Industry Articles - 2002
Boat & Motor Dealer / Marina Dock Age, December 2002
Financing Marinas in Difficult Times
by Dennis Kissman
Through the years the industry has seen ups and downs when it comes to securing financing. In the 1990s, we had two lenders, NationsBank and Debis Financial, who took the time to understand the intricacies of marina operations and the risks associated with each profit center. This industry should thank Harry Nieman, now retired from Bank of America, and Holmes Simons, formerly with Debis Financial. Both made it possible for marinas to be sold and refinanced. It was their credibility and understanding of the industry that gave confidence to other lenders to make marina loans, as well. (Holmes Simons has recently returned to marina mortgage brokering.)
Mortgage brokers put the borrower and lender together for a fee. I’m often solicited by mortgage brokers who tell me they have lending sources, but it usually takes only a few minutes to conclude that these brokers do not know this industry. If you do business with an ordinary mortgage broker, chances are it will cost you money without any positive results.
At present, the outlook appears somewhat bleak for financing or refinancing, but it is not impossible. It just takes more work on the part of the marina owner. We must face the fact that there are not a lot of marinas compared to other types of commercial property. To give a lender (or any investor) the comfort level needed to write the check will require good documentation.
Let’s explore some ways to structure a marina sale to obtain financing for a buyer. There are three basic approaches.
The (traditional) first method is to structure the deal to sell the business and property together. The second is to value the property only, and place no value on the business. The third way is to sell the business and retain the property. Of the three approaches, the easiest to finance is the second, where the deal is structured as a land deal only. This approach works because land values can be easily established based on comparable sales. Sometimes this is hard for a seller to understand that the business he worked hard to build for so many years essentially has no value. Unfortunately, this is the fact of life for many owners.
To sell a business, one needs impeccable financial records that can be verified. Unfortunately, in my experience, there are very few marinas that can qualify. Tax returns are a must, and the business will be traded based on some cap rate or multiple of earnings.
Over the last few months, I’ve been involved in three marina acquisition deals for buyers. In all instances, it was impossible to obtain financing based on the financial strength of the business. There was no lack of suggesting what the real numbers were, but statements without credible support was as far as it went. In one instance, all one needed to do was count the boats in the marina and look at the rate card to see that the reported dockage revenues were only a little over half of what they should have been (unless half the boats in the marina were receiving free dockage). Needless to say, the buyer could not get the necessary financing, and thus no sale.
When selling a marina as a business, it is more important to have verifiable sales records than verifiable expenses, if pressed to make a choice. With verifiable sales, it’s easy to explain the inefficiencies in operating the business and what should be done to increase profitability.
Another red flag for a lender is the amount of repairs that will have to be done just to maintain the existing income stream, commonly referred to as deferred maintenance. Lenders also look at the types of income streams, and will value them independently to come up with a composite value. Passive income streams are better than active ones. All forms of rental income are passive; therefore, if you have an engine repair department and make $100,000 a year in profit, it would be of lesser value in figuring the amount of financing you’re able to obtain than if you rented the repair operation out and receive only $50,000 a year in rental income. The reason for this is the cap rate or multiple the lender applies to this income stream.
If you have operated efficiently and profitably over the years and there is little upside potential, it will be harder to sell your marina at a price you feel it is worth. I have never come across a buyer who is just looking for an ongoing income stream. Everyone wants to see upside potential.
To achieve a balance between a well–run marina and one that is run–down is often difficult. For a quick sale at a fair price based on the current market value, you want minimal deferred maintenance and respectable verifiable profits with expansion possibilities.
What you do not want to do is promote expansion possibilities to a buyer unless you know they can be done. For example, do not tell a potential buyer that he could double the size of the dry stack building unless you are absolutely sure it can be done and have proof to that effect.
Although it is difficult to find marina financing or refinancing in this market, it is still out there. I would not hold up plans to either sell or refinance your marina; just be prepared to do a lot more work than ever before and assume there will be unexpected delays.
Boat & Motor Dealer, December 2003
The Insurance Market: What’s in Store for 2003?
by Mark Yearn
At the National Marina and Boatyard Conference in Ft. Lauderdale, I led a panel discussion on the current state of the insurance industry and how marinas/boatyards could reduce their premium increases in the year ahead.
The panel was made up of marine insurance specialists Clarke Smith, Chubb Insurance Company; John Chiazza, Universal Insurance Company; Larry Keefe, Starkweather & Shepley; and RJ Lorenzi, Western Maritime Insurance Services.
