Challenges ahead for UK marine industry

UK trade association British Marine today released its latest sentiment figures on the UK leisure, superyacht and small commercial marine industry ahead of next week’s Southampton International Boat Show.

According to the findings, only 22% of marine businesses in the UK reported an increase in revenue – 10% less than in November 2018 and 15% less than the pre-Brexit high five years previous.

The 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 said to be at its lowest level since autumn 2016.

The findings come from a survey that was completed by 135 British Marine members, resulting in a 10% response rate.

“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,” says British Marine in a statement. “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.”

The findings also show that 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,” says British Marine.

“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’ challenges. Price competition is further driving down sales revenue.

Lesley Robinson, CEO of British Marine, says: “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. We are working with an array of partners at the Southampton International Boat Show 2019, powered by Borrow a Boat, to incorporate this change. This includes our collaboration with the title sponsor Borrow A Boat to get over 10,000 people out on the water throughout the 10 days of the show, helping to shape the future of the industry.”

British Marine has over 1,500 members drawn from both seagoing and inland sectors and represents an industry which employs more than 33,000 people in the UK. In 2017/18, direct revenue from the industry grew by 1.7% to £3.17bn, directly contributing over £1.1bn of Gross Value Added to the UK economy.

The 2019 Southampton International Boat Show will be held from September 13-22. The theme this year is accessibility and inclusivity.