Bulletin 457 June 1974 CONTENTS Page NEED FOR STUDY OF MARINAS . . . 4 METHOD AND SCOPE OF THE STUDY ........... 5 7 Facilities of Marinas . Locational Factors ----- . . Seasonal and Temporal Aspects Type of Ownership and Labor Requirements Financial Characteristics of Marinas U se of Advertising .------------ -------Customer Compliments, Complaints, and Business Problems Water Pollution Prevention IMPACT OF ENERGY CRISIS- 9 11 12 12 17 18 19 - 20 21 SUMMARY--APPENDIX-- 25 FIRST PRINTING 3M, JUNE 1974 Auburn University is an equal opportunity employer. Marinas in Alabama* GEORGE R. GARDNER and E. W. McCOY** BOATING BOOM had its beginning with economic prosperity that followed World War II. This period of prosperity has continued to the point that today ownership of a motor powered pleasure boat is within the economic reach of the majority of American families. As a result, boating is now one of the most popular and most important recreational activities in the United States. Pleasure boating is especially popular in states like Alabama that are blessed with abundant water resources. The full recreational and economic impact of boating is now occurring in Alabama, which has nearly a million acres of recreational water and a nearly year-round boating season. Boat ownership data reveal that increasing numbers of Alabama families are purchasing boats. About 1 family out of 12 owned a pleasure boat in 1960, but by 1970 this was up to 1 for every 7 families. Boat registrations reached 150,000 in 1978, and the number continues to increase, Table 1. Before the energy shortage became apparent, State officials in charge of boat registration predicted a 6 to 7 percent annual increase in registration through at least 1980. Thus, boating and related businesses are of economic importance to Alabama and this importance is likely to grow. SThis study was conducted under project Hatch 299, supported by State and Federal funds. ** Former Research Associate, Department of Agricultural Economics and Rural Sociology, and now Graduate Assistant, Department of Rural Sociology, Cornell University; and Associate Professor, Department of Agricultural Economics and Rural Sociology, respectively. The authors express appreciation to the many Alabama marina owners and managers who provided information for the study. Special appreciation goes to Kenneth Likis for his assistance in preparation of the manuscript. THE PLEASURE 4 TABLE 1. ALABAMA AGRICULTURAL EXPERIMENT STATION 1970 BOAT OWNERSHIP AND POPULATION TRENDS IN ALABAMA, 1960 TO Item 1969 1970 Percentage increase 1960-70 Percent 5.43 90.67 10.71 Total population Boats registered Total families Families per boat . Number Number 8,266,740 3--------------------------3,444,165 65,929 125,712 790,017 874,659 11.98 6.96 Source: U.S. Census and Alabama Department of Conservation and Natural Resources. Tourism. and recreational travel are big businesses in Alabama, ranking third behind manufacturing and agriculture in terms of employment and income in 1973. Outdoor recreation is the heart of Alabama's tourism industry, and water based activities are the most popular (swimming, fishing, boating, and water skiing in that order). Use of a boat is essential for two of these activities, of course, and fishing is often done from a boat. Thus, three of the four popular activities involve boating. Boating and related activities are projected to increase greatly between 1970 and 1980, according to the 1970 Alabama Statewide Comprehensive Outdoor Recreation Plan: water skiing will increase 148 percent, boating 96 percent, and fishing 37 percent. NEED FOR STUDY OF MARINAS Many Alabamians who participate in boating, water skiing, or fishing patronize water-oriented marinas for such services as boat storage, rental, or launching; purchase of boat fuel, oil, equipment, and bait and tackle; boat and motor repairs and maintenance; and various other goods and services provided by such businesses throughout the State. Since little was known about marina businesses in Alabama, the Auburn University Agricultural Experiment Station team of economists engaged in comprehensive outdoor recreation planning studied water-oriented marina businesses to determine: (1) location of marinas throughout the State; (2) services and facilities available to the boating public; (3) business problems peculiar to the industry; and (4) land, capital, and labor resources required for establishing these businesses. The relative magnitude and importance of boating and marinas in Alabama is indicated by data collected. In 1972, at least 450 MARINAS IN ALABAMA 5 water access areas with boat launching ramps were open to the public. These included some 350 marinas, fishing camps, and resorts. About 125 businesses, some of which also serve as marinas, sold new boats. Most business facilities located at water access areas across the State were privately owned and operated, although four large marinas were operated by municipal and county governments. With the demand for marina services and facilities growing with the rapid increase in percentage of families owning boats, private and public investment in marinas is expected to also increase. In fact, the demand for boat facilities is increasing even more rapidly than new boat registrations. Since Alabama has become more urban, more families are living in apartments or other dwellings which lack the space to store a boat. Thus, a larger percentage of boat owners are potential customers of boat storage facilities. Current information regarding marina businesses is necessary so that proper decisions regarding private and public investment in additional facilities can be made to help assure success of such businesses. METHOD AND SCOPE OF THE STUDY For purposes of this study, a marina was defined as a privately owned water oriented business with at least