OCCUPANCY AND SLIP RATES IN NORTHWEST MEXICO: 1999-2001

N o r t h w e s t M e x i c o M a r i n a M a r k e t A n a l y s i s 1 7

III. EXISTING MARINA DEMAND IN NORTHWEST MEXICO

This section of the report assesses the existing marina demand in Northwest Mexico by reviewing occupancy and slip rates trends in existing marinas in Northwest Mexico during the past few years, arrivals of boats in Northwest Mexico during the past decade, and growth in boat registrations in the western United States during the past five years.

A. OCCUPANCY AND SLIP RATES IN NORTHWEST MEXICO: 1999-2001

Overall, there are 2,600 slips in the marinas in Northwest Mexico. Growth of the marina inventory has proceeded slowly since the development of the first marina in 1976, with much of the most recent growth occurring during the economic boom of the mid 1990’s. Very little new near-term marina development is planned in the region. To assess growth in demand within the current inventory, we researched occupancy rates and slip lease rates for the past three years. Essentially, both occupancy rates and slip lease rates have been stable during the past three years, with increasing weakness during the past year. This does not indicate strong demand for new facilities. Occupancy rates have generally approached 90 to 95 percent in the peak season for the past three years, and have dropped to about 60 percent in the off-season. This most recent off-season showed some weakness compared to the previous years. Slip lease rates vary widely in the region, with peak season rates between 8 and 21 per foot, and off-season rates about 25 to 40 percent less. These rates are unchanged from the previous years. Bookings are now underway for the coming peak season. Based on our interviews with marina managers and related research, it appears that the marinas in Ensenada and Cabo San Lucas have recorded the best recent market performance, because they are located in areas of strong demand. Marina management is a difficult, demanding, highly competitive business. Since boating is a major discretionary expenditure for a high income clientele, successful marina management is based on providing a high level of personal service to marina occupants. Because the financial performance of marinas closely follows economic cycles, marina managers must be able to adapt rapidly to changes in the economic climate. Our interviews revealed that many marina managers in the region are preparing for a more difficult economic climate during the next two to three years, and are focusing on attracting larger boats to increase income.

B. BOAT ARRIVALS IN NORTHWEST MEXICO: 1993-2001