New figures published by British Marine, the trade association for the UK leisure, superyacht and small commercial marine industry, highlight the number of British marine businesses reporting an increase in revenue sinking to 22%, 10% less than November 2018. The new figures also show static profit margins for marine businesses, with just 6% of companies enjoying an increase in profits, 6% less than November 2018. Business confidence within the sector is at its lowest level since autumn 2016.
Domestically focused UK businesses, especially marine services, continue to experience flat markets with 7% of companies experiencing an increase in revenue over the last six months. The domestic market has previously benefited from Brexit, with a weaker pound seeing more Brits holidaying at home. However, the continued political uncertainty has started to take its toll on consumer confidence, causing a reduction in leisure spending.
Prices in hire and charter boats have dropped significantly since last summer with only 28% of businesses increasing prices compared to 52% in 2018. With less customers out on the water, businesses are competitively slashing their prices resulting in hire, charter and passenger boat prices dropping to their lowest level in over five years. Whilst hire, charter and passenger boat services saw a rise in the number of businesses reporting increased revenue and profit (following the recent drop in business outlook, revenue and profit sentiment in the summer of 2018) these figures are still in negative net balance.
Meanwhile, brokerages are contending with reduced activity, as well as reduced stock due to the value of the pound and low domestic demand. Fleets of boats based in the UK have reduced due to an increase in overseas sales and ‘End of Life’ (when vessels are no longer used or have been abandoned) challenges – while price competition is further driving down sales revenue.
Lesley Robinson, CEO of British Marine, said: “These latest sentiment figures highlight the current risks to the long-term growth of the industry. Whilst Brexit uncertainty and a potential recession are factors completely out of our control, increasing participation is not. It is crucial that the industry turns its focus to attracting new customers both old and young from a variety of backgrounds. Building the future generation of boating enthusiasts is key to the future sustainability of the industry.
“As part of this, the industry needs to adapt to the changing consumer buying habits and embrace new business models that are successfully transforming other sectors.”