the following facilities: (1) a boat launching ramp, (2) marine gas and oil, (3) a dockside fuel pump, and (4) either wet or dry storage areas for boats of at least 16 to 20 feet in length. In 1973 there were about 50 such businesses in Alabama, Figure 1. In addition, there were about 100 "fishing camps" which had some, but not all, of the mentioned facilities. At least four marinas were owned and operated by municipal and county governments, but these were not studied since government operated facilities were not within the scope of this study. A questionnaire was designed and administered to obtain financial, managerial, seasonal, locational, and facility information from owners or managers of virtually all Alabama marinas in 1973. All personnel interviewed were cooperative, but inadequate business records prevented some from providing all of the desired information. Therefore, the number of marina operators responding to various questions differed. 6 ALABAMA AGRICULTURAL EXPERIMENT STATION FIG. 1. Location of marinas studied in Alabama. MARINAS IN ALABAMA FIG. 2 All marinas included in the study maintained a boot launching ramp. Facilities of Marinas A )road rnge of 1boa)tin g and relatedl facilities wxas main tained1 bymarina owxners. All marinas inlulded in the stiidx adl boat launcihing rampjs, marine gas andl oil sales, do~cksidle fuel ptumps, either wxet or dIr\ storag~e areas for boats, andi rest rooms. A maijoritx also offered b oat rental, b~oat repairs, motor repairs, bex erage sales, fishing tackle sales, grocery sales, and p( icllic tables for the use of customers, Appendix Table 1. FIG. 3. Gas and oil sales for boats was an important business of marinas. 8 ALABAMA AGRICULTURAL EXPERIMENT STATION FIG. 4. A majority of the marinas studied affered boots for rent. Abouit one-third of the operators of marinlasstiie1 offered dry storage facilities. Axv(rage capacity of such facilities was about (10 lboats as shoni below: Facilities D rv storage 1)11ilin gs \4e stiorage (locks -_ hunt camping spaces Trailr ti.(MOfljfl g spaes -- A tinge )ioil)r of units Pi cic tab les 60.6 57.0) 50.9 :36.7 16.6 6.5 boats hoats tents traies taleis unlts 4.5 units Bica laonuebiitg runmps 1.8 ramps About 4:3 percent of a1]l marinas stud iedl maintained w storxet age (locks tfor lboats. Axverage capacitx wxas .57 b~oats. Abou t half of the mnarinats had ltodgin g facilities o~f sonic type. Alt!hough foulir operated motel on its, hotokups for camnig trailers wxere the motst coilmon1)1 ty pe o~f Ildgin g faci litx proxvided. The exact comnlationl of facilities antI serxvices offered lbx each p~articlular matrina bulsiness wxas dletermned lbx location MARINAS IN ALABAMA 9 and type of clientele, as well as previous experience and financial resources of the owners. Almost all managers interviewed had recently added new facilities and services or had discontinued facilities and services provided the previous year in an effort to obtain optimum results. The average marina in Alabama occupied just under 7 acres of land. All managers interviewed reported that they owned the land occupied by the marina. In addition, the managers reported owning an average of 5.3 additional acres adjoining their marina site not currently used for the business operation. Fewer than half owned unused land, however, and about 55 percent of the managers reported they utilized all of their land. Thus, most marinas could not have expanded such facilities as dry storage sheds or parking lots without the acquisition of additional land. Seasonal and Temporal Aspects Marina businesses, like virtually all outdoor recreation enterprises, experience highly seasonal business cycles. Most American families take their annual vacations during the summer months while schools are not in session. Most fishing areas in Alabama are at their best conditions for anglers during spring and summer. It is logical to expect that demand for facilities and services offered by marina businesses should reach a peak during the summer months, and data provided by the marina managers confirmed this observation. When asked to name their most active business months, every marina manager listed both June and July among the busiest. However, only 78 percent listed August and half listed May. Marinas used mainly by fishermen experienced an earlier season, with business increasing sharply in March and April. The same firms also tended to have considerable business during the early fall months. Marinas used mainly by boaters engaged in water skiing and pleasure boating experienced a sharp business increase the last week in May (when the school term ended) and a drastic decrease in activity the week after Labor Day (when the school term commenced). The most notable exceptions to the general seasonal pattern were the marinas located on the Gulf Coast. These firms experienced considerable demand for their services during the late fall months when off-shore fishing in the Gulf of Mexico is often 10 ALABAMA AGRICULTURAL EXPERIMENT STATION at its best. Many of these marinas also reported sales to transient boats passing through on the way to Florida for the winter season. The American concept of "the weekend" is unique throughout the world. In most modern nations, leisure time and outdoor recreation are associated primarily with national, regional, and religious holidays. On the other hand, Americans are often thought of as working hard during the 5-day work week and playing hard during the 2- or 3-day "weekend." This pattern of recreational habits was exhibited by customers of Alabama's marinas. About 95 percent of marina managers reported that half or more of their business was on weekends, as shown below: Percentage of business occurring on weekend 25 to 49 50 to 74 75 to 100 ....Percentage of firms 4.8 52.4 42.8 No manager reported that less than 25 percent