Weymouth charter boat industry on the brink of collapse

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Weymouth charter boat industry on the brink of collapse

April 27, 2020 - 12:25
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Dorset charter boat skippers and the Professional Boatman's Association are currently lobbying the UK Chancellor of the Exchequer, amid fears the industry is on the brink of collapse.

Weymouth's attractive and historic sheltered harbour is an destination for UK divers because it offers access to a huge range of wreck diving.

Berthing Fees Issue

It is standard operating practice for harbours to charge harbour dues and mooring fees. The monies raised are used to cover the cost of managing and looking after the infrastructure of the harbour.

At present the vast majority of marinas are continuing to charge berthing rates at the full price, even though they have been given a 'rates holiday' - they do not need to pay rates for 12 months because of COVID-19. Some private marinas have reviewed their policy because of this crisis.Tor Bay Harbour has offered a three month deferred payment whilst has reduced its annual berthing fees by 50% for its regular customers. Other marinas have suspended all charges all together, including one council-run marina in Swansea.

Weymouth charter boats have lost 100% of their customers, yet Dorset Council are still charging them 100% of mooring fees

All boats berthed at Weymouth Harbour must still pay fees to Dorset Council. There has been no reduction in the tariffs for the resident charter boat companies, despite Weymouth harbour being closed to all non-essential traffic. The decision to close the harbour during the current COVID-19 crisis is sensible. What is not sensible is the lack of relevant consideration on berthing fee charges for charter boats. These companies are still expected to pay 100% of their harbour fees (approximately £2,000 - £3,000 per year), whilst experiencing 100% loss of customers.

Legitimate claims falling through the crack

The Chancellor of the Exchequer has put a number of grants and loans in place to help companies and the self employed during the COVID-19 crisis. This seems to be working reasonably well for those that match the criteria. But there are several instances where legitimate claims are slipping through the cracks because .

We fall outside of the bracket for business rate relief and the government grant - our mooring fees, insurance, coding, etc all have to still be paid - but with no income the company will be unable to survive

Virtually all the charter boat skippers are unable to qualify for the COVID-19 small business rates relief package because vessels do not come under what is considered 'rateable property'. This does not mean the vessels do not pay rates - they pay berthing fees that contribute towards the business rates for the local authority or private marina.

Ben Taylor, owner of told the Dorset Echo newspaper he is facing mounting costs with no income. "We don't have business premises so we fall outside of the bracket for business rate relief and the government grant. However our annual bills continue and cannot be paused. These include private mooring fees in Weymouth Harbour, insurance, coding, life raft hire and boat storage. All have to still be paid, but with no income the company will be unable to survive."

The cost of running a boat

There is a old maritime joke that goes something along the lines of "how can you experience what it's like to own a boat? Stand underneath a cold shower and tear up £50 notes." Charter boat owners will typically spend at least £10,000 per year on maintaining their boat before they even turn the key. (This figure includes many fixed costs, ie insurance, berthing, mooring fees, coding etc. It does not include fuel or salaries). The work tends to be very seasonal because of the weather - Spring to Autumn - therefore the boat owner will carefully manage their cash flow so that they can keep on operating. It is quite normal that at the end of year, a boat owner will look at their income and outgoings and decide how much, or indeed how little, they can pay themselves.

The accountants are advising the skippers they are not eligible for the 80% COVID-19 grant

A charter boat can cost anywhere between £110,000 to buy an to £250,000 to purchase a purpose built dive vessel such as . It is therefore pretty usual for a charter boat to be run as a limited company because it is an efficient way to manage a capital asset (the boat) and it gives the owner some legal protection if a customer decides to sue. The owner won't lose their home, 'just' potentially their business and livelihood. Typically the skipper will be the sole director and employee of the limited company and their PAYE will run annually. Currently skippers are being told by their accountants that they are not eligible for the 80% COVID-19 grant of the directors part of the salary because their salary is not run on a monthly basis.

The skipper then falls between the cracks yet again, because the owner / operator is not able to furlough themselves. Some self employed operators are entitled to claim through the self-employment income support scheme. However payments from this scheme are due to start being paid out in June and it is meant to support living expenses. Not business expenses.