This panel gave the conference attendees a perspective from the insurance company side (Clarke), to the insurance brokerage side (John, Larry and RJ).
Sadly, all agreed that the premiums charged to all businesses in 2003 will continue to rise, anywhere between 10 to 30 percent. Property insurance continues to be the hardest hit, with price increases affecting those marinas with large dock or building values the most. Umbrella pricing has begun to rise, in some cases drastically, with fewer markets willing to provide the proper bumbershoot protection that a marine business requires.
On a positive note, however, the liability insurance premiums appear to have stabilized slightly, so the overall news is not as bad as it sounds.
What can you, as a business owner, do to keep your costs from rising drastically?
These following suggestions were brought up during the seminar:
Find a broker who specializes in your business. — All agreed that most marina owners rely on their friend or local insurance agent who may own a boat, but who does not understand the complexities of the marine business. It is important that you work with a broker who understands your business, takes the time to educate himself, has relationships with the proper insurance companies, and who can customize a program that provides complete coverage at a reasonable price.
This is the most important element you can do to protect your business in purchasing the proper insurance program.
Start early. — Four months in advance of your insurance renewal date, select a broker and get to work on marketing your account to the underwriters. Remember, you do not need to shop every year to get the best program. You and your broker may decide that the market you are currently with is best suited for you.
Hard copy loss runs. — Regardless of how you may decide to market your account for renewal, obtain your current loss runs and review them with your broker. Just the fact that you ask for the loss runs will clue your broker in to working harder for you. Any time a client asks for loss runs, a broker thinks that you are shopping your account, so he will give you the extra attention that you deserve. Get the loss runs, review your trends and light a fire in your broker.
Insurance to value. — All underwriters review each and every account to make sure that reported values are accurate. Business owners think they can reduce their insurance costs by undervaluing their buildings, docks, and so on, buying replacement cost insurance, and then collecting at 100 percent when the loss occurs. In today’s insurance market, if you undervalue your account, it will not even be quoted. Keep in mind that underwriters who specialize in the marine insurance market know the replacement value of your property; so be accurate.
All the information. — Provide your underwriters with all the information they can use in quoting your account. This includes surveys of the property, appraisals, history of property improvements, SPCC (Spill Prevention Control and Countermeasures) Plan, hurricane plans, outline of employee training and seminars, associations you support, awards, loss runs, financials, business plan, safety seminars, and awareness training, among others. The more information you can provide, the better.
The high cost of insurance is putting a strain on every business owner. From property insurance to health insurance, premiums keep going up, to a point where everyone is wondering when they will stop. Here’s a thought: During the last hard market (1985), many marina owners raised the fees they charge their customers, blaming it on the rising cost of insurance. Every customer at every marina knows that insurance costs for a business are increasing. They are seeing the same premium increases in their homeowners and auto insurance. They could understand the need for the business owner to raise prices.
When the insurance market eventually softens and premiums are reduced, these marina owners were able to increase their margins simply because they were collecting more, and paying less. It may be a good time for you to raise your fees to meet the increased cost of insurance, with the understanding that in the next year or two your premiums will likely come back down.
There have been various attempts to provide the marina operators and boatyards with seminars that are productive and useful. This was a home run! Make sure you mark it on your calendar for next year.
Mark Yearn is a marine insurance specialist exclusive to Marine Insurance Services based in Milford, Mich. He can be reached via e-mail at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Boat & Motor Dealer, December 2002
International Trends in Marina Development
by Ron Stone
Judging by papers presented at ICOMIA’s 4th International Marina Conference in Sydney, Australia, several trends in marina development, already well established in previous years, grew even stronger in 2002.
Environmental Restrictions
Obtaining necessary permits is often the most painful aspect of a building project. Permitting agencies are often flooded with letters of objection, not to mention protests at public hearings from people concerned about negative impacts on water quality, fish and wildlife, shoreline stability, aquatic vegetation, and natural aesthetics. Such protests can kill a project outright or cause costly delays. Even after a developer makes a good-faith effort to eliminate or mitigate the grounds, the environmentalists refuse to relent, either suing to enjoin the project or forcing the developer to sue for a permit and help recoup the costs of the efforts to address the complaints.