of business occurred on the weekends. Operating hours of marinas varied considerably, both from firm to firm and season to season. Some managers reported being open for business 10 hours per day during the "busy season," and about 13 percent stayed open 24 hours per day. The average for all marinas was 14 hours per day during the busy season. All marinas open for business 24 hours per day had managers who resided on or near the premises of the business. Virtually all managers reported reduced business hours during the "slack season," but only three said they closed. The marinas that operated during the slack season were open over 11 hours per day. Marina managers ranked external factors (those beyond control of management) according to relative importance in affecting demand for services of the businesses, Appendix Table 2. General weather conditions were the most important factor influencing marina sales. Many managers said actual weather conditions were not as important as predicted weekend weather. Marina customers generally monitored weekend weather reports during the latter part of the week, and decided at that time whether they would go boating during the following weekend. If alternative plans were made because of predicted unfavorable weather, fair weather on Saturday or Sunday did not attract these potential customers to the marina. This was especially true for customers who had to travel relatively long distances to reach the marina. MARINAS IN ALABAMA 11 Locational Factors By the definition used in this study, a marina must be located adjacent to a body of water used by boaters. However, many locational factors - both natural geographic features and manmade alterations such as roads - determine whether a marina business occupies a favorable location. Locational factors such as access by automobile, access by boat, prevailing wind conditions, and strength of water current are difficult to quantify. Furthermore, locational advantages and disadvantages of a business site may change over time, regardless of business management. For example, a new highway or bridge may increase or decrease access to a particular marina relative to a competing business. Thus, once a marina has been established, future locational factors are difficult to predict and are usually beyond the control of the business owner. Most of the marinas studied were located on isolated rural roads, and a few could be reached by automobile only by traveling on unpaved roads. While some marinas were located near important highways, few were ideally located for ease of access by both boat and automobile. Generally, location of the business with respect to boat access was not as important as its automobile access. About two-thirds of the marina managers interviewed estimated that no more than one-fourth of their total business was derived from customers that arrived at the marina by boat, as shown below: Percentage of customers arriving by boat 0-25 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 6-50 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Number of firms 23 6 5 1-75 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6-10 0- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 2 Marina managers were asked to estimate the origins of their customers according to whether they: (1) rent boat storage spaces, (2) purchase fuel and oil, (3) use the boat launching ramps, or (4) purchase groceries and other sundry items. A general pattern was discernible based on the estimates of the responding managers. In general, customers who rented boat storage spaces lived the greatest distance from the marina. Many such customers typically resided in relatively large metropolitan areas, and stored their boats at a marina rather than trailer them to the water each time they went boating. Excluding those who rent storage space, most customers who purchased fuel and oil 12 ALABAMA AGRICULTURAL EXPERIMENT STATION from a given marina were either owners of recreational (or permanent) homes in the immediate area (within several miles) or persons vacationing in motels and resorts near the marina. Customers trailering boats to a marina for launching each time they used the boat tended to be intermediate in origin, often residing within a 25-mile radius of the marina they used for boat launching. No general pattern was apparent for customers who frequently purchased their groceries and supplies at a particular marina. Type of Ownership and Labor Requirements A majority of the marina businesses analyzed (56 percent) were organized as single proprietorships. One-fourth were corporations and the remaining 19 percent of firms were organized as partnerships. About one-fourth of the marinas in Alabama were basically oneman operations. These small marinas were generally owned by an individual who resided on the premises of the business establishment. The single owner-manager often used the labor of his family, employing additional hired labor only during the peak summer months. Managers of marinas of this type reported they required no more than 4,000 man-hours of labor per year (including their own) to maintain their business, Appendix Table 3. The average firm in this category provided full-time employment for less than one man (0.8 man), and part-time or seasonal employment for two additional workers. Nearly half of the studied marinas required between 4,000 and 8,000 man-hours of labor annually. Many firms in this category were not much larger in terms of storage facilities than the smallest marinas, but they had boat and motor repair enterprises which required more full-time hired labor. Marinas in this category employed an average of nearly two full-time employees and almost four part-time and seasonal employees. The remainder of the marinas studied employed more than 8,000 man-hours of labor annually. Firms