Marina Dock Age, July/August 2005

Why Marinas Should Remain Positive Despite High Fuel Prices
By Dennis P. Kissman

Now is the peak of the boating season, and for marinas in the northern part of the country, the late arrival of summer is surely negatively impacting cash flow. This is especially true for marina owners relying on boat sales to generate that much-needed cash flow before the boating activity kicks in. If a marina sells and caters to powerboats, then the high price of fuel has further impacted profitability — not only in boat sales, but also in its existing customer base.

At such times, marinas need to go beyond thinking, “I just need to be able to survive this season.” Marinas that fail to take the time now to plan will be saying the same thing next year. It may be for a different reason, but the marina will likely still be operating in a crisis mode. So what specifically can be done today to help eliminate the chance of operating in a crisis mode in the future?

Problem analysis

The first thing marina owners and operators should do is make sure they understand the components of their marinas, and how they impact one another. This sounds like a simple concept — one that is readily understood. However, the relationship between profit centers is constantly changing, so that a minor impact in one area of the business can have a major impact on another.

The next thing to recognize is whether these problems are going to have a short- or long-term impact on the facility. Next, one has to ask whether the condition that exists is more of an anomaly or one that is likely to occur again on a regular basis?

For purposes of this article, I will focus on one perceived problem — the price of fuel — and how it can impact a marina’s business.

Let’s use a dry stack and wet slip marina with a fuel dock. Let’s assume that it caters to powerboats, its in-season occupancy is more than 90%, and it sells new outboard and inboard/outboard powered boats and broker-used boats. There is an active service center for repair and a customer-base that extends beyond the boats in the marina. There is a good transient business that is attracted to the marina’s waterfront restaurant. Continue »

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