1 Research Can Help Set the Course Ed Mahoney Michigan State University

2 Founded by National Marine Manufactures Association (NMMA) and Michigan State University (MSU), the Recreational Marine Research Center (RMRC) conducts original industry research, analyzes the data and publishes final reports (only available to members). RMRC conducts special studies (e.g., market analysis, economic impact assessments) for recreational boating agencies, organizations and marine businesses.

3 During ’ RMRC was involved in a number of different studies including: (1) the economic impact of boating in Great Lakes states, (2) wage and salary study of Michigan marine businesses, (3) attitudes toward required wear of life preservers by adults in all boats that are underway, (4) boat owner annual spending, (5) trips spending profiles for different size boats and, (6) the impacts of fuel prices on boaters.

4 RMRC also conducts quarterly surveys of marine business leaders from different sectors to gauge performance (e.g., sales, inventories) and optimism regarding the future.

5 To efficiently monitor consumer patterns, the RMRC maintains and regularly surveys a nationwide survey panel of almost 10,000 boaters The panel data helps identify trends in boater preferences, levels of involvement, spending, life cycles of ownership and related behaviors. Panel data can be segmented by type and size of boats owned, boating activity, anglers, geography, marine customers, access sites, and more.

6 RMRC Focuses on Research Focused on Industry Needs and Challenges

7 Challenge: Recruitment and Retention of Boaters Minority persons Minority persons “Never have been’s” “Never have been’s” Women Women

8 Challenge: Aging of boating We must be concerned about the “aging of recreational boating.” Aging of owners Aging of owners Aging of employees Aging of employees Aging of boaters Aging of boaters Aging of infra- structure Aging of infra- structure

9 The Number of Up-side Down Boaters High(er) prices High(er) prices Depreciation rate Depreciation rate Low down payment and low interest financing Low down payment and low interest financing

10 Perceptions of Boating Too expensive and getting more so? Too expensive and getting more so? Product quality ??? Product quality ??? Complicated Complicated Dangerous Dangerous Not environmentally friendly Not environmentally friendly

11 To continue to “raise the bar” as to how marine businesses are managed and perceived: Service(s) Service(s) Environment Environment Safety Safety Community relations Community relations Challenge: Enhancing the perception of marine businesses

12 Making boating safer without taking away the fun and feeling of independence that is so important to boaters. Making boating safer without taking away the fun and feeling of independence that is so important to boaters. Challenge: Keeping Boating Fun

13 Challenge: Acquiring and maintaining public access To acquire and maintain publicly owned and privately provided recreational boating access To acquire and maintain publicly owned and privately provided recreational boating access

14 The Overlapping Impacts of Different Factors on Access Closures: Environment Home Security Regulations & Permitting Dredging & Low water Communities? Federal, state and local agencies Courts = Cumulative & Accelerating Loss

15 Challenge: Losing Marinas Increasingly marinas are being converted to other land-uses including residential or retail developments, or being converted to condominium ownership. The number of new marinas is relatively small

16 Challenge: Encouraging Investment in Boating Facilities and Services To create an environment needed to encourage public and private investment and re-investment in recreational boating access, facilities and services

17 Most human beings have an almost infinite capacity for taking things for granted." Most human beings have an almost infinite capacity for taking things for granted." -- Aldous Huxley -- Aldous Huxley Challenge: Taking it for Granted!

18 Challenge: Perception that boating is a rich persons sport and industry A common perception is that “all” boaters and therefore the businesses that serve them are all wealthy! It follows then that the industry does not require public support ?

19 Challenge: Preventing the Killing of the Golden Goose To discourage federal, state and local governments from taxing and/or regulating marine businesses out of business! To discourage federal, state and local governments from taxing and/or regulating marine businesses out of business!

20 Challenge: Educating Elected Officials To educate and re-educate elected officials concerning the importance of the industry and its future potential! To educate and re-educate elected officials concerning the importance of the industry and its future potential!

