending not only sits on the Grow Boating committee, which will be launching its initiative to bring more consumers into the marine community later this year, but he’s now also privy to numbers that indicate a growing interest in boat ownership.
Thirty-seven percent, in fact, of those surveyed in KeyCorp’s Affluent Consumer Confidence Index, suggested they are interested in boat ownership. The most recent study, which is completed quarterly by an independent party for McDonald Financial Group, a division of KeyCorp, included a handful of boating-related questions. The “affluent” individuals it surveys claim investable assets of $500,000 or more and/or personal annual income of $150,000 or more.
While these individuals rank on the high end of assets and income of the average boat owner, Landon suggests that this bodes well for the industry as a whole.
“We were curious about what the future looks like, and we found some interesting things,” he says. “There are some real opportunities for dealers and manufacturers on the horizon.”
The statistics look good to Key, as well. The lending company’s average boat loan totals around $75,000, and with an array of new products launched at the Fort Lauderdale International Boat Show, “it bodes well for our business and the economy in general,” Landon suggests.
Survey says
The survey asked five boating questions: Do you currently own a boat, or are you interested in boat ownership?; When do you plan on purchasing your next or first boat?; If money were no object, what type of boat would you purchase?; Would you rather spend time on your boat or with your spouse?; and If you were on a boat in foul weather, who would you rather have as a captain, Bush or Kerry?
Those 37 percent who said they were interested in boat ownership are broken down into 14 percent who currently own a boat and 23 percent who are interested in owning a boat. This wealth demographic ranks 9.6-percent higher than the average percentage of boat-owning Americans. Only 4.4 percent of Americans own boats, based on National Marine Manufacturers Association 2003 data.
Ten percent of those surveyed said they planned on purchasing a boat in the next three years, while three percent of that number said they planned on purchasing within the next six months. Referencing the U.S. Census Bureau’s data that indicates that there are more than 5 million households that fall into the top-5 percent income bracket, KeyBank suggests there is a large potential to sell boats in the coming years.
If money were no object, 55 percent of the respondents said they would choose from the motor yacht/cabin cruiser category, 20 percent would choose a sailboat, 14 percent would choose a fishing boat, and 11 percent would choose a runabout/ski boat. The high number of those who chose the motor yacht/cabin cruiser fits in well with Key’s new yacht-related products, which were introduced at the Fort Lauderdale International Boat Show.
Key introduced what it says is the industry’s first rate-lock option for yachts, allowing consumers to fix their loan interest rates for up to a full year, in addition to the introduction of a foreign flag registry and a LIBOR variable rate loan. Through the foreign flag registry, Key says it will help facilitate Cayman Island or BVI registry of the yacht as a foreign-flagged vessel, and the Key will also offer yacht owners the opportunity to finance their loan based on London Interbank Offered Rate (LIBOR) rates, which are traditionally lower than most banks’ prime lending rates.
Adding some interest to the survey, KeyBank discovered that 66 percent said they would rather spend time with their spouse than on a boat, while 17 percent chose their boat over their spouse, and 17 percent were undecided. And in times of foul weather, 48 percent of the respondents would choose George Bush as their captain while 33 percent chose John Kerry. The other 19 percent were still undecided as of one month prior to the election. — Matt Gruhn