The loss of the charter boat business from Weymouth and Portland may seem relatively unimportant to Government officials. After all it is only approximately 30 individual businesses that take visitors out diving, angling, sightseeing or wildlife spotting. But the repercussions of the charter boat businesses failing for this coastal community are horrific, and that is because of the secondary income these boats generate for the resort.

The repercussions of the charter boat businesses failing for this coastal community are horrific - because of the secondary income these boats generate for the resort

Visiting Yacht Income

A charter boat skipper advised me that Weymouth Harbour typically hosts approximately 5,500 visitor boat nights per year, with each berth paying about £23 per night. The number of guests on a yacht will be fairly low. It can be one person, typically two, or as many as six.

Although according to The Fisher Report this sector does bring in secondary revenue spend of about £600,000 per annum, in the main visiting yachts don't spend a huge amount. (Approximately £109 per boat). There is no need for bed and breakfast accommodation because the visitors are effectively camping - they sleep and eat onboard. And the boat is probably already stocked with groceries and alcohol. The visiting sailors will probably pick up fresh bread, milk and a couple of other food items, and they may make a discretionary spend in a local pub or buy an ice cream or the odd postcard.

Visiting yachts and pleasure craft boats bring in about £600,000 per annum into Weymouth and Portland

It is possible that visiting pleasure craft may also have to spend something with the local marine trade, perhaps replacing a part or getting fuel supplies, but it unlikely that every boat will do this.

Charter Boats Income

Weymouth is leading location for sea angling in the UK. The Fisher Report

On average each charter boat generates something like £75,000 to £200,000 secondary revenue for Portland and Weymouth small businesses.

The Weymouth charter boats will generate income for the local marine trade. These boats are supported by a whole network of local marine engineers, surveyors and chandlers. The boats will need to pay for slip services, fuel supplies and spare parts. This is valuable secondary spend and employment for local people.

The other secondary spend comes from customers using the charter boats. I spoke to a couple of dive boat skippers whilst preparing this article. They confirmed that the majority of their customers come from London, Birmingham, or from along the M5 corridor. Some customers can come from as far as Lancashire or continental Europe (Belgium, the Netherlands, France). "I can't remember the last time I took a group out diving who all live in Dorset", observed one skipper.

On average each charter boat generates something like £75,000 to £200,000 secondary revenue for Portland and Weymouth small businesses

Each charter boat will typically take out between 8 - 12 divers / anglers. Each customer will need somewhere to park (council revenue), a place to lay their head at night (hotel, B&B, hostel, caravan park or camp site) and breakfast in the morning (included or a café). They will need packed lunches (café or bakery) and invariably when the boat returns to harbour, the passengers will grab a cheeky beer (pub) to wash away the day's salt. Then there will be an evening meal (Fish & Chips / alternative takeaway, pub or restaurant) and may be another pint (pub) before heading back to their digs, possibly via a kebab shop.

The secondary income a diver will bring into resort at the weekend will typically be £160 - £200 for bed, breakfast, lunch, dinner and drinks

These customers will be buying gas fills (dive shop) or equipment (specialist gear shop). Finally before leaving resort, the charter boat customers will probably fill up with petrol and snacks for the journey home (garage or local corner shop).

This secondary income spent will be more than the boat charter fees, and brings in about £2 million income into the resort every year. There is a cute meme that goes something like "when you shop local, your money will pay for a girls dance lessons, a boys football boots and enable a parent to put food on the table." Crucially this secondary spend from charter boat customers is with lots of small local Dorset businesses. This money does feed families and pays for children's shoes.

Several small businesses - B&Bs, hotels, bars, takeaway shops, restaurants, pubs and cafes - will lose secondary revenue if the charter boat businesses fail

Skippers are worried

Lyle Stantiford owns and skippers the Weymouth charter boat . He stated "This has been a massive oversight by the Government. Without immediate access to the small business grant scheme and support for directors of limited companies, many charter operators will simply not survive this. We have just come through one of the worst winters for 30 years and are potentially facing no days at sea this season with bills to pay over next winter too.

We are frankly frustrated. Our charter boats are our only source of income. We should not discriminated against because we don't pay rates. Scotland has announced a package of £20 million for the hospitality, leisure and charter boats sector. We urge Westminster to follow suit."

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