SIC 4493
MARINAS



This category covers establishments primarily engaged in operating marinas. These establishments rent boat slips and store boats, and generally perform a range of other services including cleaning and incidental boat repair. They frequently sell food, fuel, and fishing supplies, and may sell boats. Establishments primarily engaged in building or repairing boats and ships are classified in SIC 3731: Ship Building and Repairing or SIC 3732: Boat Building and Repairing. Establishments primarily engaged in the operation of charter or party fishing boats or rental of small recreational boats are classified in SIC 7999: Amusement and Recreation Services, Not Elsewhere Classified.

NAICS Code(s)

713930 (Marinas)

Industry Snapshot

According to the U.S. Census Bureau, in 1999 there were 8,200 U.S. marinas. Marinas are usually very small operations, with about half of marinas employing between five and nine workers, most of whom are seasonal. The National Marine Manufacturers Association (NMMA) estimated that in 2002 there were 12,000 marinas, boatyards, yacht clubs, dockominiums, parks, and related facilities. That number has remained unchanged since 2000. Marinas enjoyed an expansive period between 1992 and 1997, when the number of marinas increased 26 percent; there was a 53 percent increase in revenues; employees increased by 27 percent; and there was a 49 percent increase in annual payroll. According to the U.S. Coast Guard (USCG), the number of registered boats increased 14 percent between 1990 and 1999. Despite slighter a lower number of participants in boating in 2002, that year also saw an increase in the number of boats in use, as well as retail and pre-owned boat sales.

The marine industry faced some challenges at it moved into the new millennium, including the shaky economic climate. Recreation and travel in general faced numerous problems due to the events of September 11, 2001, which had people traveling and spending less. The war with Iraq in 2003 and escalating fuel prices also had a negative affect on this sector. Marine industry leaders, however, were mildly optimistic about recovery for the sector during 2003.

Organization and Structure

Marinas, always on or adjacent to the water, have varied physical shapes and sizes, offer a diverse range of services, and lend themselves to different ownership arrangements. Each marina has limitations and options to serve the boating public.

A marina rents, leases, or sells slips, usually in a boat basin with piers and stationary or floating docks. More than 8,000 marinas, with about 400,000 slips, sell marine services. There are moorings and anchorages for about 33,000 boats. More than 200 dry slip or land-based, often stacked, boat facilities store up to 150,000 boats on racks in buildings or on open land. Approximately 1,100 boat yards provide wet slips. More than 100 dockominiums berth boats in clusters of individually owned docks. More than 80 percent of the marinas provide yard services to maintain, repair, or build boats.

Financial Structure. Marinas are located on gravel pits, reservoirs, lakes, rivers, coastal waterways, and oceans. All marina ownership is held by the owner of the associated upland. Water rights are leased from the government. In many states, a government body holds coastal water rights for the public interest.

About 70 percent of marinas are privately owned, profit-making businesses that sell services to the public. About 1 to 2 percent of the marinas are cooperative, condominium, housing development, and yacht club marinas, which serve their members and offer reciprocity privileges to other associations. The remaining 30 percent are municipal, state, and federal government marinas, which are open to the public at minimal or no cost, although some federally owned marinas are exclusively used by the military.

More than 70 percent of the marinas are owneroperated, stand-alone facilities. Corporations, families, and retired business owners provide slips and sell fuel and minimal ship stores. Investment sources are often friends, family, local banks, and savings and loans establishments. Larger marinas are often expanded owneroperated facilities.

The full-service marinas are owned by private or publicly traded real estate corporations. Some offer extensive boat yard services. Others are development complexes. They showcase marinas in two architecturally consistent mixed-use categories that maximize land-bound sales. Urban revitalization complexes integrate commercial space with residences. Resorts emphasize water- and land-based recreation and sports. Investment sources are banks, savings and loans establishments, venture capitalists, private and public industrial and recreational development bonds, investment banking, pension funds, and life insurance companies.

Full-service marinas have broad profit centers. Product sales are derived from slip and building fees, diesel, gasoline, propane and alcohol fuels, engine oil, vending machine products, marine and grocery goods, electronics, custom-built equipment, and boats. Services available include boat washing and cleaning; wood, fiberglass, rigging, engine, and propeller painting, maintenance, and repair; haul outs; and diving.

