BMF Tourism Report 2013 by Joe Roel

Economic Benefits of UK Boating Tourism

Foreword By Nigel Hamilton, Chairman BMF Tourism BMF Tourism seeks to represent the diverse needs of our member companies, and by enabling relevant research, help give them the tools necessary to grow their businesses and compete in a complex increasingly globalised economy. Boating tourism is a very diverse segment of the UK tourism market, reflecting a wide range of budgets, types of craft and holiday experience. This report draws together the many strands to identify the significant financial contribution, both nationally but perhaps more importantly locally, that all types of boating activity can make to the economy. The data on daily average spend illustrates that making boaters welcome locally, by developing facilities, improving navigations and constructing moorings, not only will improve their tourism experience but also makes clear economic sense. This study provides a comprehensive picture of the wide economic contribution a thriving UK boating tourism sector gives to local communities around the country, and demonstrates the great potential an already successful industry has to grow.

By Helen Grant MP Minister for Tourism As the Minister for Tourism, I very much welcome the findings of the British Marine Federation’s report into the Economic Benefits of UK Boating Tourism. The industry generates a total of £3.7 billion in GVA per annum to the UK economy and supports 96,000 full-time equivalent jobs. These are important statistics to a Government which recognises the crucial role that the overall tourism sector plays in economic growth. A recent report by Deloitte showed that tourism contributes around £127 billion GVA annually to the UK’s economy and that this figure is forecast to grow over the next decade. Boating tourism therefore has a key part to play in sustaining this positive picture. Discussion of the sector’s economic importance should not, however, overshadow the immense pleasure which a whole range of people derive from boating itself, whether it be for water sports, sailing schools or for a relaxing day out. I have witnessed this pleasure first hand, for the River Medway runs right through Maidstone in the heart of my constituency. Long may the clear success and enjoyment that boating tourism brings continue.

Economic Benefits of UK Boating Tourism

Contents Foreword ........................................................................................................................... i Executive summary ........................................................................................................... 1 Definitions ........................................................................................................................ 5 1

Introduction ........................................................................................................ 6

Overview of boating-related tourism in the UK .................................................... 8

Assessment of boating tourism sub-sectors........................................................ 16

Wider tourism expenditures .............................................................................. 43

Conclusions........................................................................................................ 65

Bibliography ...................................................................................................... 70

1.1 1.2 1.3 1.4 2.1 2.2 2.3 2.4 2.5 3.2 3.3 3.4 3.5 3.6 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5.1 5.2 5.3

This Report............................................................................................................................... 6 Study Aims and Objectives ...................................................................................................... 6 Industrial and economic context............................................................................................... 6 Report Structure ....................................................................................................................... 7 The UK tourism industry........................................................................................................... 8 The UK marine industry............................................................................................................ 8 Boating tourism sub-sectors..................................................................................................... 9 Participation in boating and watersports activities ................................................................. 12 Economic contribution of boating-related tourism.................................................................. 15 Marinas and moorings............................................................................................................ 17 Boat hire, charter, rental and sailing schools / training .......................................................... 25 Passenger boats .................................................................................................................... 32 Summary of total boating tourism sector................................................................................ 39 Regional distribution............................................................................................................... 40 Introduction............................................................................................................................. 43 Definitions............................................................................................................................... 43 Boat Ownership...................................................................................................................... 44 Participation in leisure boating activities ................................................................................ 46 Tourism expenditures............................................................................................................. 50 Additional boating activities .................................................................................................... 52 Summary of total visitor expenditures .................................................................................... 57 Economic contribution of tourism spending ........................................................................... 58 Wider economic impacts ........................................................................................................ 62 Scale of boating-related tourism in the UK............................................................................. 65 Economic Contribution of boating related tourism ................................................................. 66 Comparisons to other countries and sectors ......................................................................... 68

The economic contribution of boating-related tourism in the UK

Executive summary Overview In total, the expenditures associated with the boating tourism industry and participation in boating and watersports are estimated to have totalled £3.6 billion in 2012/13, accounting for 3.2% of all tourism 1 expenditure in the UK . These expenditures are estimated to support: ■

approximately 96,000 FTE jobs in the UK economy, through direct and indirect effects.

■

more than £3.7 billion of GVA in the UK economy, taking account of all direct and indirect effects.

Table 1

Total boating tourism expenditures and associated GVA and employment impacts Boating tourism industry

Wider tourism expenditures

Total boating tourism

Total sales / expenditures (£m)

609

2,994

3,603

Direct GVA (£m)

264

1,497

1,761

Indirect GVA (£m)

170

1,796

1,966

Total direct and indirect GVA (£m)

434

3.293

3,727

Direct employment (FTE jobs)

9.088

44,904

53,992

Indirect employment (FTE jobs)

5,842

35,923

41,765

Total direct and indirect employment (FTE jobs)

14,930

80,827

95,757

Source: ICF GHK estimate, 2013

The overall economic contribution is therefore many times larger than the core boating tourism sector: ■

For every job directly employed in the core boating tourism sector, there are an additional 10 jobs supported in the wider economy through the direct and indirect effects of expenditures of boaters and boating tourism businesses.

■

Similarly, the overall GVA contribution of UK boating tourism is 14 times larger than the core boating tourism industry, when all direct and indirect effects are included.

UK boating tourism therefore delivers a significant economic contribution and is estimated to be larger than: ■

the recreational boating industry in Canada;

■

the total recreational and light commercial marine industry in Australia; and

■

the total tourism impact of the 2012 Olympic and Paralympic Games between 2005 and 2017, including pre-event visits, the Games themselves and the ongoing legacy effect.

The Study The British Marine Federation (BMF) commissioned ICF GHK to undertake a study to assess the size, importance and economic contribution of boating-related tourism in the UK. The study was funded by BMF Tourism and supported by the Association of Pleasure Craft Operators (APCO), two of BMF’s subsidiary groups. Boating activities make a significant contribution to the UK economy through two discrete categories: ■

Expenditures on boating goods and services provided by boating tourism sectors (i.e. marinas and moorings, boat hire, charter, rental, sailing schools / training, and passenger boats); and

■

Expenditures on non-boating goods and services, which occur during trips to participate in boating and watersports activities.

Deloitte and Oxford Economics (2013) Tourism: jobs and growth - The economic contribution of the tourism economy in the UK

The economic contribution of boating-related tourism in the UK

The study therefore aimed to provide a robust, credible and evidence-based assessment of: ■

the economic contribution of activities in the boating tourism sectors; and

■

the impact of wider leisure and tourism expenditures of boating and watersports participants.

The assessment was based on a review of existing data and information relating to the size, performance and economic contribution of the boating tourism sectors, and levels of participation in watersports activities in the UK. This was supplemented by additional data on expenditures captured through an online survey of watersports participants, which was undertaken specifically to inform this study.

Industrial and economic context The marine industry has experienced challenging times in recent years as a result of the global financial crisis and the subsequent recessions and slow recovery of the UK economy. Real disposable incomes have also been falling over time, which has affected participation in watersports activities. This report is based on watersports participation in the 12 months to October 2012, which was a particularly poor year in terms of summer weather. We expect overall participation to increase in 2013 given the better summer weather and the ongoing legacy effects of the 2012 Olympics. Furthermore, a recovery now appears to have commenced in the marine industry following two consecutive years of positive growth, whilst the UK tourism industry has also recovered well and the prospects for future tourism growth look good.

Assessment of boating tourism sectors The study assessed the economic contribution of core activities in boating tourism sectors: ■

marinas and moorings – the provision of moorings and marina berths is closely associated with tourism activity as it enables and facilitates participation in boating and watersports activities. Marinas and mooring sites provide safe storage for vessels, access to coastal waters and the inland waterways, and facilitate the movement of vessels along the coast and around inland networks.

■

boat hire, charter, rental and sailing schools and training – businesses in this sector provide services to UK residents and visitors who want to hire leisure boats, rent watersports equipment or undertake training activities . The sector therefore provides a means for people to participate in, and improve their competence in, boating and watersports activities. It comprises a wide range of services for many different activities (e.g. canoeing, canal boating and yachting), and for people with different levels of expertise and competence.

■

passenger boats – the passenger boat sector provides a wide range of leisure boating experiences on rivers, lakes and coastal waters across the UK and is therefore a key provider of boating tourism services. The sector is very diverse, comprising very small businesses offering day trips as well as much larger businesses owning fleets of boats offering a range of boat trips and ferry services. For the purposes of this study, we have defined the passenger boat sector as the provision of passenger transport services to ‘leisure’ passengers and have excluded activities associated with the provision of commuter services as these do not relate to tourism.

The results of the analysis are presented in Table 2. It is estimated that the overall economic contribution of these boating tourism sectors includes: ■

a total turnover of £600 million generated directly by more than 2,000 boating tourism businesses;

■

a total GVA of £434 million generated directly by boating tourism businesses (£264 million) and indirectly supported amongst suppliers (£170 million); and

■

a total of 14,900 FTE jobs directly employed by boating tourism businesses (9,100 FTE jobs) and indirectly supported amongst suppliers (5,800 FTE jobs).

The economic contribution of boating-related tourism in the UK

Table 1 Boating tourism sector assessment, 2012/13 Indicator

Units

Marinas & moorings

Hire, charters & sailing schools / training

Passenger boats

Total boating 1 tourism

Turnover

£ million

176

260

204

609

Businesses

Number

497

925

732

2,044

Direct employment

FTE jobs

2,250

3,773

3,606

9,088

Indirect employment

FTE jobs

1,350

2,377

2,488

5,842

Total employment

FTE jobs

3,600

6,150

6,094

14,930

Direct GVA

£ million

103

106

264

Indirect GVA

£ million

170

Total GVA

£ million

114

168

179

434

Source: ICF GHK estimates, 2013 Notes: 1 The number of businesses has been adjusted to account for businesses offering multiple activities, such as marinas offering boat hire services, based on BMF members data. It has also been assumed that 15% of the passenger boat companies are also involved in delivering marinas, moorings, hire, charter, rental or sailing school / training activities.

Wider tourism expenditures ‘Boating expenditures’ such as marina, boat hire or tuition fees, have already been included above as income to the core boating tourism sector. The analysis of wider tourism expenditures therefore focuses solely on ‘non-boating’ expenditures, which generate further benefits for local, regional and national economies. These expenditures include purchases of a range of ‘non-boating’ goods and services such as food and drink, transport and travel, accommodation and (non-boating) retail goods. They are attributable to leisure boating when they have arisen as a direct result of participation in boating and watersports activities. The analysis of tourism expenditures therefore focuses on: 2

■

levels of participation in different watersports activities from the Watersports Participation Survey ; and

■

expenditures for day and overnight visits associated with the same watersports activities, from the watersports expenditure survey that was undertaken to inform this study.

The latest data from the Watersports Participation Survey suggests that approximately 6% of the UK adult population (more than 2.8 million people) participated in boating activities in 2012. These participants include boat owners but also include large numbers of people hiring and chartering boats, using club boats, and boats owned by friends and family. The survey also estimated that a total of 17.6 million trips were taken to participate in watersports activities in the UK in 2012. Canoeing was the most popular activity and more than 6.1 million canoeing trips were estimated to have been taken by 1.2 million people in 2012. The next most popular activities were small sail boat activities (with 1.9 million trips taken by 388,000 participants) and motor boating (with 1.6 million trips taken by 414,000 participants). The findings of the Watersports Participation Survey and the expenditure survey have been used as the basis for the analysis, which estimates that: ■

the 17.6 million trips include 11.1 million day visits and 6.5 million overnight trips (averaging approximately five nights per trip, to provide an overall estimate of 34.5 million nights);

■

average expenditures on day visits ranged from less than £19 per person for those participating in small sail boat activities to £38 per person for people participating in power boat activities;

■

average overnight expenditures ranged from £38 for those participating in yacht cruising to £65-70 for smaller vessels (such as small sail boat racing, water skiing / wakeboarding, rowing,

BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012

The economic contribution of boating-related tourism in the UK

windsurfing and personal watercraft). This was mainly due to higher expenditures on accommodation as those using smaller craft are less likely or unable to stay on their boats; and ■

overall expenditures of watersports participants of £350 million for day visits and almost £2 billion for overnight trips. The largest expenditures are associated with canoeing, as a result of high levels of participation, and canal boating, as a result of the longer duration of overnight trips.

Some other boating activities (that are not included in the Watersports Participation Survey) were also added to the analysis of tourism expenditures. These activities included: ■

people visiting their boats without leaving the berth or mooring to ‘participate’ in boating activities, which were estimated to add a further £204 million in tourism expenditures;

■

people taking trips on passenger boats, which was estimated to add another £115 million in tourism expenditures; and

■

overseas visitors participating in boating activities in the UK, which was estimated to add a further £355 million in tourism expenditures in 2012.

Table 4 Tourism expenditures and associated GVA and employment impacts Total tourism expenditures (£m)

GVA contribution to the tourism economy (£m)

Employment contribution to the tourism economy (FTE jobs)

2,320

2,552

62,631

‘Non-participating’ boat owners

204

224

5,505

Passenger boat trips

115

127

3,105

Overseas visitors participating in boating activities

355

391

9,585

Total boating-related tourism

2,994

3,293

80,827

Any boating activity

Source: ICF GHK analysis, 2013

The above estimates exclude a number of other significant but more intangible benefits that are difficult to quantify, such as: ■

■

visitors attending boating-related events including: –

sailing and rowing regattas and races, from large events such as the Henley Regatta and Cowes Week to smaller events that take place in local communities across the UK;

–

boating festivals, such as the Crick Boat Show and the Inland Waterways Association (IWA) National Festival;

–

the UK National Boat Shows; and

–

spectator events like the Powerboat Grand Prix, the tall ships events and the Clipper Round the World Race.

Wider economic impacts, including: –

the ability of boating activities to enhance local tourism offers and property prices. Many ‘nonboating’ visitors visit inland waterways and coastal locations to watch other people participating in boating activities, which generates additional tourism expenditures and impacts for local economies. There is also a premium associated with the value of waterfront properties, which is likely to be enhanced by boating activities; and

–

numerous examples of boating infrastructure that can be considered visitor attractions in their own right, attracting significant numbers of visitors to spend money in their respective local economies. Examples include the Falkirk Wheel, the Helix project and the Anderton Boat Lift.

The economic contribution of boating-related tourism in the UK

Definitions The following provides a list of definitions used in this report: Marina: An [offline] facility for the berthing of pleasure craft providing direct walkway access to each boat, an adequate depth of water at all times, car parking, toilet facilities, services and other 3 amenities. Moorings: Moorings for boats alongside the canal towpath or riverbank within the main navigation channel or one or more secured anchors with buoyed riding chain or similar to which craft or pontoons 3 may be secured. Boat hire: The hire of vessels not intended for the carriage of more than twelve persons, offered without a skipper or crew, on inland waters. Includes day hire of boats and longer holidays. Charter: Renting of yachts in coastal locations for a specified period of time and covering a range of different charter and holiday options including: bareboat, skippered, crewed, flotilla, beach club, membership boating and boat share, and â&#x20AC;&#x2DC;sail and stayâ&#x20AC;&#x2122; options. Watersports rental: Rental of watersports equipment and smaller vessels to participate in watersports activities including canoeing / kayaking, waterskiing and wakeboarding, windsurfing, jetskis and other personal watercraft. Sea Schools / Training: Training to teach new boating/craft activities and/or enhance skills, i.e. RYA courses. Includes day courses and training incorporated into holidays. Passenger boats: Leisure boating experiences on rivers, lakes and coastal waters including trip boats, hotel/restaurant boats and transport vessels ranging from single 12 seat vessels on canals to large river and seagoing vessels carrying 500 passengers or more. Economic Definitions:

Economic significance / contribution

The total contribution of boating tourism to the national and regional economy.

Economic Impact

Measures the marginal increase or decrease in this contribution from a change in customer spending, or other changes in the value chain such as a change in the use of imports.

GVA

Gross Value Added, represents the total value generated by all producer units in a region or country.

Income Approach

Measures the total income received from factors of production, including labour compensation (i.e. wages), profits and rents.

Output Approach

Estimates the total value of final goods and services produced, i.e. the difference between the total value of goods and services produced by the industry minus the costs of purchases of intermediate goods and services.

Direct effects

Economic activity (GVA and employment) supported among boating tourism businesses and wider tourism businesses benefiting from expenditures of boating participants.

Indirect effects

Economic activity indirectly supported among suppliers to the boating tourism and wider tourism businesses as a result of purchases of intermediate goods and services to support the delivery of services to boating participants.

Induced effects

Economic activity supported by the expenditures of employees directly and indirectly employed by boating tourism expenditures.

The Yacht Harbour Association Ltd (2013) 7 Edition A Code of Practice for the Design, Construction and Operation of Coastal and Inland Marinas and Yacht Harbours

The economic contribution of boating-related tourism in the UK

Introduction

1.1

This Report ICF GHK was commissioned by the British Marine Federation (BMF) to undertake a study of the economic contribution of boating-related tourism in the UK. The study was funded by BMF Tourism and supported by the Association of Pleasure Craft Operators (APCO), two of BMF’s subsidiary groups.

1.2

Study Aims and Objectives The overall aim of the study was to assess and document the size, importance and economic contribution and impact of boating-related tourism in the UK. The study included an assessment of: ■

the economic contribution of the sub-sectors within the wider marine industry that provide tourism services, such as: – – – –

■

providers of marina berths and moorings; boat hire and charter; sailing schools / training; and passenger boats.

the indirect contribution associated with the visitor expenditures of those participating in boating activities and watersports.

More specifically, the study aimed to:

1.3

■

build on the previous studies of the economic benefits of inland and coastal marinas 6 and boating and provide a robust and credible assessment of the economic contribution of boating-related tourism in the UK;

■

provide appropriate estimates and metrics for tourism expenditures and impacts for individual marine sub-sectors and activities at a regional and total UK level;

■

produce estimates that are consistent with existing definitions of tourism used by tourism organisations, such as Visit Britain, Visit England;

■

provide an evidence based report that will: –

support BMF Tourism in raising the profile of boating-related tourism and BMF member companies amongst Government agencies, tourism organisations and other key stakeholders; and

–

support BMF Tourism, its members and the wider industry to influence national and local Government and unlock future funding opportunities for marine activities and infrastructure.

