The yachting, marina and maritime industries are highly decentralized and fragmented markets. There are very few large players or investors in the market; furthermore, there are limited markets where assets are openly traded. Information resides with operators, staff and industry workers; the investment community has limited access to centralized information. There is limited sophistication with respect to pricing models, in this specialized industry with limited supply. Unlike a traditional bond, equity or even commodities market where we see higher supply of lower priced, “homogeneous units” – the yachting, marina and maritime industries are comprised of higher priced / lower volume “differentiated units.” The result is an inefficient market with wide bid/ask spreads. It is a complex industry that spans many geographic jurisdictions and countries; a true international industry providing service to a limited group of high wealth individuals. With asymmetric knowledge and information flows in a market, there is a built-in advantage for the experienced industry and market players.
The Yacht-related marina market revolves around the provision of berthing facilities for yachts whether the yacht is in transit or moored in its home port. A marina provides a home port location for each yacht; a base to operate the yacht during the cruising season. While in transit away from their home port, yachts depend on marinas located along the migration route or in key cruising grounds as temporary resting points. The home port or transient marina provides a safe haven for each yacht and a place for the crew to rest, relax and service the yacht between excursions. Crew satisfaction and enthusiasm for any particular marina are critically important as the crew often determine where the yacht will spend its down time. These resting periods represent the time when the yacht is spending much of its budget on fuel, water, electricity, supplies, provisioning, chandlery and other critical support.
Traditionally marinas have been small family or municipally run operations that often transcend multiple generations. Certain independent operators may have exceptional service delivery; many of the best marinas in the world provide world-class service. While these marinas set the standard, others struggle to provide the minimum acceptable facility or service levels.
Certain owner classes underestimate the complexity of managing marina operations and attempt to go it alone. They end up with under-performing assets that provide sub-optimal service to a very demanding clientele. Like any luxury hotel, a well-run marina requires well defined operating and customer care protocols. A high performing marina also demands industry involvement and outreach; many owners are unprepared or unwilling to provide, thus an asset that requires industry interdependence becomes isolated.