Marinas rent or lease wet or dry storage by the boat's or slip's length or slip's square footage. Marinas charge transient boats a daily or weekly rate. Permanent customers pay a monthly, seasonal, off-season, or annual rate based on competitive, comparable local prices. Therefore, other sales usually account for a significant amount of marina profits.

The full-service marina draws the demanding boating public with amenities including, but not limited to, deep water for boating; safe tie-ups; launching ramps; dock hand and concierge service; water, electricity, television, and telephone service to the boat; sewage pumping; storage facilities; and various other benefits.

Background and Development

The early concept of the marina, including public access and common ownership of waterfront property for commerce and transportation, dates to Roman Law of 2,000 years ago. The concept was lost during the Dark Ages. The Magna Carta restored public rights to coastal tidelands in 1215 A.D.

In the United States, marinas developed slowly. The U.S. Congress passed The River and Harbor Act of 1899, which authorized the Secretary of the Army, through the Army Corps of Engineers, to approve the building of any structure on or over navigable waters. Recreational boating increased. The wealthy built private harbors in the early 1900s. By the 1930s, the term marina (Italian for small craft harbor) described the recreational boat facility.

After World War II, the middle class bought recreational boats with discretionary income. The marine industry used lighter-weight aluminum and fiberglass developed during World War II to mass-produce durable, low-maintenance marina docks and other products. Simpler welding techniques refined steel construction for hoists. Inexpensive concrete was also available for piers, docks, and pilings.

Until the 1960s, most marinas were owner-operated. Then, developers showcased the marina as the first stage in long-term, mixed-use plans for urban revitalization and resort complexes. As a result of the increased recreational boating across the country, Congress broadened The River and Harbor Act in 1968 to require approval for building recreational structures, further protecting U.S. waterways.

In the 1970s, a series of devastating events rocked the marine industry. Double-digit inflation, 20 percent interest rates, fuel pump lines, the Arab oil embargo, a federally proposed weekend energy conservation motor boating ban, and environmental regulations all adversely affected the marina economy.

Legislation. The federal Water Pollution Control Act amendments of 1972 required permits to regularly discharge waste water. The Coastal Management Act controlled development to protect water quality and coastal and inland wetlands. The Clean Water Act of 1977 further protected natural resources. The Environmental Protection Agency and the National Oceanic and Atmospheric Administration released guideline documents to control non-point source pollution.

The early 1980s provided the marina industry with a friendlier business environment. Increased discretionary spending, tax changes, declining interest rates, and laxly enforced regulations all spirited growth. Amendments to The Federal Tax Reform Act of 1986 allowed private marinas on port district property to continue tax exempt financing for equipment, docks, and marina-related buildings.

The marina industry has remained non-standardized. According to Neil Ross, past president and co-director of the International Marina Institute, the marina industry, in its evolution, is like the roadside service industry when motels were replacing family-owned cabins. However, it is changing rapidly in response to management, environmental, and real estate demands and opportunities.

Approximately 80 percent of tidal flow and inland coastline is private commercial and residential space. Marinas only allow their customers and service workers access due to security and insurance regulations. Actual public access to waterfront is limited to the 20 percent of municipal, state, and federal marinas. With an increase in use, this limited shoreline began proving insufficient to meet the needs of the expanding boating public.

The marina industry began coordinating with government, banks, and insurance companies to maximize cost-effective, creative business procedures. Financiers consolidated foreclosed marinas into $100 to $150 million portfolios for publicly traded real estate investment trusts, freeing banks from the responsibility of disposal. Developers submitted long-term plans to accelerate the three- to five-year complicated government permitting process for dredging and filling. Brokers began selling dockominiums and other large facilities so developers immediately recoup some investment costs. Investors replaced owner-operated businesses with retail chains and franchises to cut costs. In addition, cash-strapped municipalities increasingly investigated the sale of public marinas to private owners. Dry stack marinas, which require less waterfront volume, were an increasing presence as well.