Industrial and economic context It is important to set the assessment in the context of the wider economic and industry trends. The marine industry has experienced challenging times in recent years as a result of the global financial crisis and the subsequent recessions and slow recovery of the UK economy. Real disposable incomes have also been falling over this time, which has affected boating participation levels, particularly amongst those who participate less frequently (i.e. the ‘non-enthusiasts’. However, a recovery now appears to have commenced in the marine industry following two consecutive years of positive growth. The UK tourism industry has also recovered well and

ICF GHK (for BMF and partners) (2008) Economic Benefits of Inland Marinas in the UK ICF GHK (for BMF and partners) (2007) Economic Benefits of Coastal Marinas in the UK and Channel Islands 6 ICF GHK (for BMF) (2005) Economic Benefits of the UK Leisure Boating Industry 5

The economic contribution of boating-related tourism in the UK

total tourism expenditures increased by 6% in 2013. The prospects for future tourism growth 7 also look good, with tourism expenditures expected to double by 2025 . It should also be noted that the participation data used in this report is based on boating and watersports activities in the 12 months to September 2012. This was a particularly poor year in terms of summer weather and we would expect an increase in overall participation in 2013 given the better summer weather and the ongoing legacy effects of the 2012 Olympics.

1.4

Report Structure The remainder of this report is structured as follows: ■

Section 2 provides an overview of boating-related tourism in the UK, and discusses some of the key industry trends;

■

Section 3 provides an assessment of the boating industry tourism sectors and its respective sub-sectors;

■

Section 4 provides an analysis of wider tourism expenditures associated with participation in boating and watersports activities;

■

Section 5 presents the conclusions of the study; and

■

Section 6 provides a bibliography of sources.

Deloitte and Oxford Economics (2013) Tourism: jobs and growth - The economic contribution of the tourism economy in the UK

The economic contribution of boating-related tourism in the UK

Overview of boating-related tourism in the UK

2.1

The UK tourism industry th

The tourism industry, as a whole, is the 5 largest industry in the UK. A recent report 8 commissioned by Visit Britain estimates that the sector supports more than 3.1 million jobs in more than 200,000 small and medium sized enterprises (SMEs) and contributes £127 billion to the UK economy each year. This represents 9.6% of the total UK workforce and 9% of the total value added in the UK economy. These industry estimates of just over 3.1 million jobs and £127 billion of Gross Value Added (GVA) comprise: ■

A direct contribution from the tourism economy (i.e. from businesses providing tourism related goods and services) of 1.75 million jobs and £58 billion of GVA; and

■

Indirect effects of an additional 1.4 million jobs and £69 billion of GVA supported within the tourism supply chain as a result of the purchases of goods and services from suppliers.

The tourism industry has recovered well from the economic downturn and total tourism expenditures have increased by 6% in 2013 to reach £113 billion. Much of this growth has been driven by particularly strong growth in expenditures from overseas visitors. Expenditures from overseas visitors are estimated to have increased by almost 15% (in current prices) in the last year alone to £24 billion. This follows the successful Olympics in 2012 and shows that tourism is one of the largest export industries in the UK. Domestic tourism expenditures are also growing by 3.1% in 2013, 8% in 2012 and 9% in 2011. All tourism expenditures by domestic residents total £89 billion and represent just under 80% of total tourism expenditures in the UK. The prospects for the tourism industry are also good, with continued strong growth in tourism expected to 2025. Domestic expenditures are expected to grow at 3% per annum, while particularly strong growth of more than 6% is projected for spending by overseas visitors. These figures would equate to a further 630,000 jobs by 2025 and increase the value added by the tourism industry by around 10%.

2.2

The UK marine industry The UK marine industry has considerable overlap with the wider tourism industry. Many tourism trips involve participation in boating and watersports, while leisure boating facilities such as marinas, hire/ charter services and passenger boat trips attract large numbers of boating and non-boating visitors. The BMF currently estimates the UK leisure, superyacht and small commercial marine 9 industry to have generated a total annual turnover of just over £2.9 billion in 2012/13 . The sector remains below the peak turnover of £3.1 billion achieved during 2007/08 and £3.16 billion in 2008/09, due to the impact of the financial crisis and economic downturn. However, it has generated positive growth for two consecutive years, which suggests improving prospects for the industry. Turnover in the industry increased by 1.7% between 2011/12 and 2012/13, while GVA increased by more than 6% to just over £950 million over the same period. The ratio of GVA to turnover is also increasing and is now only slightly behind the position in 2008/09. One of the key drivers of this growth is a recovery in international trade, and the value of exports now stands at £1.1 billion, having increased from 35% to 37% of turnover in the last 12

Deloitte and Oxford Economics (2013) Tourism: jobs and growth - The economic contribution of the tourism economy in the UK 9 BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13

The economic contribution of boating-related tourism in the UK

months, back to the levels seen in 2010/11. The marine sector also directly supports more than 30,600 full-time equivalent (FTE) jobs and 4,200 businesses. The UK marine industry is dominated by the manufacture and distribution of boats, engines and boating equipment, which account for almost 60% of total turnover and 50% of total employment. The other major sub-sector is consumer services, which comprises a range of services for boaters, including many which deliver tourism services. Consumer services account for just under £1.1 billion of turnover and directly support almost 14,000 FTE jobs amongst UK businesses.

2.3

Boating tourism sub-sectors The consumer services sector of the marine industry comprises a number of sub-sectors that deliver tourism services and are part of the core UK tourism industry. These ‘boating tourism’ sub-sectors comprise: ■

Marinas and moorings;

■

Inland boat hire;

■

Coastal charter;

■

Watersports rental;

■

Sailing schools / training; and

■

Passenger ‘leisure’ boats.

While the large majority of passenger ‘leisure’ boats are not currently included in BMF data 10 for the marine industry , they are included as part of this assessment since the provision of leisure boat trips is a key component of boating tourism in the UK. Furthermore, the Passenger Boats Association (PBA) joined the BMF in October 2013 and will be included in future BMF data for the marine industry. The turnover and employment supported amongst the other boating tourism sub-sectors is presented in Table 2.1 and shows that the boating tourism sector is estimated to generate £435 million of turnover and directly supports more than 6,000 FTE jobs in UK companies. Recent estimates for the passenger boat sector suggest that it generated turnover of £111 million in 2009 and employed up to 4,000 people (in the summer season), although these 11 figures also include commuter passenger boat services (i.e. extend beyond tourism-related services). Table 2.1

Turnover and employment in boating tourism sub-sectors

Boating tourism sector

Turnover (£m)

Employment (FTE jobs)

Coastal marinas & moorings

119

1,450

Inland marinas & moorings

800

Inland boat hire

1,524

Coastal charter

102

1,018

Watersports rental

101

Sailing schools / training

1,130

Total

435

6,023

Source: BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13

Some passenger boat operators are already included in BMF data, classified as boat hire businesses, and the analysis takes these into account to avoid double-counting their economic contribution. 11 The Passenger Boat Association (2009) The UK Passenger Boat Industry - What Value to the Economy?

The economic contribution of boating-related tourism in the UK

The economic contribution of these boating tourism sectors is assessed in Section 3 below. The analysis focuses on businesses operating in these sectors and is therefore likely to exclude some other boating tourism activities. For example, the analysis does not include the activities of time share and shared ownership organisations, boat clubs and navigation authorities, a proportion of which will be directly related to boating tourism. The sector estimates in Section 3 are therefore expected to provide a conservative estimate of the economic contribution of boating tourism activities in the UK. However, the tourism expenditures in Section 4 capture spend associated with all boating and watersports activities, regardless of whether boats and equipment are owned, hired, borrowed or part of a time share agreement.

2.3.2

Key companies in boating tourism sectors The top ten companies in each boating tourism sub-sector are included in Table 2.2, based 12 on BMFâ&#x20AC;&#x2122;s own analysis of financial information provided by its members . The exceptions are the relatively small watersports rental sector has been excluded to avoid any potential disclosure issues, and the passenger boats sector, where the market share is based on the turnover estimate for the sector from section 3.4. The top ten companies in each sector are listed in alphabetical order, together with the percentage of total turnover in the sub-sector that is accounted for by these key companies (the industrial concentration). The greatest concentrations are in the coastal charter and coastal marinas and moorings sub-sectors, where the top ten companies account for 60% and 54% of the overall turnover of the sectors respectively. In contrast, the industrial concentration in the passenger boat sector is the lowest, with the top ten companies accounting for 21% of the overall turnover of the sector. This is likely to be due to the large number of small businesses operating in this sector. The industrial concentrations in the other sub-sectors (sailing schools / training, inland boat hire and inland marinas and moorings) range from 27% to 35% of the total turnover in these sub-sectors. One of the reasons for the relatively low industrial concentration in the sailing schools / training sector is a large number of smaller operators. There are also large, not-for-profit organisations that are not included in this analysis, including the UK Sailing Academy (UKSA) and the Weymouth & Portland National Sailing Academy (WPNSA). Most companies appear only in one list, suggesting there is little overlap amongst the market leaders in each sector. The exceptions are Marina Developments Ltd, which is listed for coastal and inland marinas, Neilson Active Holidays Ltd, which is listed for coastal charter and sailing schools / training sub-sectors, and TUI Travel Plc, which appears in lists for inland boat hire, coastal charter and sailing schools / training.

Data were kept confidential to BMF

The economic contribution of boating-related tourism in the UK

Table 2.2

Turnover and employment in boating tourism sub-sectors Key Companies (alphabetical order)

Boating tourism sector

Industrial concentration

Coastal marinas & moorings

54%

Associated British Ports (ABP) Dean & Reddyhoff Ltd Holt Leisure Park Ltd Jersey Harbours Marina Developments Ltd Newhaven Port and Properties Ltd Premier Marinas Ltd Quay Marinas Ltd Ramsgate Royal Harbour Yacht Havens Group Ltd

Inland marinas & moorings

35%

British Waterways Marinas Ltd Castle Marinas Ltd Essex Marina Lakeland Leisure Estates Ltd Marina Developments Ltd Shepperton Marina Ltd SKD Marina Ltd Tingdene Marinas Ltd Windermere Aquatic Ltd Windermere Marina Village Ltd

Inland boat hire

33%

ABC Leisure Group Ltd Anglo Welsh Ltd Barnes Brinkcraft Black Prince Holidays Ltd Herbert Woods LLP Napton Narrowboats Norfolk Broads Direct Ltd Richardsons Leisure Ltd The Hoseasons Group Ltd TUI Travel Plc

Coastal charter

60%

Adriatic Holidays Ltd Burgess Cosmos Yachting Ltd European Travel Ventures Ltd Hamble Point Yacht Charters Ltd Neilson Active Holidays Ltd Ribeye Ltd Sailing Holidays Ltd Sunseeker Charters Ltd TUI Travel Plc (Sunsail, Le Boat, The Moorings)

Watersports rental

Excluded to avoid potential disclosure due to being a small sector

Sailing schools / training

27%

Cornish Cruising Falmouth Ltd Elite Sailing European Travel Ventures Ltd Hamble Sea School Ltd Hoylake Sailing School Ltd Medina Yard Neilson Active Holidays Ltd Norfolk Yacht Agency Ltd Rockley Watersports Ltd TUI Travel Plc (Sunsail, Le Boat, The Moorings)

Passenger boats

21% *

City Cruises French Brothers London Rib Voyages Silver Fleet -Woods River Cruises Thames Clipper- The Riverline

The economic contribution of boating-related tourism in the UK

Boating tourism sector

Key Companies (alphabetical order)

Industrial concentration

Thames Luxury Charters Ltd Thames Rib Experience Thames River Services Turk Launches Ltd York Boat Source: BMF (2013), * ICF GHK estimates of turnover for the Passenger Boat sector

2.4

Participation in boating and watersports activities In addition to the boating tourism sectors described above, leisure boating has an even more significant contribution to the UK economy through the tourism expenditures of people participating in leisure boating and watersports activities. 13

The latest Watersports Participation Survey suggests that in the year to September 2012, 5.8% of UK adults (2.8 million people) participated in at least one of the following core boating activities: ■

Canoeing

■

Water skiing and wakeboarding

■

Small sail boat activities

■

Rowing/sculling

■

Windsurfing

■

Using personal watercraft (e.g. jetski)

■

Motor boating/cruising

■

Yacht cruising

■

Power boating

■

Small sail boat racing

■

Canal boating

■

Yacht racing

The number of participants had fallen slightly from almost 3 million participants in the previous year, although this decline is thought to have been at least partly due to the poor weather during the summer of 2012 and it is estimated that overall participation will have increased in 2013 from the 2012 figure. Also, whilst overall participation had fallen during 2012, the number of boating and watersports trips or experiences had increased by more than 10% to 17.6 million. This suggests that although fewer people were participating in 2012, they were participating on a more regular basis. Figure 2.1 shows the frequency of participation across the sample. It shows that 37% of participants took part in each activity once in 2012, while one in four participants took more than six trips in 2012.

BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012

The economic contribution of boating-related tourism in the UK

Figure 2.1

Watersports participation by frequency

Source: BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012

The most common of the boating and watersports activities is canoeing, which had 1.2 million participants in 2012, who undertook 6.1 million canoeing trips. The next most common activity is small sail boat activities, in which approximately 390,000 participants took 1.9 million trips in 2012, while a further 405,000 people participated in motor boating/cruising in 2012, taking 1.6 million trips.

The Watersports Participation Survey also suggests that boat ownership is increasing over time. There are currently estimated to be around 750,000 boat owning households in the UK. These households are estimated to own a total of 1.2 million boats, 1.1 million of which are kept in the UK.

2.4.2

Survey of watersport expenditures An additional survey was undertaken as part of this study, in conjunction with BMF, in order to inform an assessment of the tourism expenditures associated with participation in these activities. The survey ran from August to October 2013 and was targeted at UK-based participants of boating and watersports activities. The survey was promoted widely by the BMF and its members/ partners and received a total of 2,982 responses, including 2,731 responses from people participating in activities in the UK rather than abroad. Table 2.3 shows how these responses were distributed across the different boating and watersports activities. It shows a good number of responses across the different activities, with the largest number of responses from participants in yacht cruising, canal boating and motor boating activities. The smallest numbers of responses were associated with wind-surfing, using personal 13

The economic contribution of boating-related tourism in the UK

watercraft, rowing and water skiing / wakeboarding activities and these activities have been combined in some of the subsequent analysis to increase the robustness of the findings. Table 2.3

Survey responses by activity Total respondents participating in each activity

Number of respondents participating in the UK

Canoeing

201

182

Water skiing and wakeboarding

Small sail boat activities

157

145

Rowing/Sculling

Windsurfing

Using personal watercraft

Motor boating/cruising

445

390

Yacht cruising

796

690

Power boating

201

182

Small sail boat racing

137

135

Canal boating

626

606

Yacht racing

116

109

No participation in the last 12 months

187

There was also a good spread across activities in different regions and areas of the UK, with 50% of respondents participating in coastal waters, 19% participating in estuaries and tidal waters, 25% participating on canals, 16% participating on inland rivers and 11% participating on lakes. Boat ownership amongst the sample was similar to the findings of the Watersports Participation Survey, with 66% of the sample mostly using boats owned by themselves, their family or friends, 24% mostly using charter/hire boats and 10% mostly using boats owned by clubs, training centres or others. Respondents reported having taken 12,800 day visits and 17,900 overnight trips to participate in these activities in the last 12 months. This suggests an average of 4.7 day visits and 6.5 overnight trips per person during the last year. This is relatively high compared to the Watersports Participation Survey, which suggested an average of 6.2 trips per person. The sample provided expenditure data for their last trip, which is summarised in Table 2.4. The data suggest that the average boating and watersports participant spends a total of £45.70 per day visit and £76.66 per night for overnight trips. These figures include additional spending on boating goods and services (such as boat hire, marina or tuition fees) to facilitate their participation. If these boating expenditures are excluded, the average day spend on wider tourism goods and services (such as food and drink, accommodation and travel) becomes £32.29 while the average overnight spend is £50.39. 14

The latest estimates from the GB Day Visits and Tourism Surveys suggest average expenditures of £33 per day visit and £62 per night away from home. The findings of the watersports expenditure survey are almost identical to the GB day visit average in terms of day visit spend on wider tourism goods and services, while the overnight spend falls well below the GB average, which is likely to indicate that many watersports participants stay on their boats, thereby saving on accommodation costs.

Visit Scotland, Visit Wales, Visit England (2013) The GB Day Visitor – Statistics 2012

Visit Scotland, Visit Wales, Visit England (2013) The GB Tourist – Statistics 2012

The economic contribution of boating-related tourism in the UK

Table 2.4

Expenditures associated with day visits and overnight trips (£ per person) Day visits (£ per person per day)

Watersports expenditure survey GB Day Visits / Tourism Surveys

Overnight trips (£ per person per night)

Boating spend

Wider tourism spend

Total spend

Boating spend

Wider tourism spend

Total spend

13.41

32.29

45.70

26.27

50.39

76.66

33.00

62.00

Sources: ICF GHK and BMF (2013) Watersports expenditure survey, Visit Scotland, Visit Wales, Visit England (2013) The GB Day Visitor – Statistics 2012 and Visit Scotland, Visit Wales, Visit England (2013) The GB Tourist – Statistics 2012

2.5

Economic contribution of boating-related tourism As described above, boating activities make a significant contribution to the UK economy through the expenditures of boating and watersports participants. These expenditures fall into two discrete categories: ■

Expenditures on boating goods and services provided by the boating tourism sectors (i.e. marinas and moorings, inland boat hire, coastal charter, watersports rental, sailing schools / training, and passenger boats); and

■

Expenditures on non-boating goods and services, which occur as a result of participating in boating and watersports activities.

The following sections assess the scale and nature of these expenditures and their resultant impacts and contributions for the national economy. Section 3 provides an industry assessment of the boating tourism sectors, while Section 4 explores the wider tourism expenditures associated with boating and watersports participation.

The economic contribution of boating-related tourism in the UK

Assessment of boating tourism sub-sectors This section presents an assessment of the economic contribution of boating tourism activities. The analysis updates, refines and builds upon the earlier BMF reports (conducted 16 by ICF GHK), the Economic Benefits of the UK Leisure Boating Industry , the Economic 17 18 Benefits of Coastal Marinas and the Economic Benefits of Inland Marinas , and to take account of new information and evidence, such as the new BMF Key Performance Indicators 19 report . This section provides a discussion of the methodology and approach used to assess the contribution of boating tourism sectors to the UK economy. The economic contribution of boating tourism activities is measured through a range of indicators, including: ■

Numbers of businesses;

■

Employment;

■

Business turnover;

■

Purchases of goods and services from other businesses;

■

Gross Value Added (GVA);

■

Profits;

■

Wages and salaries; and

■

Taxes.

