Diverse services help marinas stay afloat in turbulent economic and political seas

COURTESY PHOTO Salty Sam's Marina on Fort Myers Beach is one of the area's most innovative boat dealers. The traditional image of the American dream has a happy family, a house with a white picket fence, two cars in the driveway and Fido in the back yard. For many in Southwest Florida, the ideal image also includes a boat — even though that element is being threatened by economic and political turbulence.

One in three households here owns a motorized vessel, according to the Southwest Florida Marine Industries Association. There are about 70,000 registered boats in Lee and Collier counties (50,000 and 20,000, respectively).

And the marine industry is an $18.4 billion per year business in Florida, twice that of the citrus industry. It's the lifeblood of marinas that rent and sell boats and boat slips, and that service and repair boats.

But local marina owners say business has lagged because people are buying fewer boats and taking shorter, if not fewer, excursions, for various reasons.

"It's been the story of rising costs in a deflating economy, and that creates a challenge for people continuing to boat," said Scott Hopkins, general manager at Cedar Bay Yacht Club on Marco Island.

COURTESY PHOTO Matt Hanson, partner, at Salty Sam's Marina on Fort Myers Beach. The cost of boat insurance increased after a rough hurricane season in 2005. Then the housing market started falling apart, gas prices skyrocketed and the cost of raw materials went up. Most recently, the stock market collapse rocked an already turbulent election season and made the summer doldrums for some boat dealers worse than usual.

"For the industry as a whole, boat sales have really been a challenge in the last two years," said Matt Hanson, an owner at Salty Sam's Marina on Fort Myers Beach. "The buyers are few and far between."

Marinas have felt the effects to different degrees, with those offering diverse services suffering less in the wake of the downturn. Convenience stores and delis can help the bottom line, as can full-service restaurants, theme-park like shopping, special trips and entertainment.

COURTESY PHOTO From left to right, Barry Marshall, division president of MarineMax in west Florida, his father Jerry Marshall, who started MarineMax and Ryan West, general manager of the Fort Myers location. Salty Sam's has an array of attractions. The marina's Parrot Key Caribbean Grill is a lunch and dinner spot popular with boaters and non-boaters alike. Pieces of Eight, a 65-foot replica of a Spanish galleon pirate ship at the marina, has live entertainment onboard. The Key West Express that ferries passengers to and from Key West also docks at Salty Sam's.

"I don't know if there's any other marina you could compare us to," Mr. Hanson said of his 30-acre property that has 135 wet slips and 250 dry slips. His father founded the business in 1999, recognizing the potential of what was then a deteriorating mom-and-pop operation. Two years ago the docks were completely rebuilt.

Innovations

Boaters have also been more interested in keeping up their boats, as evidenced by the increase in the parts and service business at places like Salty Sam's and MarineMax. One of the nation's largest boat dealers, Marine- Max has seven locations in Florida, including one in Fort Myers and another in Naples.

"A lot of it is preventative maintenance," Berry Marshall, regional president of MarineMax on Florida's west coast said. His father started the business in Clearwater 25 years ago. "Like with your car, if you get the oil changed it's going to last longer."

In the second quarter of fiscal 2007, MarineMax's revenue was $325.1 million, compared to $233.3 million during the same time this year, a 28 percent drop in revenue, according to news reports.

To combat the idling economy, MarineMax has stepped up some services. "So many businesses we see are cutting back services," Mr. Marshall said. "We're the exact opposite. We're trying to raise the bar." The company continues to teach free lessons with the purchase of a boat and offers lifetime refresher courses. It also hosts free seminars such as "Women on Water," a docking class for female skippers.

The company also appeals to boaters with a "Getaways" program of excursions planned for customers. As many as 20 or 30 boats travel flotilla-style to nearby destinations such as St. Petersburg, Marco Island and the Keys. To keep costs to a minimum, many Marine- Max Getaways are kept to one day, and boaters cruise at lower RPMs to save gas. "We're probably doing six to10 trips per week" among the company's Gulf coast locations, Mr. Marshall said.

For MarineMax, the negative effects of the economic plunge have been relatively mild. "Our business has taken a downturn, but not a big one," Mr. Marshall said. "People who want to enjoy boating in Florida still go boating," even if they have to take shorter trips.

Caloosa Isle Boat Sales and Service sells new and used boats from locations in Naples and Cape Coral. Owner Tom Cullen started the fractional ownership Caloosa Isle Yacht Club last month as a way to diversify. Club members pay a monthly fee to have a boat at their disposal, without having to worry about the hassles of ownership, such as insurance fees, storage or maintenance. "It's geared toward addressing people's lack of time to care for the boat and trying to highlight the pleasures of being on the water without the responsibilities," Mr. Cullen said.

On the positive side of boat sales in these tough economic times, marina owners say big boats are selling better than smaller ones. "For some reason, boats over 60 feet seem to be selling really well," Mr. Hanson of Salty Sam's said.

Election helped

For some marinas, the stock market collapse and the presidential elections both halted business abruptly, but temporarily.

"When the banking crisis hit the news, it was just like people were watching hurricane coverage on The Weather Channel," said Mr. Cullen. But things improved. "As we got into the week just before the election, we saw buying activity increase. Since election day, we've seen another increase in activity.

"I guess the certainty of the election — regardless of the winner — has helped some people."

Mr. Cullen added, however, that the bailout package Congress passed in September hasn't helped his customers obtain credit to purchase boats. "Many of our buyers finance their purchases, so that money is supposed to be providing liquidity," he said. "It is supposed to help the banks finance the end users."

Salty Sam's partner Mr. Hanson said he hasn't seen the banking crisis or the bailout package affect business — at least not immediately. He said fuel prices that dropped from near $5 in September to $2.67 last week, and beautiful weather, have spurred boaters onto the water.

But he agreed electing a president was good for business, because boat purchases might have been put on hold while people weighed the candidates. "I talked to a lot of people in the industry at the Fort Lauderdale Boat Show," he said. "There's been a consensus that the election did alleviate some of that uncertainty. No matter who they were for or against, I think people are relieved to know where we're going now."