of this size usually provided full-time employment for 5 to 10 men, and part-time or seasonal employment for 4 to 6 additional workers. Financial Characteristics of Marinas Each marina in Alabama represented an average capital investment of about $191,000, Appendix Table 4. However, capital MARINAS IN ALABAMA 13 inxvestment ranged from $30,000) each for several small marin~as to wxell oxver $2.50,00(0 each for a few of the State's largest. The median wxas ab~out $1.55,00)0. As expected, marinas wxith higher capital investments wer ear ninig larger axverage grouss revcinues, Appen dix Tale 4. Data p)rovidled by m1arinla managers we're ntot sufficient to estimate net profits for 1972, but gross rexvemnic for all marinas studied1 axveragedl about $ 102,000. Marina managers were asked to rex cal which of the firm's business5 enterprises accounitedI for the largest portions of animal gross revenue. The responses xvaried, since not all marinas mlaintainecd the same comblination of enterprises. Of the initerxviexxedl managers xvho ranked the xvarious enterprises ini descendling order of importance, nearly half listed hoat storage as their most iniportant souricc of rxvciue, Appecndix Tal c.5. Geinerally , the secoind most implortanlt source of gross rex enue xxas fuel and oil sales. The nmontly boat storage charges of marinas analxyzed wvere determined largely, by type of storage facilities proxvided, size of boat, and length of the time the b)oat xxas stored. lFor a gixven size boat, charges for dIrv storage wer(e generally loxxer than for xxet storage. Mlost marina managers charged a flat inithly storage fee. To stabilize business income ox er the entire xycar, hoxx ever, managers encouraged b)oat oxxners to rent storage sp~ace on a 12-month annual basis. Managers frequently discounted the charges conisideiraly if boat oxxners leased oin an anual basis. A fewx marina managers based the charge for rental space FIG. 5. Roofed boot docks cost more per unit of capacity than open ones. 14 ALABAMA AGRICULTURAL EXPERIMENT STATION FIG. 6. Floating docks were used on lakes where water level fluctuated widely. oi1 boat len1gth, chargingU al i axerag~e of $1.06 per foot-leligtb for drv\ storage, Afppendix Tale 6. AXv(rage monIN)~ll storage char ges for an 18-foot b oat wereI abou t $D13 for (lix storage and $1.5 tor XX storage. I owevex r, most marina mnlagers indricatedl et that boat storage charges xwoul1( in crease do 11 g the comning season. B~ecauIse a marina mu ist be) located onl wXatelrron t propertx, site purchase wxas often the largest cap~ital ex~pense invXol\ ed in estab lishmeii t of the bulsiness5. Ax erage v aloe of land~ occupied bhx the studlied marinas was overV $7,2(4) per acre, and1( the axverage marna occupfied abhot 7 acres. Thus, invxestmlents in real estate of $.0,00 wxere comnmoi . In fact, xvalue of tlhe site for) all marinhas accot iited for an ax (rage of albout 41 perent of the total bulsiness inxestmoent. Land xvalue as a percen~tage of total business investment ranged from ablout 20 percent to (57 percent. The unit cost of boat dlocks xvaried cmisidleralbh , depend inig on xxhether the (locks wxere fixed or floating andr wXhether tbexyXwie roof ed or open. (A unit is (definedi as storage space for one( boat MARINAS IN ALABAMA 15 of 18-foot length or less. ) Floating (locks were usedi on lakes where the water leveli fluctuated considerably, such as Lake Mlartin where water lev el dlroppedl ab~out 15 feet du~ring the wxinter. The axveragre un1it cost of fixedl (docks ( on p)ermnently affixed pilings ) wxas consideraly lower than the axverage unit cost of floating docks. Boat storage (locks had ani axverage xvalue of $531 per unit. Dry boat storage bulildlings maintained by the finrms aniahLed we rc basically of two types: (1) sheds where each boat xxas stored 01n a trailer ( each oxxner remoxves his 1boat by hitchin g the trailer to an aultomlolbile ) or ( 2) large, high-cei ling b~uildihngs xxhere boats were storedI in wxarehouse-ty pe facilities ( b~oats stacked and~ storedl in such facilities could onix be reiln()xd for lauinching bx the use of a large fork-lift mnainitainled and~ operated l)\ the marna buisiniess). Drv storage facilities moaintainied by the firms analyzted had an ax erage unit cost of 8235. The unit cost of xxarehoulse-tx pc storage facilities represented a larg~er initial investmlen t than storage sheds, but most oxxners of such facilities reported loxweur m~ain1ten ance costs. FIG. 7. Warehouse-type storage sheds were more expensive to build but owners reported lower maintenance tcsts for this type facility. 16 ALABAMA AGRICULTURAL EXPERIMENT STATION Charges for the use of boat launching ramps at the marinas studied varied from no charge up to $1.00, as shown below: Launch charge No charge 50 ¢- - - - - - - - - - - - - - - - - - - - - - - - - - - 75 ¢-... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00 --- Percentage of firms 35 15 5 45 . No marina manager reported boat launching charges as a major source of income. Many managers felt that any charge for boat launching tended to discourage potential customers from patronizing their marina because free boat launching ramps provided by the State were often located near or at the marina. When asked to describe their prevailing business trend for the past 5 years, the vast majority of the marina managers (82 percent) reported increasing business during the period. Only 10 percent reported declining business activity, and 8 percent had experienced no change. Most of the marinas experiencing decreasing business were smaller firms owned by individuals who had not been competitive in maintenance and operation. Several marinas that had been in business only about 5 years reported increases of 75 percent or more. Of the firms with an increase in business, over half experienced growth rate of 5 to 24 percent, as shown below: Percentage annual business increase 5 -2 4 25-49 -- Percentage of firms - - --- -- -- -- -- --- -- -- --- ------ 53 19 5 0-74 -. - - - - - - - - - - - - - - - - -. - - - - - - - - - - - - - - - - - . 