GVA and employment are the key indicators of the jobs and value supported by boating tourism activities. Where possible, estimates of employment have been based on BMF member data and extrapolated across non-members, while GVA estimates have been derived in the following three ways and then averaged to provide one consolidated estimate: ■

Output measure (BMF): using data on turnover and purchases of intermediate goods and services collected from BMF members and estimated for non-members (to reflect the difference between gross sales and purchases of intermediate goods and services);

■

Output measure (ABS): industry specific ratios for the value of GVA supported by £1 million of turnover taken from the Annual Business Survey (ABS) and applied to BMF turnover data (to reflect the difference between gross sales and purchases of intermediate goods and services); and

■

Income measure: The sum of returns to labour (wages) and capital (profits).

The economic contribution of the boating tourism sector comprises a combination of direct, indirect and induced effects. Examples of these are given in Table 3.1. Table 3.1

Examples of direct, indirect and induced effects

Source of impact

Direct Effect

Indirect Effect

Induced Effect

Expenditures on ‘boating tourism’ goods and services

Employment and GVA of boating tourism businesses

Employment and GVA among suppliers to boating tourism industry

Employment and GVA resulting from spending by boating tourism and supplier employees

Wider tourism and leisure expenditures

Employment and GVA among businesses supplying food, drink, accommodation, etc.

Employment and GVA among suppliers to leisure and tourism firms

Employment and GVA resulting from spending by firm and supplier employees

ICF GHK (for BMF) (2005) Economic Benefits of the UK Leisure Boating Industry ICF GHK (for BMF and partners) (2007) Economic Benefits of Coastal Marinas in the UK and Channel Islands 18 ICF GHK (for BMF and partners) (2008) Economic Benefits of Inland Marinas in the UK 19 BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13 17

The economic contribution of boating-related tourism in the UK

The above indicators are estimated in the following sections, which also use examples of relevant activities to demonstrate the scale and nature of some of these economic indicators and key businesses. All direct, indirect and induced effects are calculated in the industry assessments below, although the estimates of economic contribution focus on the direct and indirect effects only as we believe it can be misleading to attribute all induced effects to the economic contribution of a particular sector at the national level.

3.2

Marinas and moorings The provision of moorings and marina berths is closely associated with tourism activity as it enables and facilitates participation in boating and watersports activities. Marinas and mooring sites provide safe storage for vessels, access to coastal waters and the inland waterways, and facilitate the movement of vessels along the coast and around inland networks. This analysis focuses purely on the core ‘marinas and moorings’ sector (i.e. the provision of berths and moorings), despite the fact that many marinas and mooring sites also provide additional boating and tourism facilities. For example: ■

many marinas and mooring sites offer additional ‘boating’ services such as boat repair and maintenance, chandleries, fuel sales, and/or broker and dealer services. Since these activities are not directly related to tourism, they have been excluded from this analysis;

■

some marinas provide other boating tourism activities, such as holiday and day hire boat operations or sailing schools. However, these activities are included later in this section and are excluded here to avoid double-counting;

■

many marinas and mooring sites provide leisure and tourism services including food and drink, accommodation and retail outlets that will attract non-boating as well as boating visitors. In fact some marinas have become destinations in their own right and offer an even greater range of services for boaters and non-boaters, including cinemas, casinos and shopping centres. These additional leisure and tourism services might be provided by the marina / moorings operator or by tenant businesses but have been excluded from this section to avoid double-counting the wider tourism expenditures, which are discussed in greater detail in Section 4 below.

The following sections present an analysis of the economic benefits of the core marinas and moorings sub-sector. It is important to note that the total economic contribution of marinas and moorings providers is many times greater than the core sector when considering all of the additional activities listed above and the associated expenditures.

3.2.1

Business numbers The marinas and moorings sector consists of just under 500 businesses, comprising 300 businesses providing berths and moorings on inland waterways and 200 businesses providing coastal berths and moorings. Nine of these businesses operate in both the inland and coastal sectors. The estimates are based on an analysis of BMF membership data, and 17

The economic contribution of boating-related tourism in the UK

research into non-members using Experian data, and are consistent with the data used in 20 the latest BMF Key Performance Indicators report . These latest BMF figures are the most robust estimates available, given that BMF members account for 53% of all marinas and moorings providers, and 77% of the turnover of the sector. The BMF and The Yacht Harbour Association (TYHA) have also recently updated the analysis of marinas and marina berths undertaken by ICF GHK in the previous studies of the economic benefits of inland and coastal marinas. This provides estimates of the number of marina sites in the UK, although it only includes offline marina berths, and therefore excludes moorings and providers of moorings. The latest estimates are presented in Table 3.2 and suggest that there are currently 485 marinas in the UK, providing more than 81,000 berths. The number of marinas is distributed relatively evenly between coastal (53%) and inland (47%) marinas. However, coastal marinas are significantly larger, with the average marina providing more than 200 berths compared to the average inland marina, which provides 130 berths. Coastal marinas therefore account for 63% of all marina berths in the UK. Table 3.2

Marinas and berths by region Coastal/Tidal

Inland/Non-Tidal

Total

Marinas

Berths

Marinas

Berths

Marinas

Berths

% of total UK berths

North East

1,414

1.7%

North West

1,427

4,105

5,532

6.8%

Yorkshire & the Humber

480

1,684

2,164

2.7%

East Midlands

238

6247

6,485

8.0%

West Midlands

4,666

5.7%

East of England

5,641

4,475

10,116

12.4%

London

1,119

290

1,409

1.7%

South East

17,796

5,885

126

23,681

29.1%

South West

8,880

1,533

10,413

12.8%

Wales

4,839

156

4,995

6.1%

Scotland

5,120

525

5,645

6.9%

N Ireland

1,310

161

1,471

1.8%

Channel Islands

3,313

4.1%

256

51,577

229

29,727

485

81,304

100%

Total UK

Source: BMF / TYHA analysis, 2013

3.2.2

Turnover The core marinas and moorings sector is estimated, by the BMF, to account for turnover of 21 ÂŁ176 million per annum . The majority of this turnover is generated by coastal marinas and moorings providers, which account for more than two thirds of the overall turnover of the sector. The turnover of the nine businesses operating in both sub-sectors is not doublecounted because the turnover data has been disaggregated between the different activities.

BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13 21 BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13

The economic contribution of boating-related tourism in the UK

Table 3.3

Turnover in the marinas and moorings sector, 2012/13 Turnover (ÂŁm)

% of total

Inland marinas and moorings

56.7

32.2%

Coastal marinas and moorings

119.3

67.8%

Total marinas and moorings

176.0

100%

Source: BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13

Figure 3.2 shows the turnover of coastal and inland operators over the last seven years. It shows that turnover from coastal operators has been most affected by the recent recessions, as turnover remains considerably lower than the peak in 2008/09 but has returned to positive growth in the latest year. Turnover in the inland marina sector has remained relatively stable with low levels of real growth between 2006/07 and 2012/13 (after accounting for inflation). Figure 3.1

Marinas and moorings turnover over time (ÂŁm)

Source: BMF, 2013

3.2.3

Trade balance The value of exports and imports arising from the marinas and moorings sector is considered to be a very minor aspect of these core activities and has not been included in this report.

3.2.4

Employment and wages The BMF estimates that 2,250 people were employed by the core marinas and moorings sector in 2012/13, based on information provided by BMF members operating in this sector. These employment estimates are presented in Table 3.4 below. Table 3.4

Employment in the marinas and moorings sector, 2012/13 Employment (FTE jobs)

% of total

800

32.2%

Coastal marinas and moorings

1,450

67.8%

Total marinas and moorings

2,250

100%

Inland marinas and moorings

Source: BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13

Estimates of the wages paid to employees are a significant part of the income-based method for estimating added value, and also provide the basis for estimating income tax contributions. This study uses two different methods to estimate wage costs in the marinas and moorings sector: â&#x2013;

The first approach uses the same assumptions for average wages as the previous studies of inland and coastal marinas, inflated to 2012/13 prices. These were based on 19

The economic contribution of boating-related tourism in the UK

consultation with operators in each sector and suggest an average wage of £20,200 in the inland sector and £22,000 in the coastal sector. These have been multiplied by the latest employment figures for the sector to provide updated estimates of total wages. ■

The second approach uses a typical industry specific ratio of wage costs to turnover, from the Annual Business Survey (ABS), and applies this to the latest turnover data.

The results of this analysis are included in Table 3.5 below. The two approaches produce similar results for both inland and coastal sectors and the mid-point has been used to estimate total annual wages in the marinas and moorings sector of £45 million in 2012/13. Table 3.5

3.2.5

Annual wages paid by the UK marinas and moorings sub-sector, 2012/13 (£ million)

Sector

(1)

(2)

Mid-point

Variance from mid-point

Inland marinas and moorings

+/- 7%

Coastal marinas and moorings

+/- 7%

Total marinas and moorings

+/- 7%

(1)

Sector average wages x employment from BMF Key Performance Indicators 2012/13;

(2)

Annual Business Survey industry turnover: wage ratios x turnover data from BMF Key Performance Indicators 2012/13.

Profitability Previous consultations undertaken with inland and coastal marinas had found that profits varied significantly between sites, depending on a number of factors including the demand for berths, berthing fees, location, and the range of facilities provided. However, the findings of the interviews suggested that 10% of turnover represented a conservative estimate of overall industry net profits. Therefore, profits in the marinas and moorings sector are estimated to total £18 million in 2012/13. This comprises £6 million from inland sites and £12 million amongst coastal marinas and moorings providers.

3.2.6

Taxes The overall tax contributions of the sector are based on estimates of value added tax (VAT), 22 income tax and corporation tax, using the relevant tax rates for 2012/13 . Table 3.6 provides an indication of total tax contributions, recognising that they are based in turn on the above estimates of turnover, wages and profits. The total tax contribution of the marinas and moorings sector has been estimated at almost £50 million. The tax contributions of the inland sector are estimated to be around half of those in the coastal marinas and moorings sector. Table 3.6

Tax estimates, 2012/13

Type of tax

Rate applied

VAT (£m)

20% of output / turnover

Income tax (£m) Corporation tax (£m)

Coastal marinas and moorings

Total marinas and moorings

11.3

23.9

35.2

3.1

6.3

9.5

1.2

2.6

3.9

15.7

32.8

48.5

21% of wages 22% of profits

Inland marinas and moorings

Total tax estimate (£m) (1)

Applies the standard rate of VAT in 2012/13 of 20%;

(2)

In 2012/13, the income tax and national insurance contributions associated with the average income in the marine industry totalled 21%;

(3)

In 2012/13, corporation tax rates were 20% for profits up to £300k and 24% for profits over £1.5m, with marginal relief on rates between £300k and £1,5m. Applying these rules to estimates of profits amongst BMF members suggests an average rate of corporation tax of 22% in the marine industry.

VAT: 20% of estimated turnover; Income Tax: 21% of estimated wages; Corporation Tax: 22% of estimated profits, in line with 2012/13 data

The economic contribution of boating-related tourism in the UK

3.2.7

Value added The value added of the core marinas and moorings sector is presented in Table 3.7. It shows that the marinas and moorings sector continues to contribute significant levels of GVA to the national economy. The three estimates of GVA range from £63 million, under the income approach, to £80 million, using data collected from BMF members under an outputbased approach. An average of the three different approaches has been used to estimate GVA in the core marinas and moorings sector of £71 million in 2012/13. Table 3.7

Estimated value added for the marinas and moorings sector, 2012/13 (£ million)

Measure

Method

Inland marinas and moorings

Coastal marinas and moorings

Total marinas and moorings

Output (BMF)

Turnover and purchases data collected from BMF members

Output (ABS)

ABS ratio used, which reflects the difference between sales and purchases

Income

Wages plus profits

Value added estimate

Average

Source: BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13 and ICF GHK estimates

3.2.8

Supply chain effects The previous sections assessed the direct economic contribution of the marinas and moorings sector. This section builds on that analysis to present estimates of the additional contribution of the marinas and moorings sector to the wider UK economy through indirect effects resulting from the purchase of intermediate goods and services by the marinas and moorings sector in delivering its services. These purchases support additional employment and GVA within the marinas and moorings supply chain. These indirect effects are estimated using economic multipliers. The ONS produces estimates of supply chain multipliers (known as Type I multipliers), which can be used to estimate the indirect effects of different products on the wider UK economy, resulting from their intermediate purchases from other sectors. The latest UK input-output analytical 23 tables provide estimates of these multipliers for 123 different products and services.

ONS, Detailed United Kingdom Input-Output Analytical Tables, 2005 (consistent with UK National Accounts Blue Book 2009 & UK Balance of Payments Pink Book 2009)

The economic contribution of boating-related tourism in the UK

The relevant group for marinas and moorings is the ‘recreational services’ sector, which has a supply chain multiplier of 1.6. This suggests that for every £1 of output generated by the marinas and moorings sector, a further £0.6 of output is generated in the rest of the economy, and every job created in the marinas and moorings sector will result in an additional 0.6 jobs in the rest of the economy. Applying this multiplier suggests that the marinas and moorings sector indirectly supports an additional GVA of £43 million and additional 1,350 FTE jobs amongst its supply chain as a result of its purchases of intermediate goods and services. The marinas and moorings sector therefore supports a total of 3,600 FTE jobs and £114 million of GVA per annum including direct and indirect effects. Table 3.8

Direct and indirect economic contribution of marina and mooring activities, 2012/13 Total marinas and moorings

Direct GVA (£m)

£71 m

Indirect GVA (£m)

£43 m

Total direct and indirect GVA (£m)

£114 m

Direct employment (FTE)

2,250

Indirect employment (FTE)

1,350

Total direct and indirect employment (FTE)

3,600

Source: ICF GHK estimates, 2013

3.2.9

Induced effects It is common for studies of the economic contribution of different sectors to include induced as well as indirect effects. However, ICF GHK believes it can be misleading to attribute all induced effects to the economic contribution of a particular sector at the national level. Indirect effects related to purchases of intermediate goods and services from suppliers can clearly be attributed to the boating tourism sector, or expenditures of watersports participants, since these purchases would be unlikely to take place if participation in boating activities was to cease. However, it is difficult to make the same argument for induced effects. If boating activities did not take place, it is unlikely that the purchases of goods and services made by those individuals currently employed by the tourism sector (directly or indirectly) would change significantly as people would increase participation in other tourism activities, while many employees supported by boating tourism expenditures would find employment in other sectors. Induced multipliers are more appropriate for estimating the economic impact associated with the expenditures of an additional employee in the boating tourism sector, rather than attributing the effects of the expenditures of all direct and indirect employees. However, for consistency with studies of the economic contribution of other sectors, we have included estimates of induced effects below, although these have been excluded from the headline figures. Induced effects are assessed using Type II multipliers that capture both indirect and induced effects. However, the ONS does not provide Type II multipliers for the UK so Scottish 24 25 multipliers have been used to estimate indicative induced effects for each relevant sector . The relevant group for marinas and moorings is the ‘sports and recreation’ sector, which suggests an ‘induced’ GVA multiplier of 1.29 and employment multiplier of 1.23. This suggests that for every £1 of output generated directly and indirectly by the marinas and moorings sector, a further £0.29 of output is generated through the expenditures of

The Scottish Government (May 2013) Input-Output Tables 1998-2009 - Latest Year (2009) The ratio between Scottish Type I and Type II multipliers has been used to estimate an ‘induced’ multiplier for relevant sectors. 25

The economic contribution of boating-related tourism in the UK

associated employees, while an additional 0.23 FTE jobs will be created for every FTE job employed by the sector and its supply chain. Applying this multiplier suggests that the marinas and moorings sector supports an additional GVA of £34 million and additional 1,040 FTE jobs in the UK economy as a result of goods and services purchased by the employees of the sector and its supply chain. Including induced effects would therefore increase the overall contribution of the marinas and moorings sector to 4,600 FTE jobs and £148 million of GVA per annum.

3.2.10

Summary of the economic benefits of marinas and moorings The economic contribution of the core marinas and moorings sector includes: ■

Total GVA of £114 million (comprising direct GVA of £71 million and indirect effects of £43 million);

■

3,600 FTE jobs supported directly (2,250 FTE jobs) and indirectly (1,350 FTE jobs).

The complete list of measures is summarised for the sector in Table 3.9. It shows that coastal marinas are estimated to deliver approximately two thirds of the overall economic contribution of marinas and moorings to the UK economy. Table 3.9

Marinas and moorings sector assessment

Indicator

Units

Inland marinas and moorings

Coastal marinas and moorings

Total marinas and moorings

Turnover

£ million

119

176

Purchases

£ million

Wages

£ million

Profits

£ million

Taxes

£ million

Businesses

Number

300

197

488

Direct employment

FTE jobs

800

1,450

2,250

Total (direct and indirect) employment

FTE jobs

1,280

2,320

3,600

Direct GVA

£ million

Total (direct and indirect) GVA

£ million

114

Source: ICF GHK estimates, 2013

Marina Developments Ltd Marina Developments Ltd (MDL) was established in the 1970s and has become the largest marina group in Europe. MDL currently owns and operates 19 major UK marinas and boatyards in addition to two marinas in Italy and one in Spain. 17 of the UK sites are located in coastal locations, and the remaining two are inland marinas located on the River Thames. The 19 sites provide more than 5,000 coastal marina berths (plus additional dry stack facilities) and 750 inland marina berths. The 19 sites comprise: ■

13 located in the South East, including 11 coastal marinas (Bray Marina, Chatham Maritime Marina, Hamble Point Marina, Hythe Marina Village, Mercury Yacht Harbour, Northney Marina, Ocean Village Marina, Port Hamble Marina, Saxon Wharf, Shamrock Quay Marina, Sparkes Marina) and 2 inland marinas (Penton Hook Marina, Windsor Marina);

■

Five located in the South West (Brixham Marina, Cobbs Quay Marina, Queen Anne’s Battery, Torquay Marina and Dartside Quay); and

■

One located in the East of England (Woolverstone Marina).

The economic contribution of boating-related tourism in the UK

The earlier BMF studies of inland and coastal marinas found that MDL provided significant economic benefits by employing more than 240 people, and providing premises at its marinas for more than 500 marine businesses (chandleries, restaurants, boat service industries, etc.). For example, the core marina operations at Port Hamble Marina were estimated to support 9 FTE jobs and £1.8 million of GVA in 2007, while the overall activities and expenditures associated with the marina were estimated to support a total of 170 FTE jobs and £8.8 million of GVA in the local economy. Similarly, the core marina operations at Penton Hook Marina were estimated to support 6 FTE jobs and £0.7 million of GVA in 2008, while the overall activities and expenditures were estimated to support a total of 77 FTE jobs and £3.9 million of GVA in the local economy.

