Getting More Out Of Your Marina

Are you getting everything you can out of your marina operation? In light of recent and not so recent happenings; the economic slowdown, loss of wealth due to the correction of the stock market, terrorist attacks on the United States, new boat sales all but dropping off a cliff, marina owners and operators need to find additional revenue sources to offset possible reductions in boat storage revenues as well as reductions in other income streams.

If you were in the marina business during the late 1980's, you know things may slow down a bit. The lower end of your customer base may need to take their boats out of storage in order to cut expenses. Besides boats leaving the marina, both wet and dry storage, your customers may cut back on their boating activities which will mean lower fuel sales and lower service revenue (if they don't use em, they won't break). What can you do to keep the dollars coming in?

You need to look around and see if you have a little extra help on the payroll you do not need. You may be able to cut back some hours or have someone go to part-time rather than letting someone go. It's tough out there for everybody right now. What other expenses can you lighten up on that won't materially effect the quality of your services? Do not cut back on advertising unless it is a massive yellow page ad. I personally do not think the yellow pages are an effective medium for much other than boat sales. Don't be like the manufacturing company that was faced with serious financial problems and in order to cut back on expenses they stopped all advertising and fired the entire sales force.

More obvious than cutting expenses is increasing revenues. Look around and see what you are doing and providing as well as what you are NOT providing in the way of services and amenities for your customers. You need to find out what you can do and if it will be cost effective.

This calls for a market survey of the market you are in. Identify what your market parameters are and survey that market to position your marina in your market. This survey will answer a lot of questions such as: how do your rates compare to others, what are others doing or providing that you are not, what are the sizes of boats in your market, are there more sail than power, can you offer storage for those boats, how about trailer storage, dead storage, shrink wrap, are your rest room facilities the best they can be, showers, laundry, do you have a weather station, transient facilities, the list can go on and on. You need to identify what's going on in your market and meet or beat your competition.

When was the last time you conducted a customer survey? You can do this with a simple sheet of paper mailed with invoices or via a separate mailing, with an addressed postage paid return envelope or a postcard included. What would your customers like to see provided, what is their major complaint? If you provide more are they willing to pay more either in their rates or a little extra for the particular thing you offer. No names are needed to insure better returns.

Doing a total market survey by yourself for yourself may be a bit tricky due to the competitive nature of other marina owners and operators. It may be helpful and money well spent to get an outside consultant to conduct a market survey for you, even give you some guidelines concerning the customer survey. If it is sent by an outside company and returned to someone other than the marina owner, the returns may be better. You just might be able to recognize the way Mrs. Jones checked the boxes so she might not send hers back to you for fear of being found out.

There are a mountain of things you can do to add to what you currently provide at your facility.

Can you add additional storage racks either inside or outside? Is your dry stack building capable of handling longer, wider boats? If your building was built more than ten years ago it probably was built to hold boats up to 22 or 24 feet in length and not more than 8 1/2 or 9 feet wide. You can re-rack part or all of it and increase over all length to about 30 feet, depending on the total width of the building. New racks, doublewide bays set at a 60-degree angle will let you do that. You will loose in the total over all number of boats but you will be able to store longer, wider boats which pay higher rates. For example, one facility re-racked an old 90-foot wide by 184-foot long boathouse that held 140 boats in old pipe racks and pallet racks with a maximum length of 23 feet and beam of 8.5 feet. At one hundred percent occupancy (which it never was) if each boat was 23 feet long the total maximum length of boats that could be stored was 3,220 feet at a rate of $6.00 per foot per month or $19,320.00 per month. Keep in mind that they never achieved 100% occupancy. After the new racks were installed the capacity was 100 boats at 30 feet in length for a total of 3,000 feet of boats (only 220 feet less than before). But the new rate was $7.50 per foot per month. The total storage revenue was now $22,500.00 per month. The annual increase was just over $38,000.00. The occupancy went to 100% in less than 6 months and they now have a waiting list. There was one other marina in the area that could hold 30-foot boats and they were full as well. Once the new boat dealers heard about the change they sent about one half of the new customers. 

The cost to do such a retrofit and the way one can pay for it makes this a very solid decision. According to Pat Farrell of Coastal Marine International, the provider of the new rack system above, the cost today for the example is about $95,000.00 complete with new bunk boards.
The rack system can be leased for 5 years at 9% interest with approximately $4,000.00 down in cash, which represents the first and last month's payments. The monthly payments are $1,972.04 for five years and a buy out at the end of the lease for $100.00. Check with your accountant about how to handle the lease payments, buy out at lease end, and what you should do after the lease with regards to the racks, value, and depreciation. The increase in monthly revenue pays for the re-fit and the entire thing pays for itself in two and one half years. The lease payments should be expensed. If you pay cash or finance the racks, the depreciation write off will help your bottom line as will. The end result is a very attractive financial decision and one that gave the marina a competitive edge by providing something only one other marina in the market was providing. In addition to the increase in storage revenue, fuel sales improved as did service activity. Look for places to put two high outside racks as well, to hold those boats that have hard tops, radar arches, and mini-towers. Galvanized racks, two high run about $750 per boat. Figure a 28-foot boat with tall needs will pay top rates, even outside, and the thing pays for itself in three to four months.

I need to mention that in the above example even though total number of boats dropped from 140 to 100, there was enough room outside to put the 40 boats they lost inside. They did not add to the total overall density, which may be a problem in some areas of the country. The net effect for that marina was an increase of approximately $130,000.00 per year. Make sure your current forklift, launch area, and driveways will handle the extra loads.

There are other things you can do that do not cost as much as the re-racking example but add to customer appreciation and most important, customer retention. 

Marinas are becoming destination recreational facilities not just places to keep a boat. Many facilities have added swimming pools, play areas for children, club-like restroom\shower facilities, a community room for gatherings, parties, local boat clubs and fishing clubs to meet. Putting green. Tennis courts. The entire family can come to the marina for the day even if they don't want to go out fishing with dad, and have a cookout when he gets back. Customers want to be part of this environment and will pay more to do so. Hold fishing tournaments, fishing clinics, learn how to use a fly rod, learn about scuba diving, offer car detailing while the customer is out on their boat as well as boat detailing. Show your dock or yard employees how to sell a detail job and offer them a part of the money. It can keep them busy if there is not much else to do and almost pay their wages.

Adding to or improving your services and amenities and perhaps the cost of a good outside consultant doesn't cost, in most instances it pays.