21 Challenge: Determining and Communicating the value(s) of recreational boating Economic (market) value(s) Employment – jobs Income Sales Profit and rents Non-market value(s) Preservation of blue space Access - Active and passive Reclamation Community Development +

22 Documenting & Communicating the VALUE(s) of Recreational Boating To Encourage Investment We Must Document and Communicate REC BOAT VALUE(s)

23 Monitoring Recreational Boating To identify and monitor key indicators of the “health” of recreational boating: Boating access Boating access #’s Registered boats #’s Registered boats #’s Boating businesses #’s Boating businesses Boating facilities and services Boating facilities and services

24 Sustainable Boating System Boaters CommunitiesIndustry Public and Private Boating Infra-structure Access Boater Recruitment Industry Characteristics Boater Safety and Enforcement Challenge: A strategic state-wide recreational boating plan.

25 Keeping and making marine industry associations effective spokespersons and role models Participation Participation Follow-though Follow-though Altruism Altruism The courage to the right things The courage to the right things By far the best state association with the smartest and most effective executive … V Snider, 2004

26 Challenge: Industry Togetherness We must come together as an industry and focus on issues of strategic importance to the future potential of the industry

27 The industry must work hard to develop and nurture the next generation of industry leaders! It's hard to lead a cavalry charge if you think you look funny on a horse. --Adlai Stevenson Challenge: Developing Future Industry Leaders

28 DRAFT Great Lakes Recreational Boating Economic Benefits Study November, 2004

29 Impetus for a Great Lakes recreational boating study was the Commission’s concern about the Army Corps of Engineers Cost Savings Initiative Process and its implications for the maintenance of federally-authorized Great Lakes Harbors. The Commission’s primary concern was with the shallow draft navigation and the fact that recreational harbors did not fare well when assessed by the Corps’ cost- benefit method. Benefits that accrue from recreational boating were not considered in evaluating the cost of dredging. Many of these harbors, particularly those that were built exclusively for smaller craft, could ultimately lose their periodic maintenance dredging.

30 Recreational Harbor Dredging The perceived rationale is that commercial navigation is clearly in the federal interest, while recreational boating activities are not. This rationale reflects a narrow perspective on the value of recreational harbors to the nation as a whole, and one that, in light of the economic data contained in this study, may not be accurate.

31 Dredging priorities in recent years has focused on maintaining commercial navigation channels and recreational and shallow draft harbors are getting dredged less frequently or not at all. Dredging recreational harbors has become increasingly piecemeal and reactionary. Recreational harbor dredging is usually done in the areas of greatest need, where a member of Congress has complained, or where it is conveniently located near a commercial dredging operation.

32 94 Great Lakes recreational harbors have been federally authorized. FOUR have never been built [Kelly’s Island (Lake Erie); Black River/Alcona (Lake Huron); Cedar River Harbor (Lake Michigan); and Northport Harbor, (Lake Michigan); FOUR have been de-authorized or are classified as inactive (Beaver Bay and Lutsen Harbors on Lake Superior and St. Joseph River and Washington Island on Lake Michigan); and one is on an inland lake (Little Lake near Lake Superior).

33 There are currently 85 federally-authorized recreational (shallow draft harbors) harbors and channels on the Great Lakes maintained by three U.S. Army Corps of Engineers Districts: Chicago, Buffalo and Detroit Districts. Sixty-five federally authorized recreational harbors are managed by the Detroit District, which covers Lakes Superior, Michigan and Huron (the shores along the states of Michigan, Minnesota and Wisconsin). The Buffalo District maintains 21 shallow draft harbors along the shores of Lake Erie and Ontario (shores of states of Ohio, Pennsylvania and New York).

34 Of the 85 federally authorized recreational harbors in the Great Lakes managed by the Corps, nearly one fifth (17) are also harbors of refuge (20 %). Harbors of Refuge

35 For the Detroit District, which covers three of the Great Lakes, there are 54 such harbors, and some of them could be in jeopardy unless a new measure is devised to account for benefits. With the possibility of a new harbor funding program resulting from the Supreme Court’s invalidation of part of the Harbor Maintenance Tax, tonnage thresholds may be considered in the dredging decision process. Some of these ports and harbors have also experienced increased recreational boating and any prioritization process for dredging pegged to minimum commercial tonnage could jeopardize timely dredging at those places.

