Marina Dock Age, March/April 1999

Bigger Does Not Always Mean Better
by Dennis P. Kissman

We are still seeing a lot of press about the consolidation of marinas and how the industry is changing. There is concern among many marina owners, particularly those with smaller marinas, that the industry is going to go the way that corner hardware stores or office supply stores have gone in the past few years when faced with consolidation. A few years ago I also thought that was the trend, but today I am convinced that we aren’t going to see that big of a change in marinas or the way they are operated in the foreseeable future.

There are several reasons I believe this is true. First, marinas aren’t the typical one-on-every corner business. Marinas require a specific type of location, namely a waterfront location in a desirable boating area with a navigable waterway to the site.

Existing marinas also have a couple of strange allies in the form of environmentalists and governmental regulatory agencies. Even though we often think of these groups as our enemies—and rightly so—they really help curb the competition. For the most part, owners of existing marinas don’t have to lose any sleep over having someone build a marina next door tomorrow and compete for their business.

It’s estimated that of the 11,000 marinas in the United States, only about 2,500 could be considered "privately owned, investment-grade properties" that consolidators are interested in acquiring. That leaves a place in the industry for about 8,500 marinas, or 77 percent of all the marinas. My guess is that it will be business as usual at these 8,500 marinas.  

When you read articles about groups wanting to consolidate the marina industry, there are two things that are always mentioned or implied. First, the marina has to be in a location that has sex appeal and name recognition to the investment community. Once that criteria is met, the second important item is that the marina must be "big" in size—that is to say, it has to have a large number of wet slips. Continue »