According to 1998 statistics, 13 million families owned boats in the United States, and 570,000 new boats (all types) were sold that year. The NMMA reported that another eight million persons were interested in buying a boat some time in the future. In 1997, some 9,967 marina facilities provided storage space and sold marine-related services and products to recreational power and sail and commercial watercraft owners. No standardized format for determining marina industry assets existed, because a "marina" may refer to a facility with only four docks or one with thousands of slips as part of a larger facility.

The marina industry experienced rapid growth and increased annual sales in all climate zones from 1982 through 1987, the year retail sales topped $8 billion. This was the longest period of uninterrupted growth in the industry's history. From the late 1980s through the early 1990s, the industry suffered increasing financial difficulties. In 1992, boat slip vacancies averaged from 20 to 30 percent, although this figure was less in the Sunbelt states. By 1996, even marinas in southern California were experiencing increasing vacancy rates, some exceeding 40 percent—and generally, vacancies signify additional marina retail losses. A slip customer purchases more products and equipment from the marina than the boating public based elsewhere. Marina expansion and development slowed in the early 1990s, a reflection of a stagnant national economy and poor weather conditions. By the latter 1990s, the number of marinas in operation had stabilized, with a prediction for increased growth due to the positive economic outlook.

Boating Industry 's 1998 random survey of marinas around the country indicated stable occupancy rates, with a slight increase, and a 90-plus percent occupancy rate during peak seasons. In the 1990s, marina owners and operators began to address several challenges to the industry, including periods of economic instability, increased marina insolvencies, stringently enforced environmental regulations, a lack of natural waterfront with adjacent land, and the loss of traditional lending sources. Conversely, market forces created more demand for marina facilities, especially in the Southeast and the West.

Current Conditions

Despite a tough economic climate and the cocooning effect on Americans in a post-September 11, 2001 environment, boating was still enjoying relatively clear sailing in 2002. Estimates from the NMMA showed that in 2002, there were 68.8 million boating participants in the United States, down slightly from 69.4 million in 2001. However, the number of boats in use rose during 2002, from nearly 17.2 million in 2001 to 17.4 million the following year. Retail boat sales were also up for the year, from $28.5 billion in 2001 to $29.2 billion in 2002, as were pre-owned boat and motor sales which rose about $130 million during the same time period.

According to the U.S. Census Bureau, estimated revenues for marinas were $3.26 billion in 2001, up a fraction from $3.25 billion the previous year. Despite showing a gain in a challenging economic climate, in previous years marinas had shown more dramatic increases in revenue, rising 7.2 percent from 1999-2000 and also gaining 7.2 percent from 1998 to 1999.

According to the U.S. Coast Guard, there were 12.9 million recreational boats registered in the United States. in 2001, an increase of 94,000 or 0.7 percent from 2000. The NMMA estimated that in 2001 there were more than 17.3 million boats owned in the United States and that 541,000 new boats were sold at retail. Recreational boating was down slightly in 2000, about 1 percent for the year, with 72.3 million Americans participating in boating. However, spending on boating rose 15 percent in the same time period, to $25.6 billion in 2000, up from $22.2 billion in 1999.

To address ongoing environmental issues and limit future contamination, many states have formed incentive-based marina pollution prevention outreach programs. One such program is the Clean Marina Program, which involves states and organizations including California, Connecticut, Florida, Massachusetts, Maryland, North Carolina, South Carolina, Texas, Virginia, and the Tennessee Valley Authority. The program includes an advisory committee, a coastal nonpoint source management program, guidebooks, educational outreach, grant funds, and coordinates with other programs. Similar partnerships include Boat US, Ocean Conservancy, Marina Environmental Education Foundation, States Organization for Boating Access, and the National Clean Boating Campaign.

Industry Leaders

Marinas vary widely in terms of size, services, and dockage capacity. However, the largest marina businesses provide full services. In the late 1990s, four top industry leaders were American Commercial Lines, Inc., of Jeffersonville, Indiana (In 1998 American merged with the Vectura Group's National Marine); ATC Leasing of Kenosha, Wisconsin, a subsidiary of Jupiter Industries, Inc.; Richard Betram & Co., Inc., of Miami, Florida; and Skipper Marine Corp. of Milwaukee, Wisconsin. Skipper bought four boat dealerships in Michigan during 1999, bringing its total sales outlets to 11. In addition, it operated 20 marinas in four states.