EU Leads
If you thought the situation was getting out of hand in the U.S. with the Save the Manatee group, look what’s happening in Europe. Marina development has been effectively blocked in habitat-sensitive areas of many EU countries after the European Commission sued their national governments for failure to comply with the EU’s 1992 habitat protection directive for fish and wildlife preservation. Of course, marinas are small fry compared to industry and agriculture in the battle between nature and the growth of civilization, but because of the marine industry’s relatively small stature, they risk becoming casualties.
Bucking this negative trend, marina advocates argue that marina operators are in the vanguard of clean water efforts, voluntarily pledging to follow EPA-recommended best management practices. It is ironic that marinas and marina users, as a result of their high visibility on the water, often are falsely accused of being the source of pollution that often is traced to industry, agriculture, and municipal sewage plants. Isn’t it time the marina industry took the offensive by documenting that they are more the victims than the perpetrators of pollution?
U.S. Supports
On a more encouraging note, governments continue to show interest in marinas as a way of capitalizing on their natural resources and boosting the economies of underdeveloped or industry-poor regions.
The Boating Infrastructure provisions under the Wallop-Breaux Act authorize federal aid to marinas willing to invest in transient dockage for cruising yachts that bring visitors to areas of cultural interest. This will likely be reauthorized in the next session of Congress. Authorization of a pilot program to open federally managed man-made lakes to boating and fishing as part of a system of National Recreation Lakes is also favored.
Mexico Plans
Neighboring countries also promote tourism through marina development. The Mexican government is supporting La Escalera Nautica, or the Nautical Staircase project, a $1.9 billion project to build a network of marinas along the Baja Peninsula. The aim is to attract up to 76,000 recreational boaters a year, particularly from California. It is believed that marinas and nautical tourism will not only boost the regional economy but also bring electricity, water, and jobs to the Baja.
Cuba Constructs
The Cuban government sees marina development as the wave of the future for bringing tourists to its shores. Currently, there are only 19 marinas with 696 slips in Cuba. Many of these have been widened and improved in the past few years to attract megayacht traffic. A second phase of development, begun in 2000, consists of building new facilities in tourist regions. A third phase involves building new marinas in remote regions to guarantee safe and comfortable navigation along the Cuban coast. By 2010, Cuba will have 38 marinas with 6,422 slips. Interestingly, most of the boating tourists are expected to be from the United States. Already, 69 percent of all private recreational watercraft visiting Cuba are from the U.S.
Ireland Invests
Further afield, Ireland plans to invest more than 25 million Euros in government funds for a “necklace of marinas around the Irish coast.” Over the next four years, it is expected that other public and private sector investments will boost the stake in water-based tourism to more than 40 million Euros.
The Netherlands Promotes
To fill an economic void on inland waterways where commercial barge traffic has diminished, the Dutch Ministry of Economic Affairs is investing in “Sailing Through Holland,” an advertising program for sightseeing holidays by boat. It furnishes route maps for touring the area.
Italy Streamlines
Italy has streamlined its marina permitting process, which until recently had traditionally been hamstrung by local bureaucracy. In the past four years, 38 new marinas with 18,492 berths (a 39 percent increase over pre–1997 dockage) have been authorized. An additional 17,339 berths are planned. This is because the government recognizes the significant role of marinas in advancing Italy’s tourism and helping the economy of underdeveloped coastal communities.
Venice Doubles
Many coastal marinas, not just in the United States but all over the world, have reconfigured the size of their slips to take advantage of increasing megayacht business.
In Venice, Italy, city officials favor building a megayacht facility in the center of town. The volume of traffic in luxury yachts visiting Venice has doubled in recent years.
Team New Zealand’s America’s Cup victory in 1995 was the impetus for the city of Auckland to build more megayacht slips. It also helped solidify New Zealand’s reputation as the home of the superyacht building industry. The research and development in boat building materials and yacht rigging systems that assisted Team NZ in winning and defending the America’s Cup are used in the production of New Zealand-built superyachts. Today, there are 12 superyacht builders in the country, and export sales are at an alltime high.
The trend for national, state and local governments to contract with private enterprise to manage their facilities has been evident in the news in the past year.
Hawaii Leases
For example, Hawaii is seriously considering leasing management of the 799–slip Ala Wai Boat Harbor in downtown Honolulu, the jewel of the state boat harbors system. The state is operating with a budget deficit and can no longer afford to maintain the facility. Leasing the boat harbor to private developers will not only earn needed revenues for the state, but will also allow better marina maintenance, which has fallen into disrepair.
