Heads in Beds – Boats in Berths
Both marinas and hotels are primarily engaged in providing accommodations for the general public.
What business are we in?
The following is a quote from an article in the Harvard Business Review “Marketing Myopia” by Theodore Levitt:
“The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today, not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product-oriented instead of customer-oriented”.
Hotels and Marinas
Marinas are a part of the Hospitality Industry, not the Transportation Industry (SIC 4493 Division of Transportation, Communications, Electric, Gas, And Sanitary Services)
The primary operating activities of a marina are similar to that of a hotel. Hotels and marinas revolve around managing rentals, managing personnel, maintaining the property, and supplying services. They are primarily engaged in providing accommodations for the general public. Both have the most perishable product in the world; once a berth or hotel room goes empty for the night, it is lost revenue that can never be recovered.
Most people believe only hotels are considered to be the hospitality industry; however, the hospitality industry includes a host of other businesses, including airlines, cruise ships, trains, restaurants, sightseeing tours – marinas. Some defining elements set the Hospitality Industry apart from similar companies. Not only do hospitality companies focus on service and luxury, but they also depend on disposable income and giving customers what they desire. The broad-reaching hospitality industry caters to leisure time and ensures that every customer has a pleasant experience and enjoys their limited leisure time.
However, although marinas and hotels have the same primary product, providing accommodations, the main difference is that marina guests usually stay longer, i.e., annual and seasonal contracts. Guests spend more time at a marina and intermingle with other guests more than at a hotel. Marinas create more of a group social environment and offer more of a club experience for their guests than hotels. Developing this social environment is essential to the success of a marina. Planning marina guest events regularly are crucial. Once your guests become socially involved and build relationships with each other, losing customers is less likely.
Example Of some Hotel forms for marina use:
Marinas could also use many of the forms used by hotels with a little adjustment. I believe that the original online marina reservations systems were conversions from hotel reservation software. Other hospitality forms can also be converted to marina use, for example:
Hotel REVPAR (Revenue Per Available Room) hotels use this form to find true occupancy and ADR (Average Daily Rate) based on the number of rooms available. The following is one I designed for marinas “REVPAF “ (Revenue Per Available Foot).
Marina REVPAF (Revenue Per Available Foot)
|Dock||Number of Berths and size||Total Length||Out of service||Net|
|A||29 @ 30′ ea.||870′||2 @ 30′ = 60′||810′|
|B||58 @ 36′ ea.||2,088′||4 @ 36′ =144′||1944′|
|C||54 @ 40′ ea.||2,160′||0||2160′|
|D||50 @ 45′ ea.||2,250′||4 @ 45′ = 180′||2,070′|
|E||21 @ 50′‘||2,310′||12 @ various sizes = 640′||1,670′|
|F||15 @ various sizes||1,350′||0||1,350′|
|Total docks||Total Berths||Total Ft.||Total non-usable||Net Available|
|7||250||11,553′||21 berths @ 988′||10,529′|
In REVPAF Marina dockage revenue is calculated by price per foot not per berth. The following is the one I created for Lincoln Harbor Yacht Club, REVPAF (Revenue Per Available Foot) of dockage.
Percentage of Occupancy = 6,459 feet occupied divided by 10,529 feet available = 61%
occupancy. Total daily berth rental revenue $15,000 divided by available 10,529 footage = Average Daily Rate Per Foot = $1.42 based on number of dockage feet available.
Another exercise used by the hospitality industry is yield management. The airlines started it, and the hotels took it to another level. It is merely a method of maximizing revenue by controlling your hotel rooms, airline seats, and berth inventory daily – knowing when to sell high (maximize revenue) and sell low (maximize occupancy). It is not just creating season and off-season rates; it is managing occupancy and rate daily.
The purpose of yield management (aka revenue management) is to achieve maximum revenue. A yield management strategy needs to be both reflective and forward-looking. Managers should attain a clear yet detailed understanding of what has happened before and what is happening now. The most efficient way to do this is to draw from historical data to predict what may then occur in the future. So, the process of effective yield management involves understanding, anticipating, and reacting to consumer behavior.