Napton Narrowboats Napton Narrowboats provides an interesting example as their core business is inland boat hire but they also provide an inland marina. These activities and the associated expenditures of berthholders, visiting boaters and people hiring boats will all have an impact on local tourism. The marina is located at Napton on the Hill in Warwickshire on the junction of the Oxford and Grand Union Canals and therefore provides a good choice of routes for boaters. It has a relatively small mooring basin providing 67 berths. Approximately 85% of these berths are currently occupied, leaving around 10 berths for visiting boats to use. The core marina activities generate more than £100,000 in turnover each year, although this generates demand for additional services provided at the marina, which include: ■

boat repairs and repaints for berth-holders and other local boats; and

■

an on-site shop, which serves passing trade as well as the core customers.

The owners of the marina operate a successful boat hire business. Napton Marina is one of four sites from which customers can hire Napton Narrowboats. The others include Autherley Junction (at the junction of the Shropshire Union and the Staffordshire and Worcestershire Canals in the West Midlands) and two sites in France (on the Canal du Midi and the Canal de Garonne). Napton Narrowboats has 36 boats for hire in the UK and 11 boats in France and customers are estimated to have spent a total of 22,750 person days on Napton Narrowboats in the UK and a further 4,900 person days in France in the last year. The business is also involved in fitting out new boats for the boat hire fleet and for external customers. The marina, boat hire and additional boating and tourism activities generate a combined turnover of £1.3 million (£200,000 of which is generated by operations in France). The business also employs 18 FTE staff, including 15 permanent members of staff. The boat hire customers and berth-holders will also spend a considerable amount of money in the local economy on tourism goods and services as they cruise around the inland waterways. Many hire boat customers are overseas visitors to the UK. In 2010, overseas visitors accounted for 7.3% of boat hire bookings with Napton Narrowboats. Most of these overseas visitors were visiting from elsewhere in Europe (56%), while 24% were from the US, 15% were from Australia and New Zealand, and 5% were from the rest of the world. These wider tourism expenditures are explored further in Section 4.

The economic contribution of boating-related tourism in the UK

3.3

Boat hire, charter, rental and sailing schools / training The boat hire, charter, rental and sailing schools / training sector comprises businesses specialising in inland boat hire, coastal charter, watersports rental and sailing school / training activities. These businesses provide services to UK residents and visitors who want 26 to hire leisure boats or rent watersports equipment or undertake training activities . The sector is a key component of the wider boating tourism industry as it provides a means for people to participate in, and improve their competence in, boating and watersports activities. This sector provides a wide range of services for many different activities (e.g. canoeing, canal boating and yachting), and for people with different levels of expertise and competence. Charges also vary significantly depending on the type of vessel / equipment, with hire charges ranging from around ÂŁ5 to hire a canoe or kayak up to ÂŁ500 or more per day for a yacht charter. Boats and watersports equipment can be hired or chartered on coastal waters, lakes and lochs and the inland waterways managed by approximately 20 27 inland navigation authorities, the largest of which are the Canal and River Trust (CRT) , the Environment Agency, the Broads Authority, the Port of London Authority and Scottish Canals.

A key aspect of the sector is that it provides an opportunity for people to participate in boating and watersports activities without having to own a boat. This supports levels of participation and the associated expenditures on boating goods and services, but also the wider tourism expenditures that are discussed in Section 4. The boat hire and charter services provide single or groups of boats, which can be chartered or hired with crew and provisions or bareboat (i.e. without skipper or captain) from hours to days or a number of weeks. Watersports rental services enable consumers to rent equipment to enable them to participate in watersports activities, usually for a number of hours or days. Sailing schools provide training to individuals who want to undertake boatingrelated training courses. Courses are available for sailing, canal boating, motor boating, powerboats, personal watercraft, canoeing and other watersports. Some businesses own or lease their own fleet of boats or equipment, whereas others provide management services on behalf of private boat-owners. Linkages exist with the other boating tourism sectors, such as the marinas and moorings sector, to provide locations for hire, charter and sailing school / training businesses to store, launch and maintain their fleet. The above example of Napton Marina is one of many where marina activities are combined with this sector.

3.3.1

Business numbers The hire, charter, rental and sailing schools / training sector consists of approximately 838 businesses. This includes 291 businesses providing inland boat hire, 291 providing coastal charters, 47 providing watersports rental and 296 providing sailing schools and training activities. However, 87 of these businesses are active in more than one market and the total

The sailing school / training activities are those focused on individual consumers and exclude corporate training programmes. 27 Formerly British Waterways

The economic contribution of boating-related tourism in the UK

number of businesses across all four sub-sectors totals 838. These estimates are based on an analysis of BMF membership data, and Experian data for non-members, and are 28 consistent with the data used in the latest BMF Key Performance Indicators report .It should be noted that the BMF data for boat hire businesses has some overlap with the passenger boat sector and adjustments have been made when later aggregating the two sectors to overcome any issues of double-counting. Table 3.10

Business numbers in the boat hire, charter, rental and sailing schools / training sector, 2012/13 No. of businesses

% of total

Inland boat hire

291

34.7%

Coastal charter

291

34.7%

Watersports rental

5.6%

Sailing schools / training

296

35.3%

Total hire, charter and sailing schools / training

838

100%

Source: BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13 Note: Rows do not sum to the total because of businesses that are active in more than one sub-sector

3.3.2

Turnover The hire, charter and sailing schools / training sector is estimated to account for ÂŁ260 million 29 of turnover per annum . The coastal charter sub-sector has the largest turnover despite having a similar number of businesses to the inland boat hire and sailing schools / training sub-sectors. Coastal charter businesses account for almost 40% of the total sector, which suggests that businesses operating in this sector have a relatively high turnover compared to the other sub-sectors. In contrast, the sailing schools / training and watersports rental businesses tend to be smaller with a much lower turnover per business. Table 3.11

Turnover in the boat hire, charter, rental and sailing schools / training sub-sector, 2012/13 Turnover (ÂŁm)

% of total

Inland boat hire

90.4

34.8%

Coastal charter

102.0

39.2%

Watersports rental

7.4

2.8%

Sailing schools / training

60.2

23.2%

Total hire, charter and sailing schools / training

260.0

100%

Source: BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13 Note: The turnover of the 87 businesses operating in multiple sub-sectors has been disaggregated between the different activities to avoid double-counting.

Figure 3.3 shows the turnover of coastal charter, training and inland boat hire businesses over the last seven years. It shows a similar situation to the marinas and moorings sector, with coastal charter and training operators most affected by the recent recessions. Turnover 28

BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13 29 BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13

The economic contribution of boating-related tourism in the UK

for charter and training activities remains approximately ÂŁ20 million per annum lower than the peak in 2008/09 but has returned to positive growth in the latest two years. The inland boat hire sector appears to have been much more resilient to the economic downturn and its turnover has been increasing in nominal terms since 2008/09, although growth in real terms (after accounting for inflation) is still very low. Figure 3.2

Charter, training and boat hire turnover over time (ÂŁm)

Source: BMF, 2013

3.3.3

Trade balance The contribution of the sector to UK exports can be estimated from the data that the BMF collects from its annual survey of members. This data suggest that the hire, charter, rental and sailing schools / training sector exports ÂŁ69 million of services per annum, which represents around 27% of the overall turnover of the sector. The level of exports varies widely across the different sub-sectors from less than 5% of inland boat hire turnover, to around 45% of the turnover of coastal charter businesses. The member survey does not collect data on imports, and national statistics focus at a relatively broad level, so it is difficult to estimate imports or net exports and the contribution of the sector to the UK trade balance.

3.3.4

Employment and wages The BMF estimates that 3,773 people were employed by the hire, charter, rental and sailing schools / training sector in the UK in 2012/13 and these estimates are presented in Table 3.12. Table 3.12

Employment in the boat hire, charter, rental and sailing schools / training sector, 2012/13 Employment (FTE jobs)

% of total

Inland boat hire

1,524

40.4%

Coastal charter

1,018

27.0%

101

2.7%

Sailing schools / training

1,130

29.9%

Total hire, charter and sailing schools / training

3,773

100%

Watersports rental

Source: BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13

The economic contribution of boating-related tourism in the UK

The data suggest that the largest employer is the inland boat hire sector, which accounts for 40% of all employment in the sector, followed by the sailing schools / training sub-sector (30% of employment) and the coastal charter sub-sector (27%). Wage costs have been estimated using two different methods: ■

The first approach uses 2012 wage data from the Annual Survey of Hours and Earnings 30 (ASHE) and multiplies these by the above employment figures for the sector; and

■

The second approach uses a typical industry specific ratio of wage costs to turnover, from the Annual Business Survey (ABS), and applies this to the latest turnover data.

The results of this analysis are included in Table 3.13 below. The mid-point of the two approaches has been used to estimate total annual wages of each sub-sector. These broadly follow the above trends in employment with inland boat hire accounting for the largest proportion of wages in the sector. The total wages paid by the hire, charter, rental and sailing schools / training sector was estimated to be £75 million in 2012/13. Table 3.13

3.3.5

Annual wages paid by the boat hire, charter, rental and sailing schools / training sector, 2012/13 (£ million)

Sector

(1)

(2)

Mid-point

Variance from mid-point

Inland boat hire

+/- 23%

Coastal/sea charter

+/- 5%

Watersports rental

+/- 0%

Sailing schools / training

+/- 16%

Total hire, charter and sailing schools / training

+/- 12%

(1)

Annual Survey of Hours and Earnings: wage data x employment from BMF Key Performance Indicators 2012/13;

(2)

Annual Business Survey industry turnover: wage ratios x turnover data from BMF Key Performance Indicators 2012/13.

Profitability Profits have been estimated using the same assumption that overall industry net profits are equivalent to 10% of turnover. Therefore, profits in the hire, charter, rental and sailing schools / training sector are estimated to total £26 million in 2012/13.

3.3.6

Taxes The same tax assumptions have also been applied to the above estimates of turnover, wages and profits in order to produce the estimates of VAT, income tax and corporation tax that are presented in Table 3.14 below. This suggests that the total hire, charter, rental and sailing schools / training sector contributes approximately £74 million in taxes per annum. The large majority (71%) of these taxes are associated with VAT, followed by income taxes (21%) and corporation tax (8%). The coastal charter sub-sector contributes the greatest amount of tax, primarily because of the larger turnover and VAT associated with this sub-sector.

Employment data in the hire, charter and rental sectors have been multiplied by the median full-time wage for SIC 77.21 - Renting of recreational & sports equipment (which includes renting pleasure boats, canoes, sail boats, etc.). Employment data in the sailing schools sector has been multiplied by the median full-time wage for SIC 85.53 - Driving school activities (which includes sailing schools).

The economic contribution of boating-related tourism in the UK

Table 3.14

Tax estimates, 2012/13

Type of tax

Rate applied

VAT (£m)

20% of output / 1 turnover

Income tax (£m)

21% of wages

Corporation tax (£m)

Inland boat hire

Coastal / sea charter

Watersports rental

Sailing schools / training

Total hire, charter and sailing schools / training

18.1

20.4

1.5

12.0

52.0

5.5

4.6

0.4

5.3

15.8

2.0

2.2

0.2

1.3

5.7

25.5

27.3

2.0

18.6

73.5

22% of profits

Total tax estimate (£m)

3.3.7

(1)

Applies the standard rate of VAT in 2012/13 of 20%;

(2)

In 2012/13, the income tax and national insurance contributions associated with the average income in the marine industry totalled 21%;

(3)

Value added The three estimates of GVA in the total hire, charter, rental and sailing schools / training sector are summarised in Table 3.15. They range from £83 million, using data collected from BMF members under an output-based approach, to £125 million, using data from the ABS to reflect relationships between turnover and GVA. The average of these three approaches is £103 million and has been used to estimate the overall GVA of the sector. Table 3.15

Estimated value added for the boat hire, charter, rental and sailing schools / training sector, 2012/13 (£ million)

Measure

Method

Inland boat hire

Coastal / sea charter

Watersports rental

Sailing schools / training

Total hire, charters and sailing schools / training

Output (BMF)

Turnover and purchases data collected from BMF members

Output (ABS)

ABS ratio used, which reflects the difference between sales and purchases

125

Income

Wages plus profits

101

Value added estimate

Average

103

Source: BMF (2013) UK Leisure, Superyacht and Small Commercial Marine Industry Key Performance Indicators 2012/13 and ICF GHK estimates

3.3.8

Supply chain effects This section estimates the additional contribution of the hire, charter, rental and sailing schools / training sectors to the wider UK economy through indirect effects. These indirect effects result from purchases of intermediate goods and services, which support additional employment and GVA within their respective supply chains. The sub-sectors fall within different sectors, such that: ■

the boat hire, coastal charter and watersports rental sub-sectors fall within the wider ‘renting of machinery’ sector, which has a supply chain multiplier of 1.69. This multiplier suggests that every £1 of output generated in these sectors will generate a further £0.69 29

The economic contribution of boating-related tourism in the UK

of output in the rest of the economy, and every job will result in an additional 0.69 jobs in the rest of the economy; and ■

the sailing schools / training sub-sector falls within the wider ‘education’ sector, with a supply chain multiplier of 1.49. Here every £1 of output generated by the sailing schools / training sub-sector will generate a further £0.49 of output in the rest of the economy, and every job will result in an additional 0.49 jobs in the rest of the economy

Applying these multipliers suggests that the sector indirectly supports an additional £65 million and an additional 2,377 FTE jobs amongst its supply chain as a result of its purchases of intermediate goods and services. The total hire, charter, rental and sailing schools / training sector therefore supports a total of 6,150 FTE jobs and £168 million of GVA per annum through direct and indirect effects. Table 3.16

Direct and indirect economic contribution of boat hire, charter and sailing school / training activities, 2012/13

Region

Inland boat hire

Coastal/ sea charter

Watersports rental

Sailing schools / training

Total hire, charters, and sailing schools / training

Direct GVA (£m)

£36m

£3m

£28m

£103m

Indirect GVA (£m)

£25m

£2m

£14m

£65m

Total direct and indirect GVA (£m)

£61m

£5m

£42m

£168m

Direct employment (FTE)

1,524

1,018

101

1,130

3,773

Indirect employment (FTE)

1,052

702

554

2,377

Total direct and indirect employment (FTE)

2,576

1,720

171

1,684

6,150

Source: ICF GHK estimates, 2013

3.3.9

Induced effects Using the same approach as described above, suggests indicative ‘induced’ GVA multipliers of 1.15 for ‘renting and leasing activities’ and 1.36 for ‘education’ activities and employment multipliers of 1.07 and 1.25 respectively. Applying these multipliers suggests that the hire, charter, rental and sailing schools / training sector is estimated to support an additional GVA of £34 million and additional 730 FTE jobs in the UK economy as a result of goods and services purchased by the employees of the sector and its supply chain. Including induced effects would therefore increase the overall contribution of the sector to 6,900 FTE jobs and £202 million of GVA per annum.

The economic contribution of boating-related tourism in the UK

3.3.10

Summary of the economic benefits of hire, charter and sailing school/training activities The economic contribution of the boat hire, charter and sailing schools / training sectors includes: ■

Total GVA of £168 million (comprising direct GVA of £103 million and indirect effects of £65 million);

■

6,150 FTE jobs supported directly (3,770 FTE jobs) and indirectly (2,380 FTE jobs).The complete list of measures is summarised for each sub-sector in Table 3.16.

It shows that inland boat hire, coastal charter and sailing school / training activities are the largest sub-sectors and are relatively even in terms of their contribution to the UK economy. Boat hire and charter activities generate the largest turnover and add the greatest value to the UK economy, although the sailing schools / training sub-sector employs a relatively large number of people. Table 3.17

Boat hire, charter and sailing schools / training sector assessment, 2012/13

Indicator

Units

Inland boat hire

Coastal/sea charter

Watersports rental

Sailing schools / training

Total hire, charters and sailing schools / training

Turnover

£ million

102

260

Purchases

£ million

177

Wages

£ million

Profits

£ million

Taxes

£ million

25.5

27.3

2.0

18.6

73.5

Businesses

Number

291

296

838

Direct employment

FTE jobs

1,524

1,018

101

1,130

3,773

Total (direct and indirect) employment

FTE jobs

2,576

1,720

171

1,684

6,150

Direct GVA

£ million

103

Total (direct and indirect) GVA

£ million

168

Source: ICF GHK estimates, 2013

ABC Leisure Group The ABC Leisure Group Ltd (formerly known as Alvechurch Boat Centres) is well established within the inland boating sector, providing hire fleet and marina services for more than 35 years. ABC Leisure employs 124 FTE staff and generated a turnover of £7.8 million in the last financial year. It currently offers inland boat hire from 13 locations across the UK and has built up a fleet of 200 boats, which can be hired for any length of time between one day and more than two weeks. ABC Leisure also owns and operates inland marinas from nine of the 13 locations, collectively comprising more than 400 berths, and including four marinas in the West Midlands, two in the North West, one in the South West, one in the East Midlands, and one in Wales. The other sites include Aldermaston Wharf in the South East, which is owned by ABC Leisure, and three franchised hire bases. Alvechurch Marina is a marina and hire base and can used to demonstrate the local tourism impacts of these activities. The economic and tourism impacts of Alvechurch Marina were assessed in the BMF report on inland marinas, which estimated that 4,800 people hired boats from Alvechuch Marina alone in 2008. These people were estimated to spend an average of seven days on the local inland waterways, totalling approximately 34,000 visitor days in the local economy. The total economic impact of the marina and boat hire operations was estimated to support approximately 50 FTE jobs and more than £1.8 million of GVA in the local economy in 2008.

The economic contribution of boating-related tourism in the UK

Sunsail Ltd Sunsail Ltd was founded in 1974 and has grown significantly over time to become the world’s largest sailing and watersports holiday company. It is part of the TUI Travel Plc group, which includes ‘Le Boat’ and ‘The Moorings’ businesses, which also provide coastal charter and sailing school / training activities. Sunsail Ltd offers a wide choice of sailing holidays with more than 800 yachts in 30 locations across the world, including the UK, Caribbean, Mediterranean, Indian Ocean, North America, South Pacific and South East Asia. Customers have choose from a range of services including independent charter, flotilla holidays, beach club holidays, and skippered yacht charter, to cater for those with different levels of expertise and different holiday demands and experiences. In addition to the yacht charter and sailing holidays, Sunsail also offers sailing schools (offering a variety of RYA training course), team building and corporate events and racing activities to customers in the UK. The UK headquarters are located at Port Solent Marina in Portsmouth and the 2007 BMF report on Coastal Marinas estimated that Sunsail employed 215 FTE staff at Port Solent in 2007. All of the above Sunsail activities will also attract visitors to participate in boating activities and spend money in local tourism economies.