75 and over------- -T O T A L- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -1 16 12 00 Marina managers were asked to specify unprofitable business activities. No single activity was believed to be non-profitable by more than a small minority of the managers, although 86 percent listed an activity they considered unprofitable, as shown below: Unprofitable activity Number of firms --- Boat launching Fuel sales C a f e -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Grocery sales --5 7 6 6 5 3 Swimming and picnicking B ait sales -. - - - - - - - - - - - - - - - - - - - - - - - - - - .. . ..-- Sale of sundry items Boat rental Issuance of fishing licenses Other activities- 3 2 2 4 MARINAS IN ALABAMA 17 All managers indicated non-profitable activities were maintained only to attract customers who otherwise would purchase needed items or services elsewhere. No manager reported large losses from non-profitable activities; rather, the unprofitable activity was warranted since the net profit of the entire business was increased. For example, users of a non-profitable, free launching ramp tended to purchase bait, gas, and other supplies at the marina providing the free ramp. Use of Advertising Advertising is an important source of new customers and increases sales for many businesses. Some types of businesses use advertising more extensively than others, often depending on the number and behavior of competing firms. Marina managers were asked to describe the extent and types of advertising used by their businesses. Few marina managers advertised extensively. About 78 percent of the firms studied used little or no advertising. Only about 8 percent described their advertising activities as extensive, leaving 14 percent in the moderate classification. At least 16 different advertising media were used by marina managers, with road signs and general circulation newspapers used most commonly, as shown below: Advertising medium Number of managers reporting Road signs and billboards ...... Newspapers (general circulation) 17 16 Radio --Maps of lake Word-of-mouth Telephone directory (yellow pages) Displays at boat shows Television Handbills Boating directories 10 9 7 5 4 4----------------------------3 3 Other 8----------------------------- Spot radio commercials and maps of the various lakes with the marina's location marked were also popular forms of advertising. Nearly all newspaper and radio advertising was done during the boating and fishing season. More expensive advertising media, such as television spot commercials and displays at boat shows, were used almost exclusively by marinas that sold new boats and motors. 18 ALABAMA AGRICULTURAL EXPERIMENT STATION Many marina managers reported special problems with the use of road signs, which were often damaged or removed by vandals. Furthermore, because many marinas were located in isolated rural areas on unmarked county roads, numerous road signs were necessary to provide adequate directions for potential customers. Several marina managers reported their signs were removed by State or county highway department work crews, apparently due to violations of laws governing the location of roadside signs. Other managers said road signs or billboards were needed on interstate highways to attract tourists who are not familiar with the particular lake or business. However, the managers felt they could not afford to construct and maintain large enough signs to be seen by motorists on interstate highways since new business generated by the signs might not cover costs of the signs. Customer Compliments, Complaints, and Business Problems Land, labor, capital, and managerial skills are often thought of as being the most important resources for the operation of a profitable business. In theory, if these resources are used to produce a good or service desired by consumers, and at a price which covers all costs, the business will be successful. However, customer satisfaction is a requirement for success and this depends on many factors. Successful business managers are aware that most customers place a considerable value on courteous, personal service. The customers of Alabama marinas do not seem to be exceptions. When asked which aspects of their business were the subject of compliments from their customers, marina managers reported six different categories, Appendix Table 7. About one-third of all compliments resulted from good service and friendliness of marina employees. However, maintenance of the marina facilities, including rest rooms, ramps, and snack bars, brought the most frequent compliment. Marina managers reported relatively few complaints from their customers. More than half of all complaints received concerned inadequate or poorly-maintained facilities. Insufficient automobile parking space and poor launching ramps were among the facilities included in customer complaints. When questioned MARINAS IN ALABAMA 19 about their business problems, marina managers reported at least six different types, as shown below: Nature of problem Unable to hire dependable employees --Inadequate cash flow------------------------------- Vandalism on premises Variation of water level in lakes Maintenance of outdoor facilities Lack of customers O ther -- -- --- -- -- --- -- -- --- ----- -- Number reporting 16 6 6 3 3 3 9 More than one-third of all managers interviewed said they were unable to hire dependable employees. Many thought relatively low wages and the seasonal nature of marina employment made it especially difficult to hire dependable adults. Thus, many managers hired high school and college students