Boating, and luxury boating at that, is a hobby of a consumer market segment with well above average disposable income. While most hobbies with large followings have seen entire industries and large corporations develop to serve those partaking in most hobbies, boating has not. Golf has ClubCorp, a billion-dollar corporation that probably owns the golf club near you. Camping has REI, a 2 billion corporation where almost every camper is a member. Fitness has Lifetime and 24 Hour and Gold’s - to name only a few of the household brand names where the fitness consumer can find a place to sweat. Boating, with all the maintenance and ancillary services that are required, has no dominant player when it comes to the marina business.
Marina Management Is a $5 Billion Fragmented and Underserved Market
KALY entered the $5 billion fragmented and underserved marina management market sector earlier this year when it acquired Wave Marine & Yacht Services as the first acquisition in a comprehensive roll-up strategy. Roll-up targets include boat service firms such as KALY’s second acquisition Florida Marine Power Company. KALY is aggressively pursuing additional acquisitions now.
$35 Billion Collateral Market Opportunity
As a fragmented and underserved market sector, marina management services are not only a good standalone investment opportunity, but the center of a much, much larger strategic bigger picture opportunity. For instance, the yacht sales market has a retail market value in the United States alone of $35 billion. KALY has already entered the secondary yacht sales market space announcing just last week an exclusive agreement with SYS International to provide yacht brokerage services.
$100 Trillion Underserved High Net Worth Individuals (HNWI) Market
Luxury boating is really more than just a hobby, it’s a lifestyle. It’s the lifestyle enjoyed by the world’s High Net Worth Individuals (HNWI) population and the HNWI population is not only growing but the wealth controlled is getting bigger. Accordingly, boats are getting bigger and those boats replaced for larger boats are driving a growing secondary market for luxury boats. Capgemini expects HNWI wealth to surpass $100 trillion by 2025.
Untapped Real Estate and Ancillary Service Potential
KALY is beginning with marina services and yacht brokerage services. A roll-up strategy presents a rapid growth opportunity to corner the market as a dominant player. The potential to build upon where KALY has started is limited only by your imagination. KALY’s balance sheet could also grow rapidly on the asset side with the future inclusion of owning marina real-estate. The ancillary marina services from restaurants and cafes to concierge services of all sorts has the potential to outpace the core marina services revenue. Stay tuned and see what we have in store for the future. In the meantime, look around our strategic plan overview site and learn more about where we are today and were we expect to get to next.