Greece Privatizes
Greece is hoping to move toward private management of three government-owned marinas in the Athens area. In fact, the Commercial Services Section in the U.S. Embassy in Athens has contacted local marina management companies to determine if they might be interested in bidding for involvement. The Ministry of Development is also reported to have plans for the development or expansion of 38 government marinas, which call for long-term leases to the private sector.
World Matures
Worldwide, the boating population is not only growing older, but the younger generation is not taking up boating as their parents and grandparents did. In the U.S., the Recreational Boating and Fishing Foundation is working with the boating and sport fishing industries on an ambitious program to counteract this trend and stimulate greater interest in the sport among all age groups. Because this is a matter of universal interest, there is even talk of making it a main theme of ICO–MIA's 5th International Marina Conference in San Diego early in 2005.
Meanwhile, marina operators should be alert to the opportunities in the demographics of current boat owners. Because older people need to be more healthconscious, they want recreational products and services that make it easier for them to enjoy themselves. They seek the kind of environment that will enable them to take refuge from daily life. Marinas that are willing to make the investment in this leisure time life style can profit.
Ron Stone is a senior advisor with the National Marine Manufacturers Association and chairman of the ICOMIA Boating Facilities Committee. He served as NMMA’s director of facilities and government relations for more than four decades. He is the founder of the States Organization for Boating Access.
Marina Dock Age, November 2002
Plan for a Crisis
by Dennis P. Kissman
This is the time of year when boats in the North are in storage, while Florida marinas are beginning to enjoy the peak winter boating season. As long as there has been recreational boating, this seasonal pattern has not changed, and there’s obviously nothing you can do about it.
The cyclical nature of the business can cause significant problems for marina owners. One area that has hurt the growth and stability of our industry over the years is cash management. It’s not easy and requires a lot of discipline.
Managing cash in the marina business is especially difficult. It’s relatively easy to understand the annual boating cycle, and most of us can understand the impact of general economic cycles on our businesses. However, the unpredictable factor during the boating season is the weather. The Fourth of July holiday has traditionally been the busiest time for marinas, providing a big cash infusion. Bad weather over this and other key weekends can change the economic picture for your marina for the entire year.
Weather creates other influencing factors. For instance, excess rains or droughts cause inland lakes to fluctuate, sometimes drastically. In some cases, they can make the lake undesirable for boating or the marina inaccessible. In either case, it has a negative impact on profits. Along our Gulf and Eastern coasts, hurricanes can have much the same effect on boating.
If a marina can survive economically on dockage or storage income alone, the above factors have little impact. Unfortunately, the majority of marinas in this country cannot survive without some form of supplemental income, such as boat sales, fuel sales, ship’s store, or repair.
The question is how to manage the cash flow generated from these income sources. This is done via diligent cash management. It means making sure that you have sufficient cash reserves to meet your business obligations. This may strike you as common sense, but I’ve seen too many marina operators who don’t use their native intelligence when it comes to controlling cash.
Most marinas (particularly in the North) require that summer dockage and winter storage be paid in advance. This is good policy because you have the cash in your control to pay the bills when they come due. The problem, however, is that some marina operators go on an immediate spending spree and fail to realize that the money must be saved to be used for operating costs during the peak boating season or slow winter season.
Let’s focus for a moment on the advance payments on summer dockage. These are probably the easiest to manage, and represent the largest influx of cash at any one time. Let’s assume that in January, 50 customers each paid $3,600 for dockage for six months from April 1through the end of September, or the equivalent of $600 per month. That totals $180,000. Your bank account is looking good in January, but what will it look like when the season actually begins in April? It should still have the $180,000 balance in it because you should have been working off the winter storage income up to that time. It is as if you deposit a check into your business account and the bank puts a hold on the check for a number of days until it is certain that it will clear. In your case, the hold on those funds should be until April, and then spread over the six months to be applied toward the operation.
You are probably thinking to yourself that in the real world it doesn’t work that way. But you need to ask yourself if it is the real world or an excuse. Are there other activities that you can create to increase cash flow throughout the year? This is something that you will have to determine.
I can buy into your thinking, but only if you tell me that you have a budget and you measure performance against that budget and make adjustments when necessary. Unfortunately, the majority of marinas I encounter during consulting assignments for potential buyers don’t even have decent financial records, let alone budgets to measure performance. If this is true for you, how do you know when you should be spending the money to assure that at the end of the year there is some excess that we can call profits?