during the peak summer months, some on a full-time basis and others to work during the weekend. Water Pollution Prevention Recent citizen awareness of the relatively rapid deterioration of the environment has been felt by nearly every industry in the United States - from apple production to zinc mining. The boating industry is no exception. The discharge of untreated sewage, fuel, oil, and other water pollutants from pleasure boats is now recognized as a present or potential public health problem by officials in nearly every state. A recent survey by the Boating Industry Association revealed that at least 36 states now have laws governing boat toilets on some or all of their waters. About half of these states permit the use of treatment devices or holding tanks; the remainder require retention systems for dockside pump-out. In 1973, the U.S. Coast Guard, State Health Department, State Conservation Department, and other agencies implemented existing Federal and State laws to require owners of newly purchased boats with toilets to have sewage holding tanks aboard. Boats already in use were allowed to use self-contained sewage treatment systems which meet certain standards. Thus, pump-out facilities for Alabama pleasure boats were necessary for boaters to comply with the law. Marina managers were asked to express their willingness to provide sewage pump-out and holding facilities for the use of boaters. About one-fourth indicated they were willing to install 20 ALABAMA AGRICULTURAL EXPERIMENT STATION pump-out facilities if the demand for them became apparent. On the other hand, about 15 percent of the managers would not construct sewage handling facilities under any conditions. The remaining managers indicated a willingness (but not eagerness) to install boat pump-out facilities if certain conditions prevailed, as shown below: Conditions under which will install facilities W hen necessary ------------------------- -12 Only under "breakeven" financial conditions Only under profitable financial conditions Only if government pays cost of installation Number of firms 9 1 1 Will 1 not install under any conditions N .A . ._.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 .2 7 0 Some managers felt that the question was not applicable as their firms service only small boats without toilet facilities. The willingness of marina managers to provide sewage pumpout facilities seemed to be influenced by location of their business. For example, the managers of nearly all marinas studied on Lake Martin expressed a willingness to cooperate with pollution abatement regulations. This lake, located northeast of Montgomery in central Alabama, was one of the cleanest and most pollution-free bodies of water in the State in 1973. Nearly all managers interviewed in the area seemed to realize that the unspoiled nature of the lake represented an economic asset to their business, and they planned to assist in maintaining the lake in its unpolluted condition. Managers of marinas located on the Gulf Coast generally were not as eager to provide sewage pump-out facilities for the use of their customers. Most of these managers indicated they did not believe that water pollution from marine toilets was a problem. IMPACT OF ENERGY CRISIS Because of the uncertainty of government policies, it is difficult to assess the impact of the current fuel shortage on the outdoor recreation industry in Alabama. Either conservation meassures or gasoline rationing would certainly affect outdoor recreation, both directly and indirectly. For example, should gasoline be rationed through a policy which would restrict marine fuel purchases as well as automobile purchases, marina businesses in Alabama would be affected directly because the sale of fuel is usually an important business activity. The same firms also could be indirectly affected because restricted automobile usage would MARINAS IN ALABAMA 21 limit frequency of weekend boating by marina customers living relatively long distances from the marinas. On the other hand, because the towing of a boat and trailer behind an automobile reduces the gas mileage of the auto, many more boatowners may choose to store their boats at marinas on a permanent basis. Such actions would then increase the demand for boat storage facilities, already in short supply in many areas of the State. Various gasoline conservation proposals were being considered by government agencies at the time of this writing. All recognize outdoor recreation is an important sector of the nation's economy. Thus, if the government must ration gasoline, marina operators are assured that gasoline for boating will not be eliminated entirely due to higher fuel usage priorities. At the time of this study, marina managers could only speculate about overall effects of the energy shortage on their businesses. SUMMARY Boating is a growing outdoor recreational activity in Alabama. From 1960 to 1970 the number of families with boats in the State grew from about 1 out of 12 to about 1 out of 7. Demand for boating should double between 1970 and 1980, while for the related activities of fishing and water skiing, increases of 37 and 148 percent, respectively, are expected. For purposes of this study, a marina was defined as a privately owned water oriented business with at least these facilities: (1) boat launching ramp, (2) marine gas and oil, (3) a dockside fuel pump, and (4) either wet or dry storage areas for boats of 16 to 20 feet in length. In 1973 there were about 50 such businesses in Alabama. This definition eliminated from the study about 100 "fishing camps," at least 4 marinas owned and operated by municipal and county governments, and innumerable other businesses across the State that engaged in boat rental, sales, or supplies. Many Alabamians who participate in water-based activities use the facilities and