Tall Ships Trust The Tall Ships Youth Trust is a registered charity founded in 1956. It delivers sailing experiences to support the personal development of young people through the crewing of ocean going sail training vessels and around 70% of the young people are disadvantaged or disabled. The Tall Ships Youth Trust is the oldest and largest sail training charity in the UK for young people aged between 12 and 25. The current fleet of ships and yachts comprises one tall ship (a 60 metre brig), four 22 metre yachts and a 19 metre catamaran. The charity has sailed a total of more than 1.8 million nautical miles with more than 100,000 young people. More than 3,000 people sail with the Tall Ships Youth Trust each year and voyages range in length from a single night to 20 nights. The Trust receives income from voluntary donations and from the operation of the sailing programmes and is supported by more than 2,500 volunteers and regular supporters. Expenditures total approximately £3 million per annum and are mainly ship/boat-related 31 costs associated with the delivery of the sailing programmes . The Tall Ships Trust also works in collaboration with Tall Ships Adventures to offer sail training voyages to all people aged between 12 and 80 as no sailing experience is required. The Trust offers a range of RYA and other training programmes including: RYA shore-based courses, start yachting courses, and competent crew courses; cadetships, and the gold residential section of the Duke of Edinburgh Award.

3.4

Passenger boats The passenger boat sector provides a wide range of leisure boating experiences on rivers, lakes and coastal waters across the UK and is therefore a key provider of boating-related tourism services. The sector is very diverse, comprising very small businesses offering day trips as well as much larger businesses owning fleets of boats offering a range of cruising, boat trip and ferry services. The passenger boats sector is not currently included in the BMF Key Performance 32 Indicators , so a slightly different approach has been used to estimate the economic contribution of the sector to the UK economy. There is also a small amount of overlap

Tall Ships Youth Trust (2012) Financial Statements – Year Ended 29 February 2012 The Passenger Boats Association has recently joined the BMF so passenger boats will be included in BMF data in the future. 32

The economic contribution of boating-related tourism in the UK

between passenger boat businesses and the boat hire businesses described above, based on BMF member data. However, adjustments have been made to take account of this and remove any double-counting. For the purposes of this study, we have defined the passenger boat sector as comprising all businesses and vessels providing passenger transport services to ‘leisure’ passengers (in some capacity) on inland and coastal waters in and around the UK. The following analysis has taken steps to exclude the activities and economic benefits associated with commuters, as these do not relate to tourism, and we have also excluded activities providing overseas ferry services that link the UK to Ireland and mainland Europe. An economic impact assessment of the passenger boat industry was undertaken by the 33 PBA in 2009. This study excluded businesses with a turnover of more than £6 million, which would have also excluded these large operators of overseas ferry services. The PBA 34 study was based primarily on the ‘Trip Out’ guide of passenger boat services , a survey of passenger boat employers and an analysis of relevant company reports. However, it focused on all passenger boat services, including commuter services, and therefore had a wider scope than this study, which focuses solely on tourism-related activities.

3.4.1

Business numbers The ‘Trip Out’ guide provides a directory of passenger boat services in the UK and is 35 published every two years. The 2011/12 edition provides a list of 394 operators of 36 passenger boat services and 822 individual vessels . These vessels range from small boats capable of carrying 12 passengers up to large seagoing vessels with capacities in excess of 500 passengers. However, figures from the ABS and Interdepartmental Business Register (IDBR) suggest that the sector is significantly larger than this. Both sources suggest there are approximately 750 businesses listed in the sectors relating to passenger water transport on sea and coastal waters (SIC 50.1) and inland waters (SIC 50.3), or 730 businesses after excluding those with a turnover in excess of £5 million (to exclude large providers of overseas ferry services). However, there are two large operators, Thames Clippers and City Cruises, which provide services for significant numbers of ‘leisure’ passengers but are excluded under this approach. Including these businesses increases the total number of businesses in the sector to 732. The ‘Trip Out’ data suggest a fairly even number of businesses providing inland and coastal services. The ABS and IDBR data provide similar estimates of inland operators but estimate there to be a much larger number of coastal operators, as shown in Table 3.18. This

The Passenger Boat Association (2009) The UK Passenger Boat Industry - What Value to the Economy? G.P. Hamer (2011) Trip Out 2011/12: A Guide to the Passenger Boat Services of the British Isles 35 G.P. Hamer (2011) Trip Out 2011/12: A Guide to the Passenger Boat Services of the British Isles 36 After excluding the 13 businesses and 69 vessels relating to the provision of overseas ferry services. 34

The economic contribution of boating-related tourism in the UK

suggests that the IDBR captures a larger number of coastal passenger boats and is expected to provide a more accurate estimate of the number of passenger boat businesses. Since all of these vessels are expected to be used to transport tourists (to varying degrees), these businesses are all relevant to this study. Table 3.18

Businesses in the passenger boats sector, 2012/13 No. of businesses

% of total

Inland passenger boats

182

25%

Coastal passenger boats

550

75%

Total passenger boats

732

100%

Source: ONS (2013) UK Business: Activity, Size and Location (based on IDBR data on 12 March 2013), and ICF GHK analysis

3.4.2

Turnover There are also significant differences in the turnover estimates of the different sources. The 37 economic impact assessment undertaken by the PBA suggests that the total turnover of the passenger boat sector was £111 million in 2008. ABS data suggest that the turnover associated with passenger water transport on sea and coastal waters (SIC 50.1) and inland waters (SIC 50.3) totalled £2.8 billion in 2012, although this figure is inflated by the considerable turnover associated with the operators of overseas ferry services. To provide a more accurate estimate, IDBR data has again been used to exclude businesses with a turnover in excess of £5 million and provide a revised turnover 38 estimate of £214 million for the sector. However, as described above, this excludes Thames Clippers and City Cruises and adding their turnover increases the total for the sector to £241 million. This equates to an average turnover of £329,000 per business, although it should be noted that this figure is skewed by the small number of large businesses operating in the sector. In order to obtain a turnover per boat figure, we have assumed that the ‘Trip Out’ guide provides comprehensive coverage of all operators with more than one boat. The additional 336 operators in the IDBR estimates are therefore assumed to add 336 boats to the 822 listed in the ‘Trip Out’ guide to total 1,158 vessels. The average turnover per boat is therefore estimated to be £208,000, although this figure will vary considerably from small trip boats to larger sightseeing tours and ferry services. Furthermore, all of the above figures include turnover generated from providing services to commuters that are not associated with tourism and need to be excluded from the analysis. It is not possible to disaggregate the ABS and IDBR estimates any further, so this analysis has been based on the ‘Trip Out’ guide. The ‘Trip Out’ guide suggests that most of the passenger boats in the UK (63%) specialise in boat trips and are unlikely to provide ferry services that might be used for commuting. The remaining 37% of vessels are involved, at least partly, in providing scheduled ferry services. A more detailed analysis of the vessels providing ferry services suggests that: ■

Approximately 13% of UK vessels are involved to some extent in providing ferry services linking mainland UK to islands such as the Scottish islands, Isles of Scilly, Isle of Wight, Isle of Man, etc. These services are likely to be used by some regular commuters as well as leisure and business tourists; and

The Passenger Boat Association (2009) The UK Passenger Boat Industry - What Value to the Economy? ONS (2013) UK Business: Activity, Size and Location (based on IDBR data on 12 March 2013). This report provides data on the number of businesses in SIC 50.1 and SIC 50.3 within different bands of turnover. ICF GHK excluded all businesses with a turnover in excess of £5 million, and then applied the mid-point of each turnover band to all businesses within that band, in order to estimate the overall turnover of the sector to be £214 million. 38

The economic contribution of boating-related tourism in the UK

■

Approximately 24% of UK vessels are involved to some extent in providing ferry services between mainland UK locations, across and along rivers, lakes, and coastal waters. These services are more likely to be used by commuters, such as those travelling to work on the River Thames, or crossing the River Mersey, River Clyde or River Tamar.

There is limited data available on the relative numbers of commuters and tourists using ferry services. However, Department for Transport statistics suggest that the large majority of overseas travel by sea is for holiday purposes or to visit friends or relatives. In 2011, only 39 13% of travel by sea was for business purposes , although these figures will include the larger overseas ferry operators that have been excluded here, and commuter use of ferries to UK islands is likely to exceed this figure. For mainland ferry services, the National Travel Survey includes ferries with non-local buses, taxis, air and light rail in an ‘other public transport’ category. The data suggest that in 2012, commuting accounted for 13% of all ‘other public transport’ trips, while trips for education, 40 shopping and personal business purposes accounted for a further 37% of trips . This suggests that between 13 and 50% of these trips are unlikely to be related to tourism. A large operator of passenger boat services has also confirmed that commuters account for half of its overall passengers, which supports the results of the National Travel Survey. Based on this evidence, it has been assumed that commuters account for: ■

25% of passengers on ferry services to UK islands; and

■

50% of passengers on mainland UK ferry services.

These assumptions are applied in Table 3.19 to provide a revised estimate of £204 million of turnover amongst passenger boats that is directly related to tourism. Table 3.19

Turnover in the passenger boats sector, 2012/13 ‘Trip Out’ vessels (number)

% of total

Revised vessels estimate (number)

Total turnover (£m)

% of tourismrelated turnover

Tourismrelated turnover (£m)

Boats providing cruises and boat trips only

519

63%

731

152

100%

152

Boats providing ferry services to UK islands

103

13%

145

75%

Boats providing ferry services on UK mainland

200

24%

282

50%

Total passenger boats

822

100%

1,158

241

204

Source: ICF GHK analysis, 2013

It is estimated that £122 million of this turnover (60%) is generated by coastal passenger boats and £82 million (40%) is generated by inland boats, based on ratios generated from the ‘Trip Out’ guide and adjusted for the additional 336 vessels, which are all assumed to be coastal vessels.

3.4.3

Trade balance The passenger boat services described in this section are all delivered on UK waters, although the expenditure of foreign visitors on passenger boat services should be treated as exports. Overseas visitors are described in section 4.6.3 and, in the absence of alternative data, it is assumed that overseas visitors account for 10% of all passenger boat customers, which would imply that exports equate to 10% of turnover, or £20 million.

39 40

Department for Transport (2012) Transport Statistics Great Britain 2012 – Complete report Department for Transport (2013) National Travel Survey: 2012

The economic contribution of boating-related tourism in the UK

3.4.4

Employment and wages The PBA report suggests that the passenger boat sector employs 4,000 staff in the peak season and 2,000 in the off-peak season, although the duration of these seasons is not clear. An alternative approach, using IDBR data, estimates employment in the sector to be 3,296 FTE jobs, comprising 1,988 FTE jobs working on coastal passenger boats and 1,308 41 FTE jobs working on inland passenger boats . Adding employees for Thames Clippers and City Cruises increases the number of employees in the inland sector by 310, to 1,618 FTE jobs, resulting in a total of more than 3,600 FTE jobs across the sector as a whole. Table 3.20

Employment in the passenger boats sector, 2012/13 Employment (FTE jobs)

% of total

Inland passenger boats

1,618

45%

Coastal passenger boats

1,988

55%

Total passenger boats

3,606

100%

Source: ONS (2013) UK Business: Activity, Size and Location (based on IDBR data on 12 March 2013), and ICF GHK analysis

Total wages in the sector have been estimated, based on the median full-time wage for coastal passenger boat employees of £26,728. This estimates total wages in the sector to be £96 million per annum, as shown in Table 3.21. Table 3.21

Annual wages paid by the UK passenger boats sector, 2012/13

Sector

Wages (£m)

% of total

Inland passenger boats

45%

Coastal passenger boats

55%

Total passenger boats

100%

Source: ONS (2012) Annual Survey of Hours and Earnings, 2012 Provisional Results and ICF GHK analysis

3.4.5

Profitability Profits have been estimated using the same assumption that overall industry net profits are equivalent to 10% of turnover. Therefore, profits in the passenger boat sector are estimated to total £20 million in 2012/13.

ONS (2013) UK Business: Activity, Size and Location (based on IDBR data on 12 March 2013). This report provides data on the number of businesses in SIC 50.1 and SIC 50.3 within different bands of employment. To be consistent with the turnover analysis, ICF GHK excluded the largest businesses and focused on the 550 smallest businesses, and then applied the mid-point of each employment band to all businesses within that band.

The economic contribution of boating-related tourism in the UK

3.4.6

Taxes The same assumptions have been applied to the above estimates of turnover, wages and profits in order to produce the estimates of VAT, income tax and corporation tax presented in Table 3.22 below. This suggests that the passenger boat sector contributes more than £65 million in taxes per annum. Table 3.22

Tax estimates, 2012/13

Type of tax

Rate applied

VAT (£m)

20% of output / turnover

Inland passenger boats

Coastal passenger boats

Total passenger boats

16.4

24.4

40.8

9.1

11.2

20.2

1.8

2.7

4.5

27.3

38.2

65.5

Income tax (£m)

21% of wages

Corporation tax (£m)

22% of profits

Total tax estimate (£m)

3.4.7

(1)

Applies the standard rate of VAT in 2012/13 of 20%;

(2)

In 2012/13, the income tax and national insurance contributions associated with the average income in the marine industry totalled 21%;

(3)

Value added The value added of the passenger boat sector is presented in Table 3.23 and has been estimated to be £106 million for the total passenger boat sector. Given the lack of up to date industry data, estimates of value added in the passenger boat sector have been derived in two ways, rather than three, and then averaged in order to provide one consolidated estimate. This total is split fairly evenly between inland and coastal sub-sectors, which highlights the relatively high value added per business in the inland sector. Table 3.23

Estimated value added for the passenger boats sector, 2012/13 (£ million)

Measure

Method

Inland passenger boats

Coastal passenger boats

Total passenger boats

Output (BMF)

ABS ratio used, which reflects the difference between sales and purchases

Income

Wages plus profits

117

Value added estimate

Average

106

Source: ONS (2013) Annual Business Survey and ICF GHK analysis

3.4.8

Supply chain effects This section estimates the additional contribution of the passenger boats sector to the wider UK economy through indirect effects. These indirect effects result from purchases of intermediate goods and services, which support additional employment and GVA within the passenger boats supply chain. The passenger boats sector falls within the wider ‘water transport’ sector, which has a supply chain multiplier of 1.69. Applying this multiplier suggests that the passenger boats sector indirectly supports an additional £73 million GVA and an additional 2,488 FTE jobs amongst its supply chain as a result of its purchases of intermediate goods and services. The total passenger boats sector therefore supports a total of 6,100 FTE jobs and £179 million of GVA per annum through direct and indirect effects.

The economic contribution of boating-related tourism in the UK

Table 3.24

Direct and indirect economic contribution of passenger boats activities, 2012/13

Region

Total passenger boats

Direct GVA (£m)

£106 m

Indirect GVA (£m)

£73 m

Total direct and indirect GVA (£m)

£179 m

Direct employment (FTE)

3,606

Indirect employment (FTE)

2,488

Total direct and indirect employment (FTE)

6,094

Source: ICF GHK estimates, 2013

3.4.9

Induced effects The approach described above for the marinas and moorings sector has also been applied to the passenger boats sector. It suggests an indicative ‘induced’ GVA multiplier of 1.24 and employment multiplier of 1.26 for ‘water transport’ activities. Applying these multipliers estimates the passenger boat sector to support an additional GVA of £43 million and additional 1,580 FTE jobs in the UK economy as a result of goods and services purchased by the employees of the sector and its supply chain. Including induced effects would therefore increase the overall contribution of the sector to 7,700 FTE jobs and £222 million of GVA per annum.

3.4.10

Summary of the economic benefits of the passenger boats sector The economic contribution of the passenger boats sector includes: ■

Total GVA of £179 million (comprising direct GVA of £106 million and indirect effects of £73 million);

■

6,100 FTE jobs supported directly (3,610 FTE jobs) and indirectly (2,490 FTE jobs).

The complete list of measures is summarised in Table 3.24. It shows a relatively even split between the economic contribution of inland and coastal services. Inland passenger boats are estimated to support a larger economic contribution in terms of GVA, while coastal passenger boats are estimated to support a larger number of jobs. Table 3.25

Passenger boats sector assessment, 2012/13

Indicator

Units

Inland passenger boats

Coastal passenger boats

Total passenger boats

Turnover

£ million

122

204

Purchases

£ million

108

Wages

£ million

Profits

£ million

Taxes

£ million

65.5

Businesses

Number

182

550

732

Direct employment

FTE jobs

1,618

1,988

3,606

Total (direc and indirect) employment

FTE jobs

2,734

3,360

6.094

Direct GVA

£ million

106

Total (direct and indirect) GVA

£ million

179

Source: ICF GHK estimates, 2013

The economic contribution of boating-related tourism in the UK

French Brothers Ltd French Brothers is a family-run business offering a range of passenger boat services on the Thames from bases at Windsor, Runnymede and Maidenhead. The business was established in 1978 and has since grown to provide a fleet of vessels that includes 13 large passenger vessels. The fleet includes two genuine steam boats, the SL Nuneham and SL Streatley, both of which were invited to participate in the Diamond Jubilee Pageant in 2012. French Brothers has become one of the top ten largest passenger boat companies in the UK. It offers a range of services to leisure passengers including: public boat trips between various locations along the Upper Thames; trips and services delivered for groups and tour operators; private charter services for corporate and private events; and a range of special events including casino evenings, sightseeing and nature cruises. It carries approximately 150,000 passengers per year on public trips alone and many more as part of private charters and events. It therefore generates a significant impact through its own operations but also through the wider tourism expenditures of passengers in the local economy, which supports additional employment and GVA. French Brothers was awarded the TripAdvisor 2013 Certificate of Excellence and was also voted the best inland boat operator in the 2012 Group Travel Organiser Magazine Awards. It also owns Bray Boats, Thames Steam Packet Boat Co, and Windsor Boats, all of which provide passenger boat services on the Thames.

3.5

Summary of total boating tourism sector The economic contribution of the total boating tourism sector is presented below. The overall economic contribution includes: ■

Direct GVA of £264 million;

■

Indirect GVA of £170 million supported amongst suppliers;

■

A total GVA of £434 million supported directly and indirectly by boating tourism activities and expenditures;

■

9,100 FTE jobs directly employed by 2,000 businesses ;

■

5,800 indirect FTE jobs supported amongst suppliers; and

■

A total of 14,900 FTE jobs supported directly and indirectly by boating tourism activities and expenditures.