36 It is estimated that there are more than a quarter million marina slips available in Great Lakes states. Most (89 percent) are seasonal rental slips. An average of 93 percent of the accessible seasonal slips in Great Lakes counties were occupied the summer of 2004, which means that about 107,000 boats were kept in Great Lakes county marinas during the boating season.

37 List of Recreational Harbors

38 List of Deep Draft Recreational Harbors Not all recreational harbors are necessarily shallow draft harbors. Some deep draft harbors once used for commerce no longer support commercial activities. These harbors are likely to benefit from the former commercial status and not require dredging for many years.

39 Detroit District Current authorities and appropriations supports shallow draft harbor dredging of 2,046,825 cubic yards at a cost of nearly $11 million The Detroit District estimates that, in FY05 alone there remains about 555,000 cubic yards of material that needs to be dredged to fully maintain shallow draft harbors. The cost to complete the unmet dredging needs in these 30 Detroit District shallow draft harbors is $6.9 million which is not now available.

40 Buffalo District The Buffalo District supports 20 active recreational harbors. One recreational harbor, Kelly’s Island Harbor in Ohio, is yet to be constructed. Of the active recreational harbors, 77% of those located on Lake Erie have unmet dredging needs. Three harbors with dredging frequency needs of 10 years have unmet dredging frequency needs.

41 Buffalo District Four of the six harbors with a dredging frequency of four years or less have unmet dredging frequency needs. Half-- 50% (4 out of 8) of the recreational harbors located on Lake Ontario have unmet dredging needs. In FY05 alone there remains about 200,000 cubic yards of material that needs to be dredged to fully maintain shallow draft harbors and the cost to complete the unmet dredging needs is estimated at $710,000..

42 DRAFT Step 1: Registered Boats

43 Watercraft Registration Trends in Great Lakes States.

44 Number of Currently Registered Watercraft by State of Registration and Boat Length, 2003.

45 Number of Watercraft by State of Residence and Registration.

46 Number of Watercraft Currently Registered to Residents of Great Lakes Counties in Great Lakes States, 2003

47 Registered Watercraft by Segment and State of Registration.

48 DRAFT Step 2: Spending Profiles

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54 Average Craft Spending by Segments ($ Per boat per day).

55 Total Craft Spending for Registered Boats Using Great Lakes ($ Millions).

56 Average Trip Spending by Segments ($ Per boat per day).

57 Total Trip Spending for Registered Boats Using Great Lakes ($ Millions).

58 DRAFT Step 2: Estimating Economic Impacts

59 Terms Economic Impacts are the changes in sales, income, value added and jobs in the region associated with boating activity. Impact estimates measure the size and importance of boating to the region’s economy, not impacts in a “with versus without” sense.

60 Terms Sales: Sales of firms within the region to boaters. Jobs: The number of jobs in the region supported by the boater spending. Job estimates are not full time equivalents, but include part time and seasonal positions. Four seasonal jobs for three months each counts as one job on an annual basis, whether part time or full time. Personal income: Wage and salary income, sole proprietor’s income and employee benefits.

61 Terms Value added: Personal income plus rents and profits and indirect business taxes. As the name implies, it is the value added by the region to the final good or service being produced. It can also be defined as the final price of the good or service minus the costs of all of the non-labor inputs to production. Value added is the best measure of the contribution of an industry or region to gross state or national product.

62 Terms Indirect effects: Changes in sales, income and jobs from industries that supply goods and services to the business that sell directly to the visitors. For example, linen suppliers benefit from boater spending at lodging establishments. Induced effects: Changes in economic activity in the region resulting from household spending of income earned through a direct or indirect effect of the visitor spending. For example, motel and linen supply employees live in the region and spend the income earned on housing, groceries, education, clothing and other goods and services.