Cash management is nothing more than sitting down and documenting when you anticipate receiving cash, how much you are going to spend, and when it will be spent. What is left over is your profit. To sum this up in a single word, we call it a “budget.”
This is the time of year that you need to be thinking of next season while this season is still fresh in your mind. Review the positives as well as the negatives that happened this year, and what you need to do to better prepare for next season. The challenge is to anticipate events that will influence your marina. Though you may not control the events, you will know how to react when they occur.
I mentioned earlier some problems that marinas on inland lakes face with fluctuating water levels, and hurricanes along the East and Gulf coasts. I will venture to say that every marina owner has developed a plan to physically handle these situations. Why don’t you take those same skills and develop a plan to deal with the financial impact, to avoid saying it was just a bad year? It will only be a bad year if you plan it that way.
Marina Dock Age, September/October 2002
Fire Protection for Drystack Storage Buildings
High, Dry, and Safe?
by Gene Spinazola
Conference presentations are interesting to me, especially when the topic is drystack storage. Generally, the conference begins with an overview of the industry and discussion of the economics of the drystack industry. There will be a presentations on buildings, rack systems, fork lifts and stacker cranes, and so on.
By the second day, those attending this conference are all hyped up and ready to head back home to build their new drystack building. My presentation usually comes right after lunch on the third day. I start out by telling you that I am from Maine and that you all have an accent. Then, I ask you to turn off your cell phone as it might wake up your neighbor during my presentation.
Everything is light and airy and we exchange some jokes. About eight to 10 minutes into my presentation, we roll the first video of a drystack storage building that is on fire. The room goes quiet and all eyes are glued to the screen. These videos are awesome and I don’t really have to say anything at this point, but of course, I do.
The video is followed by slides of the same fire so the audience can see just what happens to a metal drystack building when exposed to fire temperatures in the 2,000 degree range. Although the steel frame is twisted, and, in some areas sagging, the building remained upright and did not collapse. These are some of the questions asked by the audience:
Q: Was the building sprinklered?
A: No.
Q: Why did it take the fire department so long to get water on the fire?
A: I don’t know.
Q: Would a sprinkler system have worked in this fire?
A: Yes, in my opinion, a properly designed sprinkler system would have worked on this fire.
Q: Why did only the boats on one side of the building burn?
A: Because this building had fiber glass roof panels for skylights. These panels burned through quickly and allowed the heat to be released from the building. The fiberglass panels were installed to provide daytime lighting for the fork lift drivers. During the fire, however these fiberglass roof windows acted like bum-out ventilation panels.
I don’t think it’s possible in today’s environment to build a drystack building that is not sprinklered, unless you build in 5,000 square foot modules. If you are building a drystack building today, however, there are at least three National Fire Protection Association (NFPA) standards that may affect your building code requirements.
• NFPA 303 Fire Protection Standard for Marina and Boatyards;
• NFPA 13 Installation of Sprinkler Systems; and
• NFPA 231 Rack Storage of Materials.
Without getting too involved, let’s look at several paragraphs in NFPA 303 that may affect your drystack storage building. NFPA 303, section 5.2.3 is titled “In-Out Dry Storage or Rack Storage.”
Section 5.2.3.1
Water supply and hoses, or portable fire extinguishers and wheeled cart assemblies equipped with discharge nozzles capable of reaching all boats on the highest racks shall be provided.
NFPA 303 section 5.2.3.3
Where boats are stored in multilevel racks in buildings, an approved automatic extinguishing system shall be installed throughout the building.
Exception No. 1: Buildings less than 5,000 square feet provided with an automatic fire detection and alarm system supervised by a central station complying with NFPA 72, National Fire Alarm Code. If such a system is not technically feasible, an automatic fire detection and alarm system supervised by a local protective signaling system complying with NFPA 72, or a full-time watch service shall be utilized.
This exception allows you to build in 5,000 square foot modules that don’t require a sprinkler system. This is not a volume measurement, so you can go as high as your lift permits. Depending on your local Authority Having Jurisdiction or Code Enforcement Officer, two or more modules can share a common firewall, thus reducing cost.
There is no question in my mind about sprinkler systems. I am a firm believer that they work, and fire protection statistics support this position. However, the key issue with sprinklers is the design specifications. You should expect the cost of a sprinkler system designed to protect both the building and its contents, i.e. the boats, to be around $400 or $500 per boat. These numbers represent the sprinkler system with two sprinkler heads per boat, the support piping and control valves, etc. It does not allow for any upgrading that might be required of the water main or for a pump if there is not a central water main system.