services of a water-oriented marina. Little information about marina businesses in Alabama was available before this 1973 outdoor recreation study of marina businesses to determine: (1) the location of marinas throughout the State; 22 ALABAMA AGRICULTURAL EXPERIMENT STATION (2) services and facilities available to the boating public; (8) business problems peculiar to the industry; (4) locational and seasonal factors influencing the success of marina businesses; and (5) land, capital, and labor resources required for establishment of a marina business. Most marinas are located where both water resources and proximity to population centers are favorable. The main clusters of marinas located in the study were in the area of Mobile Bay, Martin Lake, Logan Martin Lake, Guntersville Lake, Lewis Smith Lake, Holt Lake, Weiss Lake, and Lay Lake. Marinas were also located along Perdido Bay, Wilson Lake, Wheeler Lake, John Hollis Bankhead Lake, Jordan Lake, Goat Rock Lake, Walter F. George Lake, and the Alabama River lakes. Alabamians use marinas for either boat storage, boat rental, fuel and oil purchases, boat launching, boat and motor repairs, bait and tackle purchases, or boating equipment purchases. Some marinas provide a wide range of other facilities and services, including lodging accommodations, picnic tables, groceries, and snack bars. Marina business is seasonal, with June and July invariably the most active business months. If fishermen make up a majority of the clientele, the third busiest month is May; if families with school age members are major customers, then August is third busiest. Marinas near Gulf Coast fishing water have less business drop in the fall than those located in other areas of the State. During the in-season months, business is most active on weekends. Locational factors that influence marina business include ease of access by automobile, ease of access by boat, strength of water current, and prevailing wind conditions, all of which are difficult to quantify. Few marinas are ideally located for both boat and automobile access. Generally, automobile access is the more important of the two. Once located, however, marina managers have little control over factors (such as road development) that might affect the favorableness of their location. The distance a customer travels to a marina may determine the facility or service he purchases. For example, a customer who lives in the immediate area of a marina is less likely to rent storage space than one who lives far away in a metropolitan area. The majority of marinas in the sample were single proprietorships. One-fourth were basically one-man businesses that used MARINAS IN ALABAMA 23 family or seasonal labor on occasion. Those offering boat repair services needed more employees. About one-third of the managers reported that seasonal nature of the business made it difficult to find dependable labor. Investments ranged from $30,000 to $500,000, with the average being $191,000 and the median $155,000. As might be expected, larger investments brought larger gross returns. Because marinas must be on waterfront property, land purchase was usually the largest single capital expense. Dock costs varied considerably according to the design. Floating docks were generally more expensive than fixed docks, and roofed docks more expensive than open ones. Warehouse-type storage facilities utilizing fork-lift machinery generally cost more to construct than storage sheds where boats were parked on their trailers. However, warehousetype facilities were reported to have lower maintenance costs. Managers listed boat storage as their most important business item; fuel and oil sales were next. No single item was named as being generally non-profitable, although some managers maintained non-profitable items to attract customers who would otherwise purchase all items elsewhere. Eighty-two percent of the managers interviewed indicated they had experienced increasing business over the past 5 years. Seventy-eight percent of the marinas used little or no advertising. Road signs and newspaper commercials were most commonly used advertisements, although some marinas used radio commercials during the summer. Roads signs were used to provide directions for customers; however, managers reported some difficulties in keeping these signs maintained. Only 8 percent of the marinas, generally those selling new boats, advertised so extensively as to use television commercials or boat show displays. Managers reported they received the proper maintenance of such facilities as ramps, and snack bars. Most complaints maintenance or insufficient facilities, such or too little parking space. most compliments for rest rooms, launching arose from inadequate as poor landing ramps Marina managers may be faced with two problems because of environmental measures. The first concerns water pollution. More stringent laws regarding the use of toilets on pleasure boats have created a need for sewage pump-out and holding facilities. The majority of managers questioned could forsee adding such 24 ALABAMA AGRICULTURAL EXPERIMENT STATION facilities if demand warranted it, while 15 percent said they would not provide such facilities under any conditions. The second problem concerns the energy shortage. This could affect the marina business indirectly, in that less gas is available for recreational travel, and directly, in that less gas is available for boating. On the other hand, the demand for storage space could increase if storage proves less expensive than hauling boats back and forth to a marina. If gasoline rationing should go into effect, the proposals under discussion recognize outdoor recreation as a major industry, and thus include provisions of boating in their considerations. Marina managers could only speculate on the effect of a gasoline shortage. MARINAS