The complete list of measures is summarised in Table 3.26 below. 42

The figures have been adjusted to account for businesses offering multiple activities, such as marinas offering boat hire services, based on BMF members data. It has also been assumed that 15% of the passenger boat companies are also involved in delivering marinas, moorings, hire, charter, rental or sailing school activities

The economic contribution of boating-related tourism in the UK

Table 3.26

Total boating tourism sector assessment, 2012/13

Indicator

Units

Marinas & moorings

Hire, charters & sailing schools / training

Passenger boats

Total boating tourism*

Turnover

£ million

176

260

204

609

Purchases

£ million

177

108

365

Wages

£ million

202

Profits

£ million

Taxes

£ million

178

Businesses

Number

497

925

732

2,044

Direct employment

FTE jobs

2,250

3,773

3,606

9,088

Indirect employment

FTE jobs

1,350

2,377

2,488

5,842

Total employment

FTE jobs

3,600

6,150

6,094

14,930

Direct GVA

£ million

103

106

264

Indirect GVA

£ million

170

Total GVA

£ million

114

168

179

434

Source: ICF GHK estimates Notes: * The number of businesses has been adjusted to account for businesses offering multiple activities, such as marinas offering boat hire services, based on BMF members data. It has also been assumed that 15% of the passenger boat companies are also involved in delivering marinas, moorings, hire, charter, rental or sailing school / training activities.

It should also be noted that, if induced effects were also included, the overall economic contribution of the boating tourism sector would increase to 18,470 FTE jobs and £539 million of GVA per annum.

3.6

Regional distribution The above economic indicators can be disaggregated by regions using the following sources: ■

BMF data which shows the distribution of turnover and employment by region, based on BMF member data and analysis of non-members, for the marinas and moorings sector 43 and the hire, charter, rental and sailing schools / training sector ;

■

the ‘Trip Out’ guide provides a regional distribution of passenger boats, which can be used to provide an approximate regional distribution of national economic indicators for the leisure passenger boat industry.

The BMF data disaggregates turnover and employment by region according to the location of head offices rather than individual sites.

The economic contribution of boating-related tourism in the UK

Figure 3.3

Map of UK Regions

The data in Table 3.27 show the regional distribution of the above economic benefits for the boating tourism industry as a whole. It shows that a third of boating tourism turnover is generated in the South East, which is due to the large number of boating tourism activities taking place on the River Thames and the South Coast. The South West generates the second largest turnover from boating tourism activities and generates the highest turnover from passenger boat activities. The relative distribution of GVA between regions is similar since it uses the same approach as turnover. Boating tourism businesses in the South East are estimated to have contributed more than £140 million of GVA to the UK economy in 2012/13 (including direct and indirect effects). Boating tourism businesses in the South West, Scotland and London have generated relatively high levels of GVA due to the high incidence of passenger boat activities in these regions, which generate higher levels of GVA per £1 of turnover than the other boating tourism sectors. Table 3.27

Regional distribution of the economic contribution of the boating tourism industry

Region

Total GVA (including direct and indirect effects)

Turnover

Total employment (including direct and indirect effects)

Region

£m

FTE jobs

North East

1.4%

1.5%

262

1.8%

North West

5.3%

5.4%

930

6.2%

Yorkshire & the Humber

1.8%

1.9%

327

2.2%

East Midlands

3.5%

3.4%

490

3.3%

West Midlands

5.4%

948

6.3%

East

8.6%

8.3%

1,386

9.3%

London

8.9%

9.4%

1,367

9.2%

South East

209

34.2%

141

32.5%

3,866

25.9%

The economic contribution of boating-related tourism in the UK

Region

Total GVA (including direct and indirect effects)

Turnover

Total employment (including direct and indirect effects)

Region

ÂŁm

FTE jobs

South West

16.2%

16.6%

2,746

18.4%

Wales

3.5%

3.7%

639

4.3%

Scotland

9.0%

9.8%

1,647

11.0%

N Ireland / Other

2.2%

322

2.2%

Total UK

609

100%

434

100%

14,930

100%

Source: ICF GHK analysis, 2013

The regional distribution of employment differs from turnover and GVA as it uses BMF data on employment to disaggregate by regions. The data show that the employment contribution of the boating tourism sector is distributed more widely across the regions of the UK. The largest proportions of FTE jobs generated by the boating tourism sector are still greatest in the South East, South West and Scottish regions but there is also significant employment associated with the boating tourism sector in London, the East of England, the West Midlands and the North West. The BMF data suggest that the South East accounts for a greater share of the total turnover and GVA of the sector, compared to its share of employment in the sector. This implies that employees in the South East generate a larger turnover and GVA per head than employees in the other regions.

The economic contribution of boating-related tourism in the UK

Wider tourism expenditures

4.1

Introduction This section presents estimates of the economic impacts of tourism expenditures associated with participation in boating and watersports activities. These estimates are not comparable with the previous estimates of tourism expenditures and impacts presented in the 2005 44 report, the Economic Benefits of the UK Leisure Boating Industry , because these estimates cover a broader range of boating activities. The tourism activities associated with boating and watersports, and covered in this report, include: the use of privately owned boats as well the use of the hire and charter services; participation in boat races and training activities; passengers on boat trips; and other activities associated with marinas, moorings, slipways and boat clubs. The economic contribution of core boating tourism sectors (including activities such as boating holidays, boat hire, marina and mooring charges, sailing lessons, and passenger boats) has already been assessed above. The associated ‘boating tourism’ expenditures were included as income to each sub-sector as part of the above industry assessment. This section therefore focuses solely on ‘non-boating’ expenditures, which generate further benefits for local, regional and national economies. These visitor expenditures include purchases of a range of ‘non-boating’ goods and services such as food and drink, transport and travel, accommodation and (non-boating) retail goods. These expenditures are attributable to leisure boating since they have arisen as a direct result of participation in boating and watersports activities. The analysis of tourism expenditures has drawn together information and data from a range of sources. Much of the analysis draws on and combines: ■

Participation data for different boating and watersports activities from the Watersports 45 Participation Survey ; and

■

Expenditure data for day and overnight visits associated with the same boating and watersports activities, from the watersports expenditure survey that was undertaken specifically to inform this analysis.

This information is supplemented with information from national tourism surveys, tourism bodies and other research studies of boating related tourism. The following sections set out this analysis in more detail.

4.2

Definitions The following analysis of wider tourism and leisure expenditures is consistent with standard definitions of tourism. For example, the Organisation for Economic Co-operation and Development (OECD) and World Tourism Organization (WTO) define tourism as “the activities of persons travelling to and staying in places outside their usual environment for not

44 45

ICF GHK (for BMF) (2005) Economic Benefits of the UK Leisure Boating Industry BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012

The economic contribution of boating-related tourism in the UK

more than one consecutive year for leisure, business and other purposes not related to the 46 exercise of an activity remunerated from within the place visited” . Visit England, Visit Scotland and Visit Wales build on this definition when defining day and 47 48 overnight visits for the GB Day Visits Survey and GB Tourism Survey respectively. The GB Day Visits Survey defines ‘tourism day visits’ as: ■

Visits involving participation in one of 15 leisure activities;

■

Visits lasting at least three hours, including time spent travelling to the destination;

■

Visits that are not undertaken ‘very regularly’; and

■

Visits to a destination that is outside the individual’s place of residence (unless the visit is associated with special public events, live sporting events or visitor attractions).

Participation in boating and watersports activities will, in most cases, fulfil these criteria. For example, boating and watersports participation can be associated with many of the 15 leisure activities which include outdoor activities, watching and participating in sports, leisure and hobbies, as well as going out for a meal, specialist shopping and a general day out. Furthermore, the Watersports Participation Survey suggests that all watersports activities are undertaken between 2.9 and 7.5 times per annum and last between 2.2 and 7.6 hours per trip (excluding travel time). This suggests that the large majority of boating activities are not undertaken ‘very regularly’ and last longer than 3 hours including travel time, particularly as activities are taking place in a place that is different from where the participant lives. The application of these defining criteria is discussed in greater detail below.

4.3

Boat Ownership An understanding of levels of boat ownership in the UK is a useful indicator of levels of interest and participation in leisure boating activities across the UK.

4.3.1

UK boat park The UK ‘boat park’ is an estimate of the total number of boats in the UK. The latest BMF estimates are presented in Table 4.1 below and suggest that there are more than 600,000 boats in the UK, including all privately and commercially owned boats and personal watercraft, such as jet skis. However, these figures exclude boats of less than 2.5 metres. Table 4.1

UK boat park estimates Sailboats

Inboard/ sterndrive motor boats

Other rigid boats incl outboard motor boats

Inflatable boats (2.5m+ and 20kg+)

Total

2.5-7.5m

200,000

33,500

155,000

80,000

468,500

7.5-12m

40,000

54,500

6,500

3,000

104,000

12-24m

7,500

14,000

21,500

24m +

150

120

270

Total

247,650

102,120

161,500

83,000

594,270

Personal Watercraft (PWC)

10,000-15,000

Source: BMF, 2013

Eurostat, OECD, WTO, UNSD (2001) Tourism Satellite Account: Recommended Methodological Framework, paras 1.1and 2.1 47 Visit Scotland, Visit Wales, Visit England (2013) The GB Day Visitor – Statistics 2012 48

Visit Scotland, Visit Wales, Visit England (2013) The GB Tourist – Statistics 2012

The economic contribution of boating-related tourism in the UK

The boat park data is also presented in Figure 4.1 to highlight differences between the types and lengths of boat. It shows that the large majority of boats (79%) are between 2.5 and 7.5 metres in length. Sailboats are the most numerous type of boat, based on these groups, accounting for almost 250,000 boats. However, motor boats account for almost 350,000 boats, when the individual categories are combined. The inboard or stern-drive motor boats tend to be the longest boats, accounting for more than 50% of all boats over 7.5 metres in length. Figure 4.1

UK boat park estimates by type and length of boat

Source: BMF, 2013 49

An alternative estimate is provided by the Watersports Participation Survey , which asks interviewees about household boat ownership. The data suggest that there are currently around 750,000 boat owning households in the UK (based on a rolling average from 2010 to 2012). These households are estimated to own a total of 1.2 million boats, 1.1 million of which are kept in the UK. The findings of the survey also suggest that boat ownership has increased slightly over time. Table 4.2 shows the ownership of different types of boat and appears to verify the BMF boat park estimates as the number of boats kept in the UK falls to approximately 600,000 if canoes/kayaks, rowing boats and windsurfers are excluded. It also suggests that there are around 260,000 sailing boats and 300,000 motor boats kept in the UK, compared to the UK boat park estimates of 250,000 and 350,000 respectively. Table 4.2

Estimates of boat ownership in the UK by type of boat (2010-2012) Households owning a boat

Number of boats owned

Number of boats kept in the UK

Number (000’s)

(000’s)

Small sailing boat

0.65

172

208

197

Sailing yacht

0.24

Power boat

0.18

Motor boat (day or other)

0.34

Day motor boat

0.18

BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012

The economic contribution of boating-related tourism in the UK

Households owning a boat

Number of boats owned

Number of boats kept in the UK

Number (000’s)

(000’s)

Other Motor boat

0.16

Canal boat

0.15

Canoe\Kayak

1.05

276

425

397

Rowing boat

0.16

RIBs/Inflatables or sportsboats

0.17

Windsurfer

0.20

Personal watercraft

0.15`

Any boat

2.82

744

1,233

1,127

Source: BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012 Note: Based on 37,953 responses over three years. The relatively low bases for some types of boat mean the data should be treated as indicative only.

4.3.2

Hire boats Boats can also be hired or chartered to enable participation in boating or watersports activities. Comprehensive data is not available to demonstrate the overall scale of the hire and charter of boats and watersports equipment across all coastal and inland waters in the UK. However, the Association of Pleasure Craft Operators (APCO) reports that there were 1,022 hire boats on inland waters in 2012 (excluding the Thames, the Broads and 50 Scotland) , while the Broads hire fleet was reported to include 954 vessels in 2012 by the 51 Broads Hire Boat Federation (BHBF) . These figures suggest that the number of boats available for hire in the UK is much smaller than the number of privately owned boats. However, usage of hire boats is much more intensive and hire boats therefore account for a much higher proportion of overall participation (as described below) and generate a significantly higher tourism impact per vessel.

4.4

Participation in leisure boating activities 52

The latest data from the Watersports Participation Survey suggests that approximately 6% of the UK adult population (more than 2.8 million people) participated in boating activities in 2012. This figure had fallen slightly from 2011, when participation was closer to 3 million people, but we expect it will increase again in 2013 due to the improved weather over the summer and a general uplift in sporting activity following the 2012 Olympics. However, the assessment of tourism impacts will be based on the 2012 data, as these are the most up to date figures available.

Association of Pleasure Craft Operators (2012) 2012 Hire Boat Survey Broads Hire Boat Federation (2012) Broads Hire Fleet 52 BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012 51

The economic contribution of boating-related tourism in the UK

4.4.1

Participation by activity The 2012 participation data is disaggregated in Table 4.3 between the individual boating and watersports activities. The data suggest that canoeing is the most popular activity and was undertaken by more than 1.2 million people in 2012. The next most popular activities were motor boating/cruising with 414,000 participants in 2012, followed by small sail boat activities with 388,000 participants and yacht cruising with 329,000 participants. The smallest levels of participation were associated with yacht racing and windsurfing, although each of these activities still drew more than 100,000 participants in 2012. Table 4.3

Participation in boating activities Total number of participants

% of UK adult population

1,213,877

2.5%

Water skiing and wakeboarding

188,733

0.4%

Small sail boat activities

388,307

0.8%

Rowing/Sculling

199,658

0.4%

Windsurfing

127,929

0.3%

Using personal watercraft

136,312

0.3%

Motor boating/cruising

414,355

0.8%

Yacht cruising

328,896

0.7%

Power boating

289,827

0.6%

Small sail boat racing

165,852

0.3%

Canal boating

286,672

0.6%

Yacht racing

106,123

0.2%

2,836,847

5.8%

Canoeing

Any boating activity

Source: BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012

These participants include boat owners but also include large numbers of people hiring and chartering boats, using club boats, and using boats owned by friends and family. The Watersports Participation Survey reports that hired and chartered boats account for a large proportion of the boats used by participants on their last trip. For instance, hire or charter boats were used to participate in their most recent trip by: 47% of canal boaters; 28% of motor boaters; 25% of power boaters; 23% people using personal watercraft; 19% of rowers; and 18% of canoeists. Furthermore, the survey found that boats owned by clubs, training centres or other corporate-owned boats were used on the last trip by: 28% of participants in small sail boat racing, 22% of canoeists, 19% of waterskiers / wakeboarders, 17% of rowers, 16% of small sail boat activities and 15% of participants in yacht cruising activities.

The economic contribution of boating-related tourism in the UK

4.4.2

Numbers of trips / experiences It is also possible to use the survey findings to assess the number of experiences undertaken in the UK for each activity by applying the percentage of participants who participate in the UK, and the frequency of their participation in the UK. The data in Table 4.4 suggest that, for most activities, more than 70% of participation takes place in the UK. Waterskiing/Wakeboarding and using personal watercraft are the only activities for which UK participation is less than 70% and this is likely to be due to a relatively large number of people undertaking these activities whilst on overseas holidays. The average frequency of participation varies between a minimum of 2.9 experiences per year for yacht cruising and a maximum of 7.5 experiences per year for small sail boat activities. The average across all activities was 5 experiences during 2012. These findings suggest the total number of boating related experiences was 17.6 million in 2012. Canoeing was by far the most common activity with 6.1 million experiences in 2012. There were fewer than 2 million experiences for all other activities in 2012. Table 4.4

Number of boating experiences % participating in the UK

Frequency of UK participation (experiences per annum)

Number of experiences in the UK

Canoeing

84.9%

5.1

6,125,686

Water skiing and wakeboarding

58.9%

3.9

562,645

Small sail boat activities

84.7%

7.5

1,878,100

Rowing/Sculling

80.0%

5.2

1,168,635

Windsurfing

72.0%

3.8

417,673

Using personal watercraft

50.9%

4.1

357,426

Motor boating/cruising

71.7%

3.7

1,626,164

Yacht cruising

78.2%

2.9

1,028,231

Power boating

70.5%

5.5

1,377,101

Small sail boat racing

96.4%

6.8

1,535,952

Canal boating

95.4%

4.0

1,019,241

Yacht racing

94.6%

7.0

502,380

Any boating activity

17,599,236

Source: BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012

The economic contribution of boating-related tourism in the UK

4.4.3

Duration of activities and trips The 2012 Watersports Participation Survey also collected data relating to the duration of the activity. It shows that the only activities with an average duration of less than three hours are: canoeing (2.6 hours); rowing/sculling (2.6 hours); using personal watercraft (2.2 hours); and power boating (2.9 hours). When the time taken to travel to and from the destination, set up and pack up the vessel and/or equipment, and possibly spend time socialising with other participants is also taken into account, it is considered highly unlikely that any boating activities would be undertaken in less than three hours, and these activities are therefore consistent with the definition of a day visit, as defined for the GB Day Visits Survey. While the Watersports Participation Survey collects data on duration of activity, it does not collect data relating to the length of the trip or whether the trip was a day visit or whether it involved an overnight stay. However, this information was collected as part of the survey of boating and watersports expenditures that was undertaken to inform this study. The ratio of day visits to overnight visits has been applied to the number of experiences associated with each activity in Table 4.5 to provide an estimate of the number of day visits and overnight trips. The data suggest that day visits are more prevalent for most of the activities and particularly for small sail boat activities and racing, canoeing and water skiing / wakeboarding, while overnight trips are most common for yacht cruising and particularly canal boating. Overall the findings suggest that 63% (11.1 million) of the 2012 experiences were associated with a day visit, while 37% (6.5 million) involved an overnight stay. The findings suggested very little difference between the type and duration of trips taken by boat owners compared to non-owners, although boat owners were slightly more likely to undertake day visits to participate in windsurfing and small sail boat activities, and overnight trips to participate in motor boating/ cruising. Table 4.5

Number of day visits and overnight trips Day visits of 3+ hours

Overnight trips

No. of experiences

Canoeing

77%

4,729,590

23%

1,396,096

Water skiing and wakeboarding

77%

432,403

23%

130,242

Small sail boat activities

80%

1,494,712

20%

383,388

Rowing/Sculling

55%

637,437

45%

531,198

Windsurfing

53%

223,075

47%

194,598

Using personal watercraft

42%

150,840

58%

206,586

Motor boating/cruising

39%

628,110

61%

998,054

Yacht cruising

27%

274,777

73%

753,454

Power boating

62%

849,668

38%

527,433

Small sail boat racing

82%

1,263,980

18%

271,972

Canal boating

15%

152,319

85%

866,922

Yacht racing

47%

237,617

53%

264,763

Any boating activity

11,074,528

6,524,706

Source: ICF GHK analysis, 2013

Respondents of the watersports expenditure survey were also asked about the duration of overnight trips and the number of people in each group. The responses showed considerable variation between activities with rowing/sculling and canoeing trips involving large groups of more than ten people. In contrast, motor boating and yacht cruising activities were more likely to be undertaken by small groups averaging around 3 people per trip. 49

The economic contribution of boating-related tourism in the UK

The duration of overnight trips also varied across the activities from an average of 3.5 nights for trips to undertake canoeing and small sail boat racing, to an average of almost 9 nights for canal boating trips. Table 4.6

Size of party and duration of overnight trips Average number of people per party

Average number of nights

Canoeing

10.4

3.5

Water skiing and wakeboarding

4.5

4.4

Small sail boat activities

5.6

4.3

Rowing/Sculling

12.7

7.0

Windsurfing

7.6

4.6

Using personal watercraft

3.7

6.9

Motor boating/cruising

3.1

5.2

Yacht cruising

3.2

5.4

Power boating

3.7

4.1

Small sail boat racing

4.2

3.5

Canal boating

3.9

8.9

Yacht racing

5.2

4.8

Source: ICF GHK analysis, 2013

4.5

Tourism expenditures The watersports expenditure survey also asked respondents about levels of tourism expenditure on their most recent day visit or overnight trip. This included expenditure on non-boating goods and services only, such as food and drink, travel, non-boating retail and accommodation for overnight trips. The data are summarised in Table 4.7, which suggests that expenditures on day visits range from less than £19 per person for those participating in small sail boat activities to £38 per person for people participating in power boat activities. The expenditures associated with small sail boat racing and activities were found to be significantly lower than the other types of boating activity for day visits. This was due to a relatively high proportion of participants spending less than £10 per day. Average overnight expenditures varied widely across activities, ranging from £38 for those participating in yacht cruising to £65-70 for smaller vessels (such as small sail boat racing, water skiing / wakeboarding, rowing, windsurfing and personal watercraft). This was mainly due to higher expenditures on accommodation as those using smaller craft are unable to stay on their boats.