By optimizing yield management, a marina can adjust its prices, to meet the total demand characteristics of its markets. The following is a simple example of yield management using inventory control.
Fourth of July is coming up, and the marina has a great view of the fireworks on Saturday. That weekend Friday, Saturday, and Sunday is a holiday weekend. A month out, you are getting many reservations for one night on Saturday (fireworks), and you fill the marina with Saturday night bookings. Now, you don’t have space available for the entire holiday weekend stay of Friday, Saturday, and Sunday. You should wait and only except one-nighters a week out. When they call, take their contact information and get back to them when you open up for one-nighters a week out. In some cases, even if they made a reservation at another marina, they might cancel it if your marina has a better view of the fireworks. Let your competitors fill up on Saturday.
As another example of yield management, why do most marinas generally only have two seasons a high season and low season, why not shoulder seasons? You could use a shoulder season one month before high season and one month after the high season when boaters will want to start boating earlier and end later? What about minimum stays and special rates for particular high occupancy holiday weekends? What about taking yacht clubs and rendezvous’ groups at a low group rate during peak season?
Marina Operations and Marketing
The Marina Operations Manuals I create contains a lot of hotel type of forms adjusted for marinas. As an example, I design my Marina Marketing Plans layout based on my marketing plans used for hotels.
Why are boaters not considered tourists?
Tourism is the act and process of spending time away from home in pursuit of recreation, relaxation, and pleasure. Nautical tourism is tourism that combines sailing and boating with vacation and holiday activities. It can be traveling from port to port on a cruise ship or joining boat-centered events such as regattas or taking a small boat for lunch or other day recreation at specially prepared day boat-landings. Many tourists who enjoy sailing combine water travel with other activities. Supplying the equipment and accessories for those activities has spawned businesses for those purposes, with many nautical enthusiasts living onboard their vessels even in port, nautical tourists bring demand for a variety of goods and services. If boaters are tourists, why are boaters not included in national, state, county, and city tourism statistics and promotional dollars?
Look at the hailing ports or the registration on the boats in your marina. They don’t need to come from out-of-state to be considered a Nautical Tourist. If a boat staying at a marina in Fort Lauderdale is from another city in Florida, they should still be considered tourists that are spending money in the local area.
When I worked at Bahia Mar, I was very involved in promoting tourism. I served two terms on the MAC – Marketing and Advertising Committee for the Broward County Convention and Visitor Bureau; Four terms on the Board of Directors and Vice Chairman of Tourism for the Fort Lauderdale Chamber of Commerce, and a Member of the Advisory Board for the Broward County Department of Education Tourism Academy. Nautical Tourism was never discussed.
As an example of a USP (Unique Selling Pro Fort Lauderdale is known as the “Yachting Capital of the World” (There are more than 100 marinas in Fort Lauderdale and over 50,000 registered yachts.) and the “The Venice of America” ( known for its extensive network of canals; there are 165 miles (266 km) of waterways within the city limits.)
I don’t recall any advertising where we promoted “Yachting Capital of the World or Venice of America, instead of only promoting beaches – Florida has 1,350 mi (2,170 km) of coastline. Our beaches in Fort Lauderdale are not unique.
If boaters are tourists, why are boaters not included in national, state, county, and city tourism statistics and promotional dollars? Have you ever seen a Fort Lauderdale tourism ad in a Boating Magazine? Of course, this not only applies to Fort Lauderdale or the State of Florida but other states. European countries do promote Nautical Tourism
My Experience in the Hospitality Industry
Before becoming involved in the marina business, I held senior executive positions in the hotel industry, including two international hotel chains. I also held two of the highest certifications in the hotel industry “Certified International Hotel Marketing Executive” and “Certified Hotel Administrator.” In addition to my hotel experience, I also owned and operated “Destination Development,” a company that provided travel and land arrangements for foreign visitors to the United States.
“There is nothing absolutely nothing half so much worth doing as simply messing about in boats.”
– Kenneth Grahame, Writer