In a classic case of supply and demand, the pandemic-driven increase in boat sales means more marina business
Three years ago, Thomas McCarthy bought land on the Bull River in Savannah, Ga. But unlike most investors, he wasn’t looking to put up condos or a waterfront commercial building. His plan was to build a marina. “There hasn’t been a new marina built in Savannah for more than 20 years,” says McCarthy, who is the managing partner of the Savannah Boathouse, with his brothers as silent partners. “Most people aren’t going to put that money into a marina.”
Or at least they weren’t until recently. After pandemic- related restrictions on recreational boating around the country eased in the spring, boat sales skyrocketed and remained strong through the fall. When people bought all those boats, they needed a place to use and store them.
“Customers value the marina as a way to kind of escape the whole Covid thing,” says Bill Anderson, president of marina management for Westrec Marinas, which has 26 facilities it either owns or manages for municipalities around the country. “The only problem for marina staff is that every weekend is like July Fourth. We’re completely packed.”
McCarthy also owns the Freedom Boat Club franchise at the Safe Harbor Bahia Bleu in Savannah. “I’ve been there 16 years, and there’s always been available space,” he says. “We had been in the process of trying to find a second place in Savannah.”
The Savannah Boathouse is scheduled to open in March, and he plans to move the Freedom Boat Club to the new location, so there will be built-in income. Based on early interest, the new marina could wind up turning away customers. “I’m more than 50 percent full, and we’re three to four months from opening,” McCarthy says.
After purchasing the land, McCarthy started the permitting process and collected construction bids. It took nearly three years to get all the approvals, and he and his brothers decided to start building. They wanted to keep the construction crews employed when Covid-19 first hit.
McCarthy estimates the total cost of the new facility at about $8 million. Savannah Boathouse will also have rack storage for up to a 36-foot boat with triple outboards. There’s 2,000 linear feet of dock space on the Bull River with a depth of 30 feet at low tide. All told, the facility has 5 acres, with 3½ that are buildable. Rates are $16 per foot wet or dry with a one-year contract.
Every Westrec marina around the country has a waiting list for slip or rack space, and the company has seen a 30 percent to 40 percent increase in fuel sales. Anderson says a primary factor in continued demand is that customers are abiding by Covid-19 guidelines. “It makes the experience with the family safe. The customers really value that, and they’re self-policing,” Anderson says. “People are cherishing this opportunity.”
Anderson says a key to managing a marina successfully is looking ahead. He uses Haulover Marine Center in Miami Beach, which Westrec started developing in 2014, as an example. “If you go back to 2013, I can pretty much guarantee that no one was thinking about putting a 60-foot boat in a stack and a forklift that could move 70,000 pounds,” he says.
At one of its Georgia properties, Westrec takes a 70-foot slip and puts a 50-foot cruiser in the spot. For the last 20 feet, the marina builds a sheltered patio area so customers can still enjoy the waterfront when weather doesn’t permit boating. “It’s incumbent on the marina owner to make sure the new customers coming in are going to be our customers after the pandemic because they received extraordinary customer service,” Anderson says.
When negotiating a purchase or the development of a new property, Westrec uses a marina economic impact calculator to make presentations to civic planners, and permitting and regulatory agencies to demonstrate the contributions that marinas make to an economy. In late 2020, the calculator was updated by the Virginia Institute for Marine Science under an agreement with the Association of Marina Industries.
Even in areas that have short boating seasons, such as Maine, marina owners experienced a banner year in 2020. Steve Arnold owns Marina Holdings, which includes Yarmouth Boat Yard, Moose Landing Marina in Naples and the Freedom Boat Club of Maine, which is expected to have four locations in 2021. The club is at the Yarmouth yard and at Moose Landing, and has facilities at Fore Points Marina in Portland and at Sunset Marina in South Portland.
Arnold’s Freedom Boat Club Franchise also saw a large influx of members in 2020. When other states were reopening earlier, Maine Gov. Janet Mills kept the state restricted later into the spring. When marinas reopened, Arnold’s companies benefited from the relationship with Freedom Boat Club because of the guidelines the company had established. “We implemented Freedom’s best practices, disinfecting the boats and social distancing them,” Arnold says. The company also used Zoom calls for classroom training for new members, and made sure the onboard training was socially distanced.
At Moose Landing Marina, which houses the most popular rental operation in the area, business increased by 40 percent. Rentals usually start picking up around June 25 after school gets out, but with everyone attending classes remotely, the rental reservations started about a month earlier. “It was busy every single day until the end of September,” he says.
Rick Roughen is the president of National Marina Sales, a real-estate brokerage that specializes in marinas. He represents the individual marina owner when the corporations such as Westrec, Safe Harbor and OneWater Marine come calling. In late November, National Marina Sales had 21 listings on its website, with 14 shown as sold, two under contract and five active. Roughen visits every marina he takes on and says valuation is based on “metrics, measurements of income streams, and the quality and type of income streams that a marina has.”
Roughen values income streams such as storage as class A or A-plus, while fuel is an A-minus. Service is a C-plus, boat sales is often reviewed as a C-minus because it’s volatile, and a ship’s store is C-minus.
While some pundits see the mom-and-pop business model going away in the marina marketplace, Roughen says it will always have a place. “Mom and pop, that means they are the people who have the blood, sweat and tears in the business,” he says. “There’s always the boater and the fisherman who are going to be attracted to a local marina.”
Regardless of the location, McCarthy says the increased demand for marinas is going to continue. “We’ve learned a lot during the pandemic about life in general,” he says. “People may be refocusing their efforts to be more family oriented and participate in outdoor activities for quite some time.”
This article was originally published in the January 2021 issue.