Operating a charter boat business is very much done for the love of the game. Putting anglers of all skills and backgrounds onto quality fish and having them experience what is on offer off our coasts is an awesome reward. On a good day, as the skipper you are a hero. On a hard day, the helm seat is a very lonely place indeed. The ebb and flow of success can keep you constantly second guessing yourself.
The winter of 2019-2020 was a real kick in the plums for us on the south coast of Devon and, indeed, around the UK coast. At the time of giving up counting, I recall 27 back-to-back whole boat bookings lost to the inclement weather. Throughout the winter season, we love to get our customers to the offshore wrecks to catch the superb quality, hard fighting pollack, coalfish, cod, ling, and bass. With the exception of a couple of inshore evening river trips, our season was effectively wiped out from November onwards. However, with the winter receding and the promise of spring on the horizon, we focused our preparations on the usual spring fisheries: flatfish over the banks and pollack, cod and bass over the reefs. Sadly mother nature had other ideas.
We are all now deep in the grip of the COVID-19 pandemic and feeling its effects in many different ways. Some industries are still trading, some are very much reduced and some (like us) have stopped altogether. This virus has brought us the prospect of losing at least our spring and summer fishery, if not longer into the year. This is the time of year when vessels are lifted from the water for running repairs and readiness for the coming season, having paid the vast mooring fees and the renewal of the requirements for ‘coded’ status. These huge outgoings will have already been made for the year and we rely on business through the warmer months to support our families and cover us for the winter, as well as preparing for the same costs next year.
The advent of social distancing and other measures to ensure the safety of the nation have crippled our industry. All hope of recovering our outgoing costs and preparing for next winter is gone. It was promising then to hear our Chancellor make a very clear promise in the initial address to the British public on March 17th, ‘I want to reassure every British citizen, this government will give you all the tools you need to get through this.’ And ‘We will support jobs, we will support incomes, we will support businesses and we will help you protect your loved ones. We will do whatever it takes.’ Very strong and direct words! Nothing for us as a charter fleet to worry about, our government has promised to support us through this during the time when we cannot operate our businesses but still have all of the outgoings. If only.
As a fleet we operate our vessels in a coded capacity, undertaking and supplying activities for the public such as angling, diving, whale watching and coastal tours. Commercial operations include surveying and underwater operations. Each of these subsequently support coastal communities. All businesses involved in charter operations contribute vast amounts of revenue to the surrounding coastal communities directly: moorings, passenger levies to a local authority, support of local marine engineers, marinas with lift-out facilities and chandleries. They also contribute indirectly, through the secondary spend of our passengers in pubs, accommodation, in activity-specific equipment providers (shops) and parking – the list goes on.
There are approximately 6000 registered charter vessels complying with Her Majesty’s Maritime Coastguard Agency Small Commercial Vessel and Pilot Boat Code of Practice. Of these an estimated 399 individual businesses take part in angling charters in England alone. As an example of the financial contribution of these businesses, £831million was spent in 2012 on recreational sea angling, with approximately 15% of this spent on charters themselves and the vast majority of other expenditure spent in the surrounding coastal communities (source DEFRA Sea Angling 2012 project http://randd.defra.gov.uk/Document.aspx?Document=12025_SeaAngling2012synthesisreportFINAL.pdf).
To look at our own operation, Crusader Charters Ltd in Plymouth, alone would not tell the whole story – it is far wider reaching. In Scotland, the wildlife tourism sector brings in £759m (2015 research). In isolated locations, charter operators are imperative to the transportation of people as interisland or ferry services. These operators are essential employers to the island communities, with businesses employing as much as 10% of the population. All of these operations are generally seasonal (April-October). Although some of these charters will operate twelve months a year, the vast majority of revenues are generated during the ‘peak’ months (which is now!).
Every charter boat has fixed overheads (disregarding elements such as repayments to banks on the vessel and capital purchase) of between £5,000-£20,000 per annum, depending on their location and the scale of their operation. This is before a single rope has been slipped and the bows pointed out to sea. The purchase (or, as in our case, building) of the vessel is but one outlay. We have moorings, coding, safety checks, and specific equipment that must all be bought or leased to continue our operations.
The charter industry was one of the first industries to be affected by the movement restrictions imposed following the COVID-19 outbreak and is likely to be one of the last to begin operating again. The travel restrictions placed on potential customers will greatly reduce the ‘customer pool’ available and social distancing measures will restrict numbers onboard. Charter vessels around the country vary in size but all will feel the pinch of a phased return to operations, should restrictions begin to lift. This is the case with our vessel, Crusader. It will be impossible to socially distance the usual number of passengers (10) and to operate with less than eight passengers to aid social distancing is not economically viable. Burning a gallon of fuel per mile with our 530bhp engine puts into context the cost of a mid channel wreck fishing trip. To expect up to four or so anglers to cover the cost of a full boat charter is not realistic.