MARINAS IN INdALBAMA ALABAMA 25 2 APPENDIX APPENDIX TABLE 1. BOATING FACILITIES AND RELATED ENTERPRISES AT ALABAMA MARINAS, 1973 Facility No. of firms No. Percentage of firms Percent Boating Boat launching ramp5010-----------0 Marine gas/oil sales0----0-----Dockside fuel pump --43 ---------Wet storage docks 40 Boating equipm ent sales---------------------------34 Dry boat storage 34 Boat rental -------------------------- 30 Boat repair service ------------------------29 Motor repair service 18 M otor sales----------------- - --------18 Boat sales--------------------- ----------- -16 M otor rental--------------------------Lodging 17 Trailer camping hookups-------------------------12 Cabins--12 Tent camping spaces 4 Motel un its----- -- ----- --- -- --- ---------- --- -- - Other 50 R est room s--------------------------46 Beverage sales Fishing tackle sales44------------33 Grocery sales 27 Picnic tables -------------------------10 R e~stauirants ----------------------- ----- 1------------------00 86 80 68------------------68 60 58----------------36 36 32 34 24 24------------------8 100 92------------------66--------------54 20 APPENDIX TABLE 2. EXTERNAL FACTORS INFLUENCING MARINA BUSINESS, ALABAMA, 1973 FatrFirst Ranking of factor by firms Third Second No. No. 10 17 7 11 --1 No. 27 8 4 3 1 1 General weather conditions----------- Fishing situation-------------------W ater level in lake-----------------C alendar'-------------------------Special events'---------- -----------O ther factors -------------- -------- 8 4 8 9 3 1 1 By calendar is meant the normal passing of the months and occurrences dictated by the calendar, such as completion of the school term. 2Fishing rodeos, boat races, and other specially scheduled events. 26 ALABAMA AGRICULTURAL EXPERIMENT STATION 6 APPENDIX TABLE 3. ALABAMA AGRICULTURLEPRMN OF TTO ANNUAL HIRED LABOR REQUIREMENTS IN ALABAMA, 1973 MARINAS' Average Man/hoursnumber Number of firms full-time employees No. No. .8 12 U p to 4,000 ---------------------------------------4,000- 8,000----------------------------------1.9 24 4.0 3 8,001-12,000 --------------------------------4.3 12,001-20, 000------------------------6.0 5.1 9 M ore than 20,000 ----------------------------------- 4 9.5 6.5 1Includes manager and hired employees who work only at marina; excludes employees who work in restaurants of those marinas with such facilities. Average number temporary employees 3 No. 2.0 3.8 by 2,000. work full-time only during peak business months, and some work part-time only during peak business months. ' For conversion to full-time job equivalent, divide annual man/hours of labor temporary employees work part-time every month of the year, some Some APPENDIX TABLE 4. CAPITAL AND REVENUE OF MARINAS, 1973 Capital investment ogross revenue No. No. irmsAverage firms Number Dollars 5 17,300 82,333 7 110,000 $100, 000 to 13 ------------------$250,000 or more-240,800 6 Average all firms-$191,000 capital investment, $102,183 average gross revenue Less than $50,000----$50,000 to $99,999 $249,999 APPENDIX TABLE 5. BUSINESS ACTIVITIES CONTRIBUTING LARGEST PORTION OF GROSS REVENUES TO MARINA BUSINESSES, 1973 AciiyFirst Ranking of activity by firms Second Third No. 15 8 4 3 3 1 1 No. 5 11 1 4 No. 4 3 3 5 3 4 Boat storage (wet and Boat sales and Fuel and oil sales.______________. dry)________ Grocery and beverage sales____ Rental of lodging accommodations_ Boat and motor repairs Bait and tackle sales__ Restaurant or cafe_______________ Sale of boating rental 3 2 supplies ------------- ---------------------------------------- MARINAS MAINAS IN ALABAMA 27 IN ALA~BAA AVERAGE MONTHLY BOAT STORAGE ALABAMA MARINAS, 1973 CHARGES AT 2 APPENDIX TABLE 6. Type storage Wet storage Open slips: (no roof) Fixed monthly rate Utilities furnished -- -- -- -- --No utilities furnished ---------- Monthly charge Dollars 19.21 15.50 .93 -- -- -- -- - -- -- ------ -- --Other monthly rate (charge per foot-length of hoat)---_---. Covered slips: (with roof) Fixed monthly rate Utilities furnished --------------------------------No utilities furnished --------------------- ---------Dry covered storage Fixed monthly rate------------ - ----------------------Other monthly rate (charge per foot-length of hoat) 31.50 18.40 12.69 1.06 --------- APPENDIX TABLE 7. AREAS OF CUSTOMER COMPLIMENTS AND COMPLAINTS TO MARINA MANAGERS, ALABAMA, 1973 Category Firms reporting compliments Firms reporting complaints No. Service------Facilities-----Repair service Prices ------ -Location ----O ther------ -19 23 No. 17 4 3 2 4 3 4 6 O)E A'_B.APAM2"' 1,Ha.hb~ 1-GM~N U IVFR'TY With an agricultural research unit in every major soil area, Auburn University serves the needs of field crop, livestock, forestry, and horticultural producers in each region in Alabama. Every citizen of the State has a stake in this research program, since any advantage from new and more economical ways of producing and handling farm products directly benefits the consuming public. Research Unit Identification 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. Tennessee Valley Substation, Belle Mina. Sand Mountain Substation, Crossville. North Alabama Horticulture Substation, Cullman. Upper Coastal Plain Substation, Winfield. Forestry Unit, Fayette County. Thorsby Foundation Seed Stocks Farm, Thorsby. Chilton Area Horticulture Substation, Clanton. Forestry Unit, Coosa County. Piedmont Substation, Camp Hill. Plant Breeding Unit, Tallassee. Forestry Unit, Autauga County. Prattville Experiment Field, Prattville. Black Belt Substation, Marion Junction. Tuskegee Experiment Field, Tuskegee. Lower Coastal Plain Substation, Camden. Forestry Unit, Barbour County. Monroeville Experiment Field, Monroeville. Wiregrass Substation, Headland. Brewton Experiment Field, Brewton. Ornamental Horticulture Field Station, Spring Hill. Gulf Coast Substation, Fairhope.