Before we leave NEPA 303, there are some operational requirements I would like to point out because they are fire safety Issues.
Section 5.2.3.5
All repair operations while boats are on racks or inside an in-out dry storage building shall be prohibited.
Section 5.2.3.6
All portable power lines, such as drop cords, shall be prohibited from any boat in an in-out dry storage building. The charging of batteries shall be prohibited in the in-out dry storage building.
Remember, most marina fires can be traced back to maintenance, repair work, power cords, battery charging, or faulty electrical systems. If we can eliminate the problem areas by following these codes, we stand a better chance of not having a fire in our drystack storage building.
Gene Spinazola specializes in marina fire and safety issues, and he welcomes calls: (207) 326-9147. He is president of Gene Spinazola P.E. & Associates Inc., in Casane, Maine. www.marinafires.com
Marina Dock Age, September/October 2002
Is Marketing Your Marina a Good Investment?
by Dennis P. Kissman
Through the years I have written articles on topics such as profitability, customer service, and a marina’s value. But rarely have you heard me talk about marketing your marina. We often overlook what we get in return from a good marketing effort because it is often difficult to tangibly identify the results that we get in return for our marketing dollar. In reality, more often than not the difference between a marginal but profitable business and a highly profitable one is the marketing effort that goes into promoting the business.
Marketing a marina does not have to be difficult or expensive, but it must be well thought out and well executed. The first thing you need to understand is that when you market your marina you are aggressively going out to sell your goods and services. How that comes across to your intended audience is the difference between a successful marketing plan and a failed plan. No matter how good you think your plan is, if your intended audience does not see it the same way you do, then you have wasted your time and money.
I like to break marketing down into four broad categories: paid advertising, promotions, public relations, and “word of mouth.” A good marketing plan will include a combination of all four categories. If I was asked to rank them as far as importance to the success of marketing my marina, I would have to say that “word of mouth” advertising is by far the most important single category. It is also the least expensive to implement.
“Word of mouth” advertising is something that you do not have full control over. However, there are things that you can do to assure that the “word of mouth” regarding your marina is positive. If you provide excellent customer service and charge a fair price for the services offered in a clean and friendly environment, I assure you that it will be positive and you will receive positive financial results. Just remember, as powerful as positive “word of mouth” advertising can be for your marina, it is just as powerful if it is negative.
Following “word of mouth” advertising in importance and cost-efficiency is public relations, or “PR.” There are two aspects of PR, obviously: publicity and relations. Publicity is making your news known through the media, while relations consists of cultivating of those media relationships. I have found PR to be very effective in getting the message out, but there are limitations. For example, there is no guarantee that everything you submit to the media for publication will be published; and if it does get published, there is no guarantee when or exactly how it will be phrased.
A commonly used PR tool is the press release. In order to have a press release acknowledged in the media it must be well written, informative, and newsworthy. You want the recipient of your press release to acknowledge that you are a credible source for the information that is written in it. A well written press release will be informative and complete, but not so complete that the recipient has no more questions.
Since you are not in control of when or even if your press release will be published, make sure you include dates if it is time sensitive. Also, if you are relying on print media, you need to know the lead time required to be effective. You shouldn’t promote an event like National Marina Day a week before the event if the publication in which the information is printed doesn’t come out for another month.
If, like most of us, you have limited resources for marketing, I would strongly suggest that you consider engaging someone in the public relations business to help draft and distribute your press releases. A good PR person knows how to write an effective press release, and knows the right people to which it should be directed in the media.
The third element for cost effective marketing is promotions. Often times the first word that comes to mind when we say promotions is “giveaways.” When I think of promotions I think of events in conjunctionwith the promotion. For example, if you host a fishing tournament at your marina, it may include some special rates on dockage during the tour nament. But you must look at the overall cost and return and not just at the reduced dockage revenue you gave away. On promotional events I always look at the total income and expenses compared to not having the event at all before judging whether or not it was a success or failure.
The fourth and most expensive element of a good marketing plan is paid advertising. To the novice this can be a real turn-off. Usually, at first glance anyway, it appears to be very expensive and hard to measure. But there are a few tips that can help guide you in this area.
