The Effect of Fuel Prices on Marinas

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Most people believe that the days of “cheap gas” are over.  Some of the reasons include demand from China and other developing nations, the perception that the oil reserves in the Middle East are running out and an increasing dependence on foreign oil, to name just a few.

Fuel Prices ChartHigh fuel prices are causing difficulties for some types of marinas whereas others are virtually unaffected.  Sailboat-only marinas are virtually unaffected by high fuel prices as are yacht and super-yacht marinas.  Powerboat-dependent marinas, however, are feeling the effects of high fuel prices in the following ways:

  • New and used powerboat sales demand declines with high fuel prices.
  • Trip lengths decrease and fewer trips are taken, thereby shrinking the “trade radius” of powerboat-dependent marinas.
  • Another spin-off effect of decreased trip length and number is that there is a lower demand for boat repairs, which can increase parts inventory and make it more “expensive” to keep qualified labor on staff.  There is more pressure put on outsourcing, although since skilled tradesmen are hard to find, this may not translate into much outsourcing.
  • Yet another spin-off effect is that transient demand may be adversely affected.  Boats that are stored off-site may not even make it into the water, thereby decreasing transient demand.  Perhaps they may stay shrink-wrapped during the prime boating months and miss the season entirely.
  • Powerboat users spend more time at the docks and less time cruising.
  • High fuel prices tend to increase in Spring/Summer due to greater vacationing demand.  Unfortunately, this coincides with most of the peak season for marina slip demand.
  • Curiously, there may be more demand for certain amenities and businesses at marina as a result of powerboaters spending more time at the dock.  This may be offset by the loss in slip income and other business income from vacant powerboat slips, however.

Already this is affecting slip occupancy.  Many of the powerboat and partial powerboat marinas I have visited have seen a slight decline in occupancy as a result.  If this becomes a prolonged multi-year phenomenon, powerboat marinas will likely try to lure sailboat slip renters away from sailboat marinas, thereby putting more pressure on slip rental rates.  Time always tells.

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