The economic contribution of boating-related tourism in the UK

Table 4.7

Tourism expenditures No. of day visits (million)

Spend per person per day (£)

Total day visit spend (£m)

No. of ‘overnight trip’ nights (million)

Spend per person per night (£)

Total overnight trip spend (£m)

Canoeing

4.7

32.40

153

4.9

63.36

308

Water skiing and wakeboarding

0.4

39.88

0.6

69.79

Small sail boat activities

1.5

25.58

1.6

59.93

Rowing/Sculling

0.6

39.88

3.7

69.79

260

Windsurfing

0.2

39.88

0.9

69.79

Using personal watercraft

0.2

39.88

1.4

69.79

Motor boating/cruising

0.6

36.09

5.2

50.13

258

Yacht cruising

0.3

31.23

4.1

38.32

157

Power boating

0.8

38.07

2.2

58.61

127

Small sail boat racing

1.3

18.90

0.9

65.96

Canal boating

0.2

35.03

7.7

55.80

432

Yacht racing

0.2

33.47

1.3

51.42

Any boating activity

11.1

350

34.5

1,970

Source: ICF GHK analysis, 2013 Note: The expenditure per day/night figures for water skiing and wakeboarding, rowing/sculling, windsurfing and personal watercraft have been combined to increase the sample sizes. The expenditures data was cleaned for all activities to remove outliers (classed as day visit expenditures of more than £100 per person and overnight expenditures of more than £500 per person per night).

Applying the average spend data provides estimates of overall tourism expenditures of £350 million for day visits and almost £2 billion for overnight trips. The largest expenditures are associated with canoeing, as a result of high levels of participation, and canal boating, as a result of the longer duration of overnight trips.

4.5.1

Overall expenditures The watersports expenditure survey also asked respondents about their expenditures on boating goods and services such as marina and mooring fees, boat and equipment hire, fuel, and watersports training and tuition. These are excluded from the above analysis to avoid double-counting as many of these expenditures have already been considered as turnover to the boating tourism sub-sectors. However, it is useful to explore these expenditures in terms of understanding the overall levels of expenditure associated with participation. Day visit expenditures are presented in Figure 4.2, which shows that total expenditures range from an average of £31 per person per day for small sail boat racing to more than £60 per day for motor boating. It also shows that the wider tourism expenditures are typically around two to three times larger than the average day expenditures on boating goods and services. Motor boating also has the highest boating-related expenditure, the majority of which was expenditure on boat fuel. Waterskiing and personal watercraft activities also had relatively high average expenditures on boat fuel, despite being combined with rowing and windsurfing. Marina and mooring fees were highest for those participating in yacht and small sail boat racing activities, yacht cruising and motor boating, while hire and charter fees were highest for yacht cruising and particularly canal boating participants. Training and tuition fees were highest for small sail boat activities and the combined group of rowing, windsurfing, waterskiing and personal watercraft. 51

The economic contribution of boating-related tourism in the UK

Figure 4.2

Average day visit expenditures, including boating and wider tourism expenditures (£)

Similar data are presented in Figure 4.3 for overnight expenditures. The overall expenditures range from around £60 per person per night for yachting activities, to almost £90 for canal boating. The large majority of the boating expenditures for canal boating are boat hire fees, as the other types of expenditure are relatively low amongst canal boaters. Marina and mooring fees are highest for those participating in yachting, while this group spends the least on accommodation, suggesting that many people in this group are likely to stay on their boats when on overnight trips. Figure 4.3

Total overnight expenditures, including boating and wider tourism expenditures (£)

4.6

Additional boating activities There are also additional ‘boating activities’ that are not included in the Watersports Participation Survey and should be added to the analysis. These additional activities include: 52

The economic contribution of boating-related tourism in the UK

■

people visiting their boats without leaving the berth or mooring to ‘participate’ in the above boating activities;

■

people taking trips on passenger boats;

■

overseas visitors participating in boating-related activities in the UK; and

■

spectators and visitors attending the numerous boating related events that take place all around the UK every year from local regattas, boat races and tall ship events to National Boat Shows.

These additional activities and associated expenditures are considered in the following sections.

4.6.1

Owners visiting boats without ‘participating’ Many boat owners will visit their boat without ‘participating’ in boating activities. Common purposes for these visits include undertaking maintenance work on vessels and people simply using their boats as a base from which to visit and explore the local area. These visits give rise to tourism expenditures (assuming that the boat is kept in a different place from where the owner lives) but will not be included in the Watersports Participation Survey or the above analysis. These activities have been explored in the BMF reports on inland and coastal marinas and the watersport expenditures survey undertaken as part of this study also asked participants about the extent of these activities. The survey found that 47% of boat owners kept their boat outside of the place where they live (but still in the UK). Of these, 81% stated that they do visit their boat without leaving the berth or mooring. Applying these metrics to the estimated number of boats kept in the UK (1.1 million) suggests that around 430,000 boat owners visit their boat (kept in a different area) without actively participating in a boating activity. The watersports expenditure survey also found that the average boat owner, who undertakes this type of visit, will take 5.3 day visits and 4.5 overnight trips per annum (assumed to average 1.5 nights per trip) and will spend an average of £24 per person on each day visit and £51.50 per person per night on each overnight trip. Applying these estimates suggests that tourism expenditures associated with ‘non-participating’ boat owners total more than £200 million per annum, comprising £55 million spent on day visits and £149 million spent on overnight trips. Table 4.8

Tourism expenditures associated with ‘non-participating’ boat owners Non-participating boat owners

Owners visiting boats without leaving the berth / mooring Average no. of day visits Spend per person per day

429,000 5.3 per annum £24.09

Total day visit spend

£54.7 million

Average no. of overnight trips

4.5 per annum

Average no. of ‘overnight trip’ nights

6.5 per annum

Spend per person per night

£51.55

Total overnight visit spend

£149.2 million

Source: ICF GHK analysis, 2013

4.6.2

Passenger boat trips The Watersports Participation Survey and the above analysis do not include the tourism expenditures of people undertaking day visits with the primary purpose of taking a boat trip. It is also difficult to attribute the expenditures of passenger boat customers to tourism given 53

The economic contribution of boating-related tourism in the UK

the complexities in establishing whether passengers are commuters or tourists, and whether the passenger boat trip was the main purpose for the overall trip or whether it was simply used by the visitor as a means of travelling to their ultimate destination. 53

The PBA report suggests that around 28 million trips are taken on passenger boats each year. However, as described in section 3.3, around a quarter of the passenger boats provide ferry services on the UK mainland and it is difficult to attribute the expenditure of users of these services to boating-related tourism due to the incidence of commuters. Furthermore, these services are likely to provide more frequent services and carry a relatively large proportion of overall passenger numbers. For example, the Thames Clippers carry 8,500 people per day and approximately 3 million per year and this type of service is therefore likely to account for a significantly higher proportion of total passenger trips than providers of services that are exclusively for ‘leisure’ passengers. Given the uncertainty over the number of ‘leisure’ passengers that can be attributed to the passenger boat industry, this analysis has used data from the GB Day Visits Survey. This suggests that 4 million (3+ hour) leisure day visits involved travelling by boat, ship or ferry in 54 2012 with an associated tourism expenditure of £115 million .

4.6.3

Overseas visitors Overseas visitors are excluded from the Watersports Participation Survey, which focuses on UK residents, and there is a lack of evidence relating to the involvement of overseas visitors in boating activities. A recent report on the economic contribution of tourism to the UK economy suggests that spend from overseas visitors has been increasing and accounts for 55 approximately 19% of the total tourism spend in the UK of £107 billion in 2012 . Consultation with boat hire businesses also found that overseas customers have been increasing over time and account for around 10% of their customer base. The Watersports Participation Survey estimates that around 10% of boating experiences undertaken by UK residents take place overseas. This evidence suggests that it might be fair to assume that overseas visitors add 10% to the number of boating and watersports experiences in the UK. This will deliver a larger than 10% increase in tourism expenditures due to the higher average spend of overseas visitors. These assumptions suggest that overseas visitors spend 4.6 million nights participating in boating and watersports activities in the UK and spend £355 million (based on overseas 56 visitor spend of £77.80 per night ). The total tourism expenditures of overseas visitors are projected to grow at more than 6% 57 per annum to 2025 , so it is likely that expenditures associated with boating and watersports activities will also experience strong growth from overseas visitors.

4.6.4

Spectator and visitor events A large number and wide range of boating-related events take place across the UK and throughout the year. Examples include: ■

sailing and rowing regattas and races, from large events such as the Henley Regatta and Cowes Week to smaller events that take place in local communities across the UK;

■

boating festivals, such as the Crick Boat Show and the Inland Waterways Association (IWA) National Festival;

The Passenger Boat Association (2009) The UK Passenger Boat Industry - What Value to the Economy? Visit Scotland, Visit Wales, Visit England (2013) The GB Day Visitor – Statistics 2012 55 Deloitte and Oxford Economics (2013) Tourism: jobs and growth - The economic contribution of the tourism economy in the UK 56 ONS (2011) International Passenger Survey, which estimates overseas visitor spend to be £76.52 per night (£77.80 in 2012 prices) 57 Deloitte and Oxford Economics (2013) Tourism: jobs and growth - The economic contribution of the tourism economy in the UK 54

The economic contribution of boating-related tourism in the UK

■

spectator events like the Powerboat Grand Prix, the tall ships events and the Clipper Round the World Race; and

■

the National Boat Shows at London and Southampton.

These boating-related events also have a significant impact on the UK economy by attracting large numbers of visitors and visitor expenditures. For example, Crick Boat Show attracted 58 more than 24,000 visitors in 2012 while the 2012 Dublin Tall Ships Festival was estimated 59 to have attracted 1.1 million visitors over the four day event . While it is very difficult to estimate the economic impacts associated with spectators and visitors attending all boating events in the UK, it is possible to use examples to demonstrate the scale of some of these impacts. For example, Cowes Week is estimated to attract £6.4 million of tourism 60 expenditures for local businesses . Other boxed examples have been included below to demonstrate the scale and breadth of these impacts on the UK tourism industry.

Clipper Round the World Race The Clipper Round the World Race is the world’s longest ocean race and gives paying amateur crew members the chance to sail around the world. The race to circumnavigate the world is between 12 identical racing yachts over 16 races. Each yacht is provided with a fully-qualified skipper, employed to lead the amateur crews, who can sign up for the whole race or for one or more individual legs. The race takes place every two years and the current race set off from St Katharine Docks in London st on 1 September 2013 and is expected to return in July 2014. The race generates a significant economic impact for all of the ports it visits as crew, officials, sponsors, guests and spectators visit and stay in the local economies to view or participate in the event. The impact for London is likely to be particularly significant as it is hosting the start and finish of the 2013-14 race series. In 2012, Derry-Londonderry hosted the finish for race 13 and the start of race 14. It held a Clipper Homecoming Festival, which attracted more than 120,000 spectators over a 10 day period. The Mayor of Derry-Londonderry is reported as saying “The Clipper Race Festival successfully reinvented our riverfront, brought investment to our maritime offering and changed the way we use and look at the River Foyle. It successfully showcased the city and achieved a PR value of £104 million in media coverage as well as generating almost 8,000 bed nights and achieving 98 per cent 61 positive comments in relation to civic pride.” The city has also announced that it will be a host port in the current 2013-14 race and the 2015-16 race.

http://www.waterwaysworld.com/latestpost.cgi?post=3291 (accessed 20 December 2013) http://insideireland.ie/2012/08/27/dublin-tall-ships-festival-ends-with-1-1m-visitor-attendance-78940/ (accessed 20 December 2013) 60 Tourism South East (2009) The Significance of Sailing to South Hampshire and the Isle of Wight’s Visitor Economy 61 http://www.clipperroundtheworld.com/newsitem/uk-city-of-culture-2013-returns-in-four-year-global-legacycampaign 59

The economic contribution of boating-related tourism in the UK

PSP Southampton Boat Show The PSP Southampton and London Boat Shows attract large numbers of visitors. The 2013 London Boat Show attracted more than 93,000 visitors over 9 days in January 2013, which (despite heavy snowfall) was only slightly lower than the previous year’s total attendance of 103,000 over the full ten days. The 2013 PSP Southampton Boat Show took place in September 2013 and attracted a total of 111,963 visitors. This was 2% higher than the attendance in 2012. 62

The economic impact of the 2006 PSP Southampton Boat Show was assessed in 2007, and an additional visitor survey was undertaken by Southampton City Council in 2010. The findings of which can be used to produce an estimate of economic impacts for the 2013 PSP Southampton Boat Show. The 2010 study does not disaggregate visitor spend between purchases made in and out of the show, so the original spend figures from the 2006 study need to be used and have been inflated to current prices. These updated figures suggest that the average visitor group comprised 2.72 people and (on average) spent: ■

£121.19 on-site at the show (excluding purchases of boats and boat equipment but including food and drink, clothing, entrance fees and other non-boating equipment);

■

£110.82 off-site in Southampton; and

■

£33.91 outside Southampton but inside the South East.

In 2006, 12% of businesses at the show were local businesses and 29% were based elsewhere in the South East. The same figures have been applied to the 2013 visitors, which suggests total expenditures of: ■

£5.16 million with local businesses in Southampton (comprising £0.6 million spent with local businesses at the show and £4.6 million spent in the local economy); and

■

£2.84 million with businesses in the South East (comprising £1.4 million spent with South East businesses at the show and £1.4 million spent off-site in the South East).

The 2010 survey found that 36% of visitors were Southampton residents. This is significantly higher than in 2006, when only 11% of visitors were from Southampton. The higher figure of 36% has been applied to the 2013 visitors as a conservative and more recent estimate. The expenditures associated with these people have been excluded from the analysis as they would not generate any additional impacts. The 2010 survey also found that the show was the sole or main reason for visiting the city centre for all except 10% of people, and the expenditures of these 10% have also been excluded. This suggests net additional expenditures of: ■

£3 million for the local economy; and

■

£1.6 million for the wider South East economy.

A review of recent local and regional multipliers suggests local tourism expenditures of £63,000 are required to support 1 FTE job, while each £1 of expenditure enhances local GVA by £0.50. At the regional level, £40,000 is required to directly support 1 FTE job, while each £1 of expenditure enhances regional GVA by £0.80. This suggests overall economic impacts of: ■

£1.5 million of GVA and 48 FTE jobs in Southampton; and

■

£1.3 million of GVA and 40 FTE jobs in the wider South East.

This suggests that the visitor expenditures associated with 2013 PSP Southampton Boat Show are significant and are estimated to support a total of £2.8 million of GVA and 88 FTE jobs in the total South East economy. Furthermore, the overall impact of the Show will be considerably larger than this if the impacts from business expenditures and impacts associated with planning and delivering the show are also included. There is insufficient data available to revise these impacts, although the 2006 report concluded that the 2006 PSP Southampton Boat Show supported a total of 284 FTE jobs in the South East economy.

Experian (for Southampton City Council) (2007) Economic Impact of the Southampton International Boat Show

The economic contribution of boating-related tourism in the UK

4.7

Summary of total visitor expenditures The above visitor expenditures are summarised in Table 4.9 below. The combined estimates suggest that boating activities generated tourism expenditures of approximately £3 billion in 2012, comprising £520 million associated with day visits and £2.5 billion associated with overnight trips. The large majority of these expenditures are associated with participation in boating and watersports activities. Table 4.9

Overall tourism expenditures (£m) Day visit spend (£m)

Overnight trip spend (£m)

Total tourism expenditures (£m)

Canoeing

153

308

461

Water skiing and wakeboarding

Small sail boat activities

136

Rowing/Sculling

260

285

Windsurfing

Using personal watercraft

105

Motor boating/cruising

258

281

Yacht cruising

157

166

Power boating

127

159

Small sail boat racing

Canal boating

432

437

Yacht racing

350

1,970

2,320

355

149

204

Any boating activity Overseas visitors participating in boating activities ‘Non-participating’ boat owners

Passenger boat trips

115

Boating events Total boating-related tourism

115

520

2,474

2,994

Source: ICF GHK analysis, 2013

The economic contribution of boating-related tourism in the UK

4.8

Economic contribution of tourism spending This section estimates the employment and GVA associated with these boating-related tourism expenditures. These estimates are in addition to the economic contribution of the boating tourism businesses presented in the previous section.

4.8.1

Direct effects A recent study of the economic contribution of tourism to the UK economy has been 63 undertaken for Visit Britain . The report suggests that the ‘direct’ tourism industry in the UK delivered £58 billion of GVA in 2013, which equated to approximately 50% of total tourism expenditures of £113 billion. Applying this ratio to the above tourism expenditures from boating participants provides an estimate that these expenditures directly support £1.5 billion of GVA in the UK. The Visit Britain report also suggests that 1.75 million FTE jobs are directly supported in the UK tourism industry, at an average of 30,000 jobs per £1 billion of GVA. Applying this ratio suggests that the expenditures of watersports participants directly support 45,000 FTE jobs in the UK economy.