First, know your market. We have found that national advertising is not cost-effective for a marina except when your customer base is highly transient mega-yachts. Even regional advertising provides a marginal return. Your paid advertising should focus on your heaviest market concentration, not just the occasional customer. If you decide to commit to paid advertising, plan to stay with it for a long period of time. Consistency and repetition are the keys to success in paid advertising, and like the PR person who knows how to write a press release, engage someone to assist in laying out your ad. Most publications will assist you with this task for a fee. In paid advertising more often than not, the more that is said, the less effective the advertising.
I want to close with one observation, and that is that in this industry, it seems to be universal that when business takes a downturn, the first thing a marina operator does is stop marketing the marina. This is the time you need to get your name out in front of potential and existing customers. Don’t sell your marketing effort short. Marketing is an ongoing process and not a single event, and the best way to measure the success of your efforts is to ask every new person who comes through your door how they heard of you. It will surely make preparing your next marketing plan easier, and you might be surprised at what you hear.
Marina Dock Age, September/October 2002
Where There are Boats There Must be Cars—But How Many?
by Ron Stone
Is the amount of car parking at marinas and boat launching ramps meeting the demand? Is there any way to determine a reasonable ratio?
No such thing as a universal rule
A speaker at ICOMIA’s 2002 Marina Conference in Sydney, Australia, recommended that a committee coordinate surveys of marinas worldwide to establish ratios of car parking to slips and moorings. These guidelines would be useful to marina planners and developers, zoning and other government agencies involved in the permit process.
However, this is not as easy as it sounds. The difficulty, concedes Christopher Hallam, a Sydney-based engineer, is the wide range of variables affecting boat usage and parking demands. One needs to be able to compare marinas that share similar locations, boats, and boating activities.
Typically, trailered boats need larger spaces—more than double a normal parking space for a berthed boat. On the other hand, a marina may have both inwater and upland berthing for boats, increasing the need for parking spaces to accommodate slip users and their guests. Also, with marinas as mixed use developments, slip holders may find themselves in competition with restaurant patrons, retail shoppers, office workers, and tourists.
Of even more importance is having a grasp of anticipated use of the facility. Boats in wet slips and dry storage tend to have very limited use during normal weekdays (possibly 10 to 15 percent) during the boating season, and almost none (less than one percent) off-season. On normal weekends, marinas see a higher use (possibly in the 20 to 30 percent range depending on the weather). On extended holiday weekends, traffic is obviously higher (40 to 60 percent).
In its Code of Recommended Practice for the Construction and Operation of Marinas and Yacht harbours (Rev. 1992), The Yacht Harbour Association of the U.K. points out that if a marina caters mainly to transient vessels, i.e., yachts on passage, or if there are already adequate parking facilities available nearby, it’s possible to make a case for the reduction of parking spaces within the marina boundaries. On the other hand, if weekly hire boats are operated from the site (as is common on the U.K.’s inland waterways) two car spaces per boat normally will be required.
What studies show
There was a time, pre-1990s, when zoning codes commonly provided parking ratios of 1.5 or 2.0 parking spaces per slip. However, today there is a difference of opinion among countries about whether marinas really need so much parking space.
In their definitive Small Boat Harbors and Marinas, 2nd Edition (2000), authors Bruce O.Tobiasson and Ronald C. Kollmeyer find that the current recommended ratio, based on increasingly accepted practice in the U.S., is to provide 0.6 to 0.8 parking spaces per berth. This ratio suffices year ‘round, except on major holidays such as the Fourth of July. Because peak marina use days generally coincide with work holidays or weekends when office and commercial parking space is idle, overflow parking at urban marinas can often be found in nearby parking garages or office lots. Away from urban areas, overflow parking at marinas and boat ramps is often accommodated in unused land storage areas.
From time to time, studies have been conducted in the United States to determine parking needs at marinas.
For example, a 1988/89 study by Neil Ross for the International Marina Institute (partially updated in the mid-1990s) verified that the number of parking spaces required for marinas with in-water slips, upland rack storage, and mixed-use amenities ranges from 0.6 to 0.8 per boat slip.
Another study on the north shore of Long Island and Connecticut was published as a paper for ASAE’s World Marina’91 Conference.
To determine parking demand under absolutely peak conditions, the survey took a cross section of 42 public rental marinas, yacht clubs, municipal marinas, and private condominium associations, in the heavily trafficked Long Island Sound between the hours of 2 p.m. and 4 p.m. on the Fourth of July. The survey was taken by photographing marina occupancy from a low-flying aircraft. Prior to the aerial study, telephone calls were made to the marina managers to verify the number of parking spaces and boat slips. It was assumed that each marina surveyed was 100 percent occupied. At mixed-use sites, all cars were assumed to be connected to marina users.