Some charters operate with seasonal staff, starting their season in early March. These staff are loyal, highly skilled and dedicated to their work. At the moment they can only be furloughed if they were on the payroll on 28th February. This clearly demonstrates the plight of seasonal staff supporting our work.
Our operations will remain practically impossible for the duration of time that social distancing measures and restrictions on non-essential travel exist. This period of time has the potential to last the remainder of our 2020 season. The industry has just come through one of the worst winters for many years with respect to the number of days completed at sea. This fact, allied with the restrictions brought about by the current pandemic, mean that we, the industry operators, will potentially have to survive until next April with no business assistance, no revenue, and no cash flow. A lack of cash flow kills businesses like ours, given that all our fixed overheads remain the same throughout this time.
As charter boat owner-operators, we do not qualify for the current small business rates relief package as our vessels do not come under rateable property. This is despite our contributions in business rates to the local authorities and to private marinas through our berthing fees. This is clearly shown in black and white on our receipts but, at present, is being dismissed by the authorities. Marina operators have received a freeze on rates for 12 months but this is not being passed on and berthing fees countrywide are largely still charged at full rate to customers. However, berthing discounts have been offered by some private marinas: one council-run marina in Swansea has indeed suspended all charges. Why this is not being adopted countrywide remains a mystery. We do not qualify for the small business grants fund, as we are not designated under receiving Small Business Rates Relief or Rural Rates Relief. A business interruption loan scheme would be our final resort but who wants to take on more debt when they were one of the first industries to stop and likely to be one of the last to return to normal operations? Unknown interest rates and unknown repayment terms add to the uncertainty and reduce the appeal of this option.
The current package of assistance made available by the government does not support the majority of the UK charter boat industry. Our professional body (The Professional Boatman’s Association) estimates 65% of operators countrywide operate as limited companies. We at Crusader Charters fall into this category. As sole directors/employees we have no payroll (PAYE) in place and we draw our income as directors’ dividends, depending on how the season’s revenues are going. The businesses remain our priority for cash flow. Because of our set-up, we are only entitled to Universal Credit. Payments from this scheme will only partially support the living costs of our households and will not support our businesses (and thus our means of earning a living and paying tax) post-coronavirus. This will culminate in huge losses in revenue to the surrounding coastal communities.
It is true that a small number of charter boat operators could furlough through their own companies, via the coronavirus job retention scheme, but payments from this scheme will only support the continuation of living and survival of households and will not support their businesses and means of earning. So, again, another group within our industry will clearly struggle.
In Scotland, means-tested grants for the under 12m fishing fleet are available from the government for up to £27,000, despite the fishermen being entitled to continue to work as part of the food supply chain. Charter vessels, at the time of writing, still cannot work and are entitled to no such grants! Aside from this, the Marine Management Organisation (MMO) is offering a guidance package for the commercial fishing fleet – again we are excluded as charter operators and we will receive no industry-specific advice.
We, along with the rest of the UK charter fleet, have been very much neglected in terms of any financial support being made available to us during the current pandemic. It is clear that our government has not lived up to the promises made in the initial address to the British people. We are a significant contributor of income to coastal communities throughout the UK. We, as a business sector, are not alone in this state of no support and there are many others out there in a similar situation.
In order for us as a fleet to survive the pandemic, we require immediate access to the small business grants fund. This would be a lifeline for all leisure and commercial businesses operating vessels under the Small Commercial Vessel and Pilot Boat Code of Practice. The suspension of all payments for berthing fees as well as local licencing fees that contribute to marina operators’ business rates would also greatly reduce our outgoings during the time period we are unable to work.
Financial support for directors of small limited companies at an equivalent level to that offered to the self employed would ensure that those in the same position we are would be able to support themselves. Having support in place for self-employed operators who have only recently established themselves in our industry (often with significant capital expenditure) or who hold less than three years’ worth of accounts is also essential for those new to the fleet. I can think of several new up-and-coming charter operators in neighbouring ports that would not be able to provide books for the past three years.
We are in unprecedented times where lives and business are being irreversibly affected by this virus, in time I hope that we as an angling community can return to what we love. However, if our charter fleet are not catered for as many other business sectors have been we may well see the end of many charter operations.
I would like to take the opportunity here to thank the huge number of anglers and friends that have checked in and offered support to us through this time. It is humbling to know that we have made an impact to the extent that you would think of us now and, indeed, offer to prepay for some charters, buy vouchers for future trips, and to sign the online petitions that are seeking to support our trade. Stay safe and well, look after our NHS and local businesses, and hopefully the charter fleet will be here to welcome you aboard once this pandemic is over.