63 Terms Total effects: Sum of direct, indirect and induced effects. Direct effects accrue largely to boating and tourism/service-related business in the area. Indirect effects accrue to a broader set of economic sectors that serve these firms. Induced effects are distributed widely across a variety of economic sectors.

64 Economic Impacts of Trip Related Spending for Registered Boats in Great Lakes States.

65 Economic Impacts of Craft Related Spending for Registered Boats in Great Lakes States.

66 Total Craft Spending for Registered Boats Using Great Lakes ($ Millions).

67 Economic Impacts of Craft Spending for Registered Boats Using Great Lakes ($ Millions).

68 Total Trip Spending for Registered Boats Using Great Lakes ($ Millions).

69 Economic Impacts of Trip Spending for Boats Using the Great Lakes.

70 Total Trip Spending for Registered Boats Kept at Great Lakes Marinas ($ Millions).

71 Economic Impacts of Trip Spending for Registered Boats Kept at Great Lakes Marinas ($ Millions).

72 Total Craft Spending for Registered Boats Kept at Great Lakes Marinas ($ Millions).

73 Economic Impacts of Craft Spending for Registered Boats Kept at Great Lakes Marinas ($ Millions).

74 Direct Economic Impacts of Registered Boats on State Economies

75 Total Economic Impacts (Direct and Secondary) of Registered Boats on State Economies.

76 Direct Economic Impacts of Boats Using the Great Lakes

77 Total Economic Impacts of Boats Using the Great Lakes

78 Economic Impacts of Tower Marine of the Local Community Ed Mahoney and Dan Stynes Recreation Marine Research Center Michigan State University

79 Number of Boats and Boat Days at Tower Marina Note: Tower Marina, located in Saugatuck, Michigan, had 395 occupied slips during the summer of boats in slips Boat days from a 04’ survey of 6,000+ boaters 15,000 boating days

80 Average Annual Craft Expenses for Boats Kept at Tower Marina Average Annual Craft Expenses for Boats Kept at Tower Marina Note: These are the average slip rates for different size boats charged by Tower Marin in 04’ Average craft spending profiles from a 04’ survey of 6,000 boaters

81 Total Trip Spending for Boats Kept at Tower Marina ($ Thousands) Average trip spending profiles from a 04’ survey of 7,000 boat trips. Boaters at Tower Marine spent $2.854 million on trips.

82 Total Craft Expenses for Boats Kept at Tower Marina ($ Thousands) Boaters at Tower Marine spend $2.85 million on craft spending in 04’

83 Summary of Boating Activity and Spending for Boats Kept at Tower Marina Boaters at Tower Marine spend a total of $5.709 million on trips and craft spending in 04’.

84 Local Economic Impacts of Trip Spending for Boats Kept at Tower Marina Note: Economic Impacts are on the Allegan County, MI economy. The direct and secondary (multiplier) effects of trip spending by boaters at Tower Marine on the County are 46 jobs, 829,000 in personal income and 954,000 in profits and rents (value added).

85 Local Economic Impacts of Craft Expenses for Boats Kept at Tower Marina Note: Economic Impacts are on the Allegan County, MI economy. The direct and secondary (multiplier) effects of craft related spending by boaters at Tower Marine on the County are 56 jobs, 1.1 million in personal income and $1.958 million in profits and rents (value added).

86 Total Local Economic Impacts of Craft Expenses for Boats Kept at Tower Marina The direct and secondary (multiplier) effects of all spending by boaters at Tower Marine on the County are 102 jobs, million in personal income and $2.912 million in profits and rents (value added).

87 Web-based Boating Information System

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98 Personal Flotation Devices

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100 Would support or oppose a requirement that adult boaters wear life jackets while underway in all boats

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104 NMMA Executive Compensation Survey

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112 Home Page

113 Marine Business Leaders Outlook Dealers Registration Form

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116 Marine Business Leaders Outlook Dealers Quarterly Survey

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