The average percentage of boats counted away from their slip at the time was 39 percent. To figure out the day’s peak demand, the total number of cars parked was divided into the total number of slips at the marina. It was determined that the average peak demand for parking space was .65 cars per slip.
However, the paper was quick to point out that the findings of a local survey are limited in their application and may not be adaptable for use in other places. There are so many variables, it is impossible to make projections.
It is therefore understandable why, when the ICOMIA Marinas Committee queried its members from more than 30 countries, it could find no national statistics for quantifying the number of parking spaces required for a marina.
Some best judgment estimates
In Australia, absent comprehensive survey data, Christopher Hallum has made some best judgment estimates. His firm’s 1993 recommendations to the Roads and Traffic Authority of New South Wales are that if a survey is not conducted of marinas of similar size and nature, the following levels of marina car parking may be considered:
• 0.6 spaces per wet slip
• 0.2 spaces per dry storage bay
• 0.2 spaces per swing mooring
• 0.5 spaces per marina employee
The Australia recommendations are similar to study findings in the U.S. as described above. They also track experience in the U.K. and Europe that marinas normally require not more than .75 car spaces per berth, each space being not less than 4.8 by 2.4 m, with a one-way access driveway of 6 m width.
However, in codes of recommended practices in the U.K. and Europe, additional parking space is advised for yachts more than 40 or 50 feet and for each charter yacht. The Yacht Harbour Ltd. of the U.K. recommends providing 1.5 spaces for each vessel more than 40 feet; EUROMARINA, 1.0 space for yachts more than 50 feet; and both organizations recommend 3.0 spaces for each charter yacht and 1.0 spaces for each marina employee or tenant’s employee.
Surveying techniques
If you would like to participate in a parking study, Hallum recommends surveying over summer weekends when boat usage is at its highest. There is no point in doing it during the workweek when most boat owners are away from the marina, boats are idle, and parking spaces are largely vacant. The size of boats kept in a marina has a bearing on parking needs; the larger the boat, the greater the number of crew or passengers it can accommodate, and the more cars they are likely to use.
Parking at launching ramps
When it comes to parking needs at ramps, the States Organization for Boating Access (SOBA) is among the leading authorities in the United States, and arguably the rest of the world, as well.
According to SOBA’s Design Handbook for Recreational Boating and Fishing Facilities (1996), the number of parking spaces needed at a boat access site depends on the turnover rate of boats being launched or retrieved each day. Where the average boating use is relatively short and vehicle-trailer units are parked at the site for only part of the day, 20 to 30 parking spaces per launching lane are usually adequate. Where users' vehicles are there longer, 30 to 50 parking spaces per launching lane may be required.
The provision of amenities, such as courtesy docks and make-ready / tie down areas, increase the number of parking spaces needed.
Barrier-free parking
Additional considerations are dictated for car parking for disabled persons at marinas and boat ramps to comply with appropriate laws governing barrier-free accessibility.
In the United States, the number of barrier-free parking spaces recommended for recreational boating facilities is graduated according to the total number of parking spaces in a lot: one for the first 25 spaces; two from 26 to 50; three from 51 to 75; four from 76 to 100; five from 101 to 150, six from 151 to 200; seven from 201 to 300; eight from 301 to 400; nine from 401 to 500; 2 percent of the total from 501 thru 1,000; and 20 plus one for each 100 over I,000.
Under forthcoming Americans with Disabilities Accessibility Guidelines design requirements (ADAAG), which will implement the Americans with Disabilities Act approved by Congress in 1990, at least one of every eight barrier-free parking spaces must be “van accessible,” i.e., eight feet wide with an adjacent eight-foot-wide access aisle. If fewer than eight accessible spaces are provided at, at least one must be van accessible.
Conclusions
Determining how much parking space is needed at a recreational boating facility is best done on a site-specific basis. Parking demands vary substantially depending on season, location, type, and size of boat using a particular facility, and activities enjoyed at the facility. Site-specific surveys are very helpful. Reliance on generalized information can be helpful as just one planning tool, but needs to be tempered by the functionality and anticipated use of a specific facility.
Ron Stone is a senior advisor with the National Marine Manufacturers Association and chairman of the ICOMIA Boating Facilities Committee. He served as NMMA’s director of facilities and government relations for more than four decades. He is the founder of the States Organization for Boating Access.
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