These corporations own and operate marinas as part of larger hotel resort complexes that include other sports and recreational facilities. The largest marina in the United States is Marina del Rey (California), which boasts more than 8,000 slips—the majority occupied by large yachts. Westrec, a management company, controls chains that include over three dozen marinas.

In 2001, the top 20 states for registered boats made up nearly 75 percent of the total amount in the country, with 9.6 million boats. The top 10 states for boat registrations accounted for some 51 percent of registered boats at 6.6 million. Michigan, with more than one million boats, remains the leading boating state in the United States. California followed with 957,463; Florida was third, with 902,964; Minnesota fourth, with 826,048; Texas fifth, with 621,244; Wisconsin sixth, with 575,920; New York seventh, with 526,190; Ohio eighth, with 414,658; South Carolina ninth, with 382,072; and Illinois tenth, with 369,626 registered boats.

Workforce

The marina industry's lack of standardization is reflected in its employment practices. Marinas generally employ staff and bring in independent contractors or concessionaires to whom the marina may lease space or charge to work in the facility.

The stand-alone marina labor force includes the self-employed owner-operators and additional staff as needed, who serve as dock masters, retailers, maintenance managers, and bookkeepers. For 1996, the average number of employees for each marina was between 2.5 and 4 per 100 berths; these were often part-time employees. During slow times of the year, the staff repaired facilities or worked at other marinas, often in a warmer climate zone. Full-service marinas often employed highly specialized employees as well. Various general managers, service managers, operations managers, and controllers were often part of the payroll of larger establishments.

The industry as a whole was standardizing employment and training. The International Marina Institute began a certified marina manager program in 1992, which emphasized standardizing accounting and other financial procedures, environmental processes, and education of customers. The Marina Operators Association of America had more than 300 members, primarily owners and managers representing large marinas, who participated in ongoing information programs. The International Marina Institute had 350 dues-paying members in the mid-1990s, and promoted growth and professional development among members and their staffs.

Research and Technology

New technologies boost marina profits and management efficiency, provide weather protection, meet environmental regulations, and expand space. Marina franchises and management companies are fledgling innovations. Management retraining and computer software lead in office and on-the-dock changes.

In the realm of structural changes, docks and other structures are increasingly made of refined composite structures designed to withstand the elements more effectively than wood. Marinas have increasingly turned to new products with environmental and fire-resistant attributes. Engineers in the 1990s have also redesigned boat yard and dockside disposal systems to meet environmental regulations. Space limitations are resolved with offshore islands for docking, refueling, and mixed-use facilities such as floating hotels. Another area of enhanced development in the latter 1990s was the increased space for dry-dock storage created by new technology and equipment facilitating dry-stack storage. Older marinas continued to utilize large vacant parcels of real property to store boats off-season. However, new technology, including the development of powerful forklift-type vehicles, permits the lifting and stacking of boats into shelf-like racks for off-season storage.

Further Reading

"Just the Stats." Salt Water Sportsman, September 1999.

Manning, Joe. "Milwaukee-Based Boat Retailer Buys Four Dealerships in Michigan." The Milwaukee Journal Sentinel, 20 October 1999.

National Marine Manufacturers Association. "Marine Business Leaders 'Guardedly Optimistic' About Industry Recovery," 4 March 2003. Available from http://www.nmma.org .

——. "2002 Boating Market At a Glance," 14 February 2003. Available from http://www.nmma.org .

——. "U.S. Boat Registrations Increase 94,000 in 2001," 17 December 2002. Available from http://www.nmma.org .

Rogers-Harrington, Joan. "Marina Survey 1999." Boating Industry, November 1999.

U.S. Census Bureau. Arts, Entertainment, and Recreation Services (NAICS 71)—Estimated Revenue for Taxable and Tax-Exempt Employer Firms: 1998 Through 2001. May 2003. Available from http://www.census.gov .



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