Successful Boat Clubs Boost Activity and Other Profit Centers for Marinas

Boat clubs have been around since the 80s but in recent years have seen an increase in popularity among consumers. Memberships are increasing and clubs are increasing fleet sizes. Offering an effective way for new boaters to get out on the water (or old boaters who don’t have time or don’t want the hassle of full ownership) to get out on the water. Boat clubs and sharing/leasing programs are becoming more popular with a younger generation of boaters. These clubs can become a viable part of many marina’s operations, despite a negative perception by some in the industry. Marina operators and dealers are finding that boat clubs and their membership base can in fact be positive, adding revenue to the bottom line, not a deterrent for new boat sales or long-term slip leases.

Sam Chavers, regional manager for Suntex, West Florida, said that the addition of a Freedom Boat Club at Suntex’s Marina Jack in Sarasota, Florida, was a very positive addition and has had many benefits. He said that while several boat clubs were interested in the marina, there was also a perception within the industry that these clubs may disrupt marina operations, which caused Marina Jack to enter in the boat club world with some hesitation. Once Freedom Boat Club did enter; Chavers said, “It has been a win-win ever since.”

Changing Perceptions

The program started with only five boats at that location, and the fleet has grown to nearly 50. Chavers said that although perceptions that these clubs compete with other marina operations, that was not the case at Marina Jack. The marina also operates boat rental company at the marina that has not been negatively impacted by the presence of the boat club.

“So that is a testament that they are not in competition with boat rentals, not in competition with slip rentals. They are actually an ancillary service and an introduction to boating. It helps us all,” Chavers said. The boat club does not do rentals and in fact refers customers over to the rental business on a regular basis. The rentals can be an introduction for new boaters and can act as a stepping-stone to club membership once renters get hooked on the boating lifestyle. Chavers also said that the club acts as an introduction to boat ownership, which helps eventually sell slips when those part-time boaters go full-time with their own boat.

Chavers said that Suntex’s business model is “business breeds activity,” and club presence has increased marina activity, resulting in a positive impact on the marina. He explained that club-owned boats are utilized by a wider group of members and far more frequently than a boat with a single owner and as such the marina is exposed to a much wider customer base. Both club members and their guests frequent all the marina’s offerings from the fuel dock to the restaurants and stores. These customers vary from day to day, giving the marina a much wider exposure and greater activity than if it was frequented by boat owners alone. As a result of the club’s presence, traffic has increased at the already bustling marina, Chavers said, without disrupting other operations or profit centers. Limited by available dock space, Marina Jack is about at capacity with the current Freedom Boat fleet.

Growing New Boaters

Freedom Boat Club at Marina Jack has been such a positive experience that Suntex is partnering with Freedom to enter other Suntex marinas, and by doing so, club members can benefit from boating in more areas. Suntex also has its own successful company-owned boat club, located in various marinas in its portfolio. “I think it is very positive thing for our industry. It gives them a point of access to the water, which we hope is contagious,” Chavers said. He believes that giving a wider means of access to the water and the boating lifestyle in general is vital for the growth of the industry, and boat clubs offer a means to do so with a customer that might not have found a place at the marina before.

Travis Staats, the marina manager at Camachee Island Company in St. Augustine, Florida, agrees that the boat club presence at his marina has increased exposure for the facility. The marina has had to make some increases in staffing, when fuel sales increased, to the point, Staats said, that they now have to staff the fuel dock “like it is transient season during all seasons.”

According to Staats not only fuel sales have increased. The marina moved to capture some of the additional market potential of the club members and their guests in a new small retail shop operated by the marina. Focusing on an assortment of drinks, snacks and island apparel, the store had only been open a short time, but was already bringing in decent revenues, Staats said.

He also said that the boat club opportunity was not something Camachee Island Company actively sought. However, with a club that started at four boats and has since grown to 30, the marina expanded its dock to accommodate more club boats. In the future, Staats hopes to add more dock space and office space to help with the increased boat club traffic.

The clubs have been so successful for John Giglio, president and CEO of Freedom Boat Club, that he is now acquiring marinas to house new boat clubs.

Freedom Boat Club can be found in 135 different marinas around the country – all of them different in various ways. Large marinas such as Marina Jack have the benefit of prime location with great exposure, but Giglio said that the sweet spot for his club are smaller marinas with 20 to 50 slips. If the boat club takes up 20 to 30 of those slips, the revenue generated from those slips, which operate generally at a ten-to-one member to boat ratio, is tenfold greater than revenue generated from a single boat owner. Giglio said that those numbers make marina acquisition attractive to banks potentially financing the purchase.

Although many marinas will work well with boat clubs, Giglio said some high and dry marinas may not be a good fit. He explains that because club boats are used so frequently, the forklift would be working constantly to keep up with the added demand of club boats. He said dry storage facilities could make better use of boat clubs with some slips where club boats could be staged, reducing the forklift workload. He said areas with limited water access and slip availability, such as those in Boston and Cape Cod, are particularly good markets for boat clubs and have typically been success stories, where less water access is available for customers.

Different Kind of Customer

In selling the boat club concept to a new marina, Giglio said many times his company has to educate marinas. The biggest comment he gets: “We already have a rental operation or a boat dealership, and we think it is competition.” Boat clubs have shown to do the opposite. Clubs don’t do daily rentals and the potential club member is a completely different customer from one looking to purchase a boat, Giglio said.

Another stigma is that club members are not good boaters. Giglio said Freedom Boat Club has a comprehensive training program that its members are required to take. The result is an extremely robust safety record. He said last year, they had 186,000 boating outings with only 14 instances that needed reporting to insurance.

Boat clubs can also be good for boat sales. After the Venice Marine Max dealership agreed to rent four slips to the club with much skepticism and very unhappy salespeople, within the first week Freedom Boat Club walked one prospective member to their salesman and sold a boat.

Giglio said the club sells one membership for every 10 leads it gets. That leaves nine other potential boaters, who might want to purchase instead. Giglio said he strongly believes in “education and bridging that partnership.” If a potential customer is not a good fit for club membership, he wants to get that boater where he or she will be happy, boat rental, purchase or something else. More and more clubs are a good fit for new and younger boaters, and clubs can help marinas reach more customers.