4.8.2

Indirect and induced effects The direct expenditures and impacts will also flow through from the tourism industry to suppliers and employees. The links from direct to indirect and induced effects can be estimated by applying appropriate multipliers. The Visit Britain report uses the latest multipliers from Oxford Economics’ model of the tourism economy. The indirect (Type I) multipliers for the UK are estimated to be 2.2 for GVA and 1.8 for employment. This suggests that every £1 generated in direct GVA will support an additional £1.20 of GVA, and every direct FTE job will support an additional 0.8 FTE jobs, elsewhere in the UK economy through purchases of goods and services from suppliers. The indirect and induced (Type II) multipliers for the UK are estimated to be 2.8 for GVA and 2.2 for employment. This suggests that every £1 generated in direct GVA will support an additional £1.80 of GVA, and every direct FTE job will support an additional 1.2 FTE jobs, elsewhere in the UK economy through purchases of goods and services from suppliers and the expenditures of employees. As stated in the industry assessments above, induced effects have been calculated to enable comparisons with other similar studies but have not been included in the headline estimates of economic contribution. Applying the above metrics suggests that the £3 billion of expenditures of watersports participants directly supported £1.5 billion of GVA and 45,000 FTE jobs and a total of £3.3 billion and 81,000 jobs within the tourism sector and supply chain businesses. Table 4.10

Direct and indirect impacts of expenditures of watersports participants GVA (£m)

Employment (FTE jobs)

Direct impacts

1,497

44,900

Total direct and indirect impacts

3,293

80,800

Source: ICF GHK analysis using metrics from Deloitte and Oxford Economics (2013) Tourism: jobs and growth The economic contribution of the tourism economy in the UK

If induced effects were also included, the expenditures of watersports participants would generate larger impacts and support 99,000 FTE jobs and £4.2 billion of GVA per annum. The above expenditures and impacts for the tourism economy (i.e. direct and indirect effects) have been disaggregated by activity in Table 4.11 using participation data from the Watersports Participation Survey. It suggests that expenditures associated with canoeing and canal boating activities generate the greatest impacts for the UK economy. Motor boat 63

Deloitte and Oxford Economics (2013) Tourism: jobs and growth - The economic contribution of the tourism economy in the UK

The economic contribution of boating-related tourism in the UK

activities and sailing activities both generate similar GVA and employment contributions when the individual activities are combined. Table 4.11

Tourism expenditures and associated GVA and employment impacts (£m) Total tourism expenditures (£m)

GVA contribution to the tourism economy (£m)

Employment contribution to the tourism economy (FTE jobs)

Canoeing

461

507

12,456

Water skiing and wakeboarding

1,552

Small sail boat activities

136

150

3,689

Rowing/Sculling

285

313

7,693

Windsurfing

1,917

Using personal watercraft

105

115

2,832

Motor boating/cruising

281

309

7,590

Yacht cruising

166

182

4,473

Power boating

159

175

4,301

Small sail boat racing

2,331

Canal boating

437

481

11,815

Yacht racing

1,982

2,320

2,552

62,631

Overseas visitors participating in boating activities

355

391

‘Non-participating’ boat owners

204

224

Passenger boat trips

115

127

3,105

2,994

3,293

80,827

Any boating activity

Boating events Total boating-related tourism

9,585

5,505

Source: ICF GHK analysis, 2013

4.8.3

Regional estimates for tourism spending and supported employment The tourism expenditures and associated GVA and employment impacts can be disaggregated between regions according to levels of boating participation in each region 59

The economic contribution of boating-related tourism in the UK

from the Watersports Participation Survey. As stated above, these estimates are not comparable with the previous estimates of boating tourism in the 2005 report, the Economic 64 Benefits of the UK Leisure Boating Industry , because these estimates cover a wider range 65 of boating activities and use a different approach to calculate regional estimates . Figure 4.4 shows the geographical distribution of all boating activities, according to the Watersports Participation Survey, although the subsequent analysis applies the regional participation of individual activities to their respective expenditures and economic impacts, and then aggregates these activities to estimate the overall regional distribution of all boating activities. Figure 4.4

Sub-national distribution of boating activities

Source:BMF/MCA/RNLI/RYA/BCU/MMO (2012) Watersports Participation Survey 2012

The South East and South West regions account for the largest expenditures, with approximately 35% of overall expenditures between them. However, there are also significant expenditures in the North West, Scotland and Wales, each of which accounts for between 9 and 11% of the UK total and experiences high levels of participation in most of the watersports activities. Most of the tourism expenditures in the East of England and Yorkshire and the Humber result from participation in canoeing, rowing and motor boating activities, while Northern Ireland has relatively high levels of expenditure from motor boating/cruising and personal watercraft. The East Midlands and West Midlands also generate significant tourism expenditures and associated impacts due to relatively high levels of participation in canal boating activities.

ICF GHK (for BMF) (2005) Economic Benefits of the UK Leisure Boating Industry This study disaggregates the national estimates according to regional estimates of watersports participation, rather than total tourism expenditures. 65

The economic contribution of boating-related tourism in the UK

The North East accounts for the smallest tourism expenditures from watersports activities, most of which are associated with motor boating/cruising and small sail boat activities. Table 4.12

Overall tourism expenditures (£m) Total tourism expenditures (£m)

GVA contribution to the tourism economy (£m)

Employment contribution to the tourism economy (FTE jobs)

% of UK total

North East

938

1.2%

North West

313

344

8,455

10.5%

Yorkshire & the Humber

179

197

4,845

6.0%

East Midlands

158

174

4,277

5.3%

West Midlands

158

174

4,270

5.3%

East

214

235

5,773

7.1%

London

126

139

3,407

4.2%

South East

530

583

14,303

17.7%

South West

503

554

13,593

16.8%

Wales

282

310

7,618

9.4%

Scotland

294

323

7,934

9.8%

N Ireland / Other UK

201

221

5,414

6.7%

2,994

3,293

80,827

100%

Total UK Source: ICF GHK analysis, 2013

4.8.4

Tourism impacts by season It is also possible to use data from the Watersports Participation Survey to estimate levels of expenditure and impacts between seasons for each activity, although this is based on an assumption that levels of expenditure are similar across seasons. The data suggest that the peak summer months account for 62% of all expenditures and associated impacts, while the percentage of the annual contribution falls to just 7% in the winter months. Table 4.13

Seasonal distribution of tourism expenditures and impacts Spring

Summer

Autumn

Winter

Total

Total boating tourism expenditures (£m)

548

1,863

374

209

2,994

Total GVA support by boatingrelated tourism (£m)

603

2,050

411

229

3,293

Total employment support by boating-related tourism (FTE jobs)

14,791

50,308

10,097

5,630

80,827

% of total expenditure

18.3%

62.2%

12.5%

7.0%

100%

Sources: ICF GHK analysis 2013

4.8.5

Inland and coastal tourism impacts Data from the Watersports Participation Survey can also be used to disaggregate tourism expenditures and impacts between coastal and inland areas. The data in Table 4.14 shows that the tourism expenditures and impacts associated with watersports activities are quite evenly distributed between inland (57%) and coastal (43%) areas. However, there are marked differences for individual activities with canal boating, rowing/ sculling, canoeing / kayaking and small sail boat racing activities focused on inland areas and motor boating / cruising and yacht cruising and racing very much focused on coastal areas. 61

The economic contribution of boating-related tourism in the UK

Table 4.14

Inland and coastal distribution of tourism expenditures and impacts Inland

Coastal

Total

Total boating tourism expenditures (£m)

1,706

1,287

2,994

Total GVA support by boating tourism (£m)

1,877

1,416

3,293

Total employment support by boating tourism (FTE jobs)

46,076

34,751

80,827

57%

43%

100%

% of total expenditure Sources: ICF GHK analysis 2013

4.9

Wider economic impacts Boating activities and infrastructure also generate other economic and tourism impacts. Boating activities enhance the tourism offer in many locations, even for visitors who do not participate in boating activities. Many ‘non-boating’ visitors visit inland waterways and coastal locations to watch other people participating in boating activities, which generates additional tourism expenditures and impacts for local economies. There is also a premium associated with the value of waterfront properties, which is likely to be enhanced by boating activities. These impacts are difficult to measure and attribute to boating tourism, but are likely to be significant. There are also many examples of boating infrastructure that can be considered visitor attractions in their own right and attract significant numbers of visitors to spend money in their respective local economies. For example: ■

The Falkirk Wheel is a major tourist attraction in Scotland, attracting more than 400,000 visitors per annum, and more than 4.5 million people in total. The £17.5m project was completed in 2002 and aimed to restore the links between the Forth & Clyde and Union Canals to connect these navigations and provide a corridor of regenerative activity through central Scotland. The Falkirk Wheel is the only rotating boat lift in the world and the spectacular structure bridges the 35 metre height gap between the two canals. The on-site tourism offer has expanded over time and now includes boat trips, a play park, 66 67 educational visits, corporate hospitality and private parties ;

■

Falkirk is also home to the largest equine structures in the world. The new cultural landmark forms the centrepiece to the £43 million Helix project to transform 350 hectares of land between Falkirk and Grangemouth. The Helix project includes an extension to the Forth & Clyde canal and construction of a new sea lock to improve its link with the 68 River Carron and make it easier for boats to enter and leave the canal . The Helix

http://www.thefalkirkwheel.co.uk/ (accessed on 11 December 2013) Association of Inland Navigation Authorities (AINA) AINA Case Study: Falkirk Wheel: canal engineering in the 21st century 68 http://www.thehelix.co.uk/ (accessed on 11 December 2013) 67

The economic contribution of boating-related tourism in the UK

development is due to open in 2014 and is expected to attract an additional 350,000 69 visitors per annum and add £1.5 million to local tourism expenditures ; ■

The Anderton Boat Lift offers river and lift trips to visitors and also has its own visitor centre, coffee shop and gift shop . It attracts more than 100,000 visitors per annum, according to the Association of Leading Visitor Attractions (ALVA), to spend money in the local Cheshire economy.

Boating activities and investments can also deliver regenerative benefits for local economies. There are many examples where the development of waterways, marina berths and moorings have been used to support and deliver regeneration for local economies by helping to improve the local tourism offer and attract high value and year round visitors. One major example is the Liverpool Waterfront, which has been transformed over the last ten years, A key aspect of the scheme has been the development of the Liverpool Canal Link, a new canal linking the waterfront to the inland waterways network. The Canal and River Trust has worked with Liverpool City Council and Liverpool Vision to deliver the canal link, which enables inland craft to access the Liverpool waterfront. The canal link is reported to have: ■

Attracted an additional 200,000 visitors to the Liverpool waterfront each year with associated expenditures of £1.9 million;

■

Attracted an additional £2.2 million in annual expenditure on boating related activities;

■

Supported 173 net additional local jobs and an estimated £3.3million of additional GVA in the local economy;

■

Driven increase in property prices in the immediate canal link area and wider corridor.

■

Delivered wider socio-economic impacts such as an improved city image, added interest to the Mersey River Festival, increased access to heritage and interpretation, and 70 increased recreation and amenity resources for the area .

Another example is Weymouth and Portland (included in the box below), which has benefited from considerable investment in boating, transport and other infrastructure, as a result of hosting the sailing events at the 2012 London Olympics,

Weymouth and Portland Weymouth and Portland is a popular seaside holiday resort and was the host venue of the London 2012 Olympic and Paralympic sailing events. Weymouth Bay and Portland Harbour offer some of the best and safest sailing waters around, with clean winds, minimal tides and shipping traffic. The key objectives of hosting the Olympic and Paralympic Games in Weymouth and Portland were to ensure that they were used as a catalyst for generating genuine legacy benefits for the area, by promoting the area and its strengths, and changing the perceptions of the local area to be more dynamic with a better quality and more activity-based tourism offer. Weymouth and Portland received significant investment to deliver the Olympic and Paralympic Games and accommodate the large numbers of participants, teams, support staff and visitors. The most major investments included: ■

approximately £80 million investment in Osprey Quay as a whole (location of the Olympic venue);

■

a £4 million multi-purpose facility for the RYA (Royal Yachting Association) at Osprey Quay;

■

a new £25 million marina and marine workshops;

■

£116 million investment in the relief road & transport links; and

■

£4 million investment in new bus services, bus stops and real time bus and car park information.

http://www.falkirk.gov.uk/about_council/news/article.aspx?pid=2939 (accessed on 11 December 2013) http://canalrivertrust.org.uk/about-us/enterprise/place-making-and-shaping/liverpool-waterfront (accessed 11 December 2013) 70

The economic contribution of boating-related tourism in the UK

These major investments have been the catalyst for other investments from the public and private sector to help Weymouth and Portland to use the legacy of the Olympics to deliver its aims of: changing perceptions of the local area; promoting activity-based tourism; increasing the quality of the local tourism product; attracting higher value visitors; and adding greater value to the local economy. These legacy projects have included: ■

Visit Britain promoting Weymouth and Portland abroad for watersports and outdoor activities;

■

enhanced facilities and infrastructure at Weymouth Harbour including pontoons, marine equipment, showers, harbour reception, etc;

■

a new, accredited sailing school and windsurfing training centre;

■

a ‘Sail for a Fiver’ scheme to encourage young people to participate in sailing activities;

■

£150,000 Addizone activity centre at Redlands Sports Centre;

■

£10,000 invested in enhanced cycle parking provision close to town centre and beach areas;

■

an Olympic walking and cycling strategy to introduce four routes totalling 7km;

■

opening 20km of Coast Path around Weymouth Bay;

■

a national pilot for the England Coast Path to test the QR bar code project around Weymouth Bay using SMART phone technology to provide marine environment information;

■

more than 230 hectares of green infrastructure created at Lorton Meadows Nature Park and Portland Quarries Nature Park to increase access to the natural environment;

■

£3.5 million investment in seafront regeneration including £1 million from the Arts Council and English Heritage, plus Townscape Heritage Funding and private sector investment; and

■

£3 million private sector investment in the Riviera Hotel.

Weymouth and Portland 2012 Operations (2012) Weymouth, Portland & Dorset: London 2012 Olympic and Paralympic Games Sailing Events - Pre Games and Existing Legacy Summary

The economic contribution of boating-related tourism in the UK

Conclusions The aim of this study was to provide an up to date estimate of the contribution of boating related tourism to the UK economy. This was achieved by separating the core boating tourism sector that provides services to UK boaters, from the wider leisure and tourism expenditures associated with boating and watersports activities and events. The figures include all participation in boating and watersports activities, regardless of whether the boats and equipment are privately owned, borrowed, hired, or accessed via clubs, training centres or others.

5.1

Scale of boating-related tourism in the UK The overall expenditures associated with the boating tourism industry and participation in watersports are estimated to total £3.6 billion in 2012/13. This accounts for 3.2% of all 72 tourism expenditure in the UK . These expenditures are distributed across the country but with particularly high expenditures in the South East, South West, Scotland and the North West. Table 5.1

Regional distribution of boating tourism sales / expenditures (£m)

Region

Turnover of boating tourism industry (Boating-related expenditures £m)

Wider tourism expenditures (£m)

Total boating tourism expenditures (£m)

Total regional distribution (%)

North East

1.2%

North West

313

345

9.6%

Yorkshire & the Humber

179

190

5.3%

East Midlands

158

179

5.0%

West Midlands

158

191

5.3%

East

214

266

7.4%

London

126

181

5.0%

South East

209

530

739

20.5%

South West

503

602

16.7%

Wales

282

303

8.4%

Scotland

294

349

9.7%

N Ireland / Other

201

215

6.0%

Total UK

609

2,994

3,603

100%

Source: ICF GHK estimate, 2013

The large majority of these expenditures (83%) are associated with the wider tourism expenditures of participants in boating and watersports activities, while the turnover of the boating tourism industry (based on boating related expenditures) accounts for the other 17%. It is also important to remember that these expenditures would be significantly larger if they were also to include all expenditures associated with spectators and visitors to boating destinations and events.

Deloitte and Oxford Economics (2013) Tourism: jobs and growth - The economic contribution of the tourism economy in the UK

The economic contribution of boating-related tourism in the UK

5.2

Economic Contribution of boating related tourism Boating tourism is estimated to support approximately 96,000 FTE jobs in the UK economy, through direct and indirect effects. This suggests that every £38,000 of boating tourism expenditure supports one FTE job in the UK economy, when all direct and indirect effects have been taken into account. These 96,000 FTE jobs comprise: ■

9,100 FTE jobs (10% of the total), which are estimated to be directly employed within the boating tourism sectors of marinas and moorings, boat hire, charter, rental, sailing schools / training and ‘leisure’ passenger boats. This represents around 27% of the wider marine industry (plus employment from the ‘leisure’ passenger boat industry);

■

5,800 FTE jobs (6% of the total), which are estimated to be indirectly supported amongst the boating tourism supply chain; and

■

80,800 FTE jobs (84% of the total), which are estimated to be directly and indirectly supported in the wider UK economy through the expenditures associated with day visits and overnight trips that can be attributed to participation in boating activities and trips.

The overall contribution is therefore many times larger than the core boating tourism sector. In fact, for every job directly employed in the boating tourism sector, there are an additional 10 jobs supported in the wider economy through the direct and indirect effects of expenditures of boaters and boating tourism businesses. Table 5.2

Direct and indirect employment impacts (FTE jobs) Boating tourism industry

Wider tourism expenditures

Total boating tourism

% of total

Direct employment (FTE jobs)

9.088

44,904

53,992

56%

Indirect employment (FTE jobs)

5,842

35,923

41,765

44%

Total direct and indirect employment (FTE jobs)

14,930

80,827

95,757

100%

Source: ICF GHK estimate, 2013

Induced effects have been excluded from the above table, as described earlier. However, if induced effects were included to take account of the expenditures of employees directly and indirectly supported by these activities, they would add a further 21,100 FTE jobs. The total employment contribution of boating tourism would therefore increase to support 117,000 FTE jobs across the UK economy. The distribution of employment impacts by region is presented in Table 5.3. These are again highest in the South East, South West, Scotland and the North West and these regions account for approximately 56% of the direct and indirect employment impacts. Table 5.3

Regional distribution of employment impacts (FTE jobs)

Region

Employment contribution from boating tourism industry

Employment contribution from wider tourism expenditures

Total employment contribution

Total regional distribution

North East

262

938

1,200

1.3%

North West

930

8,455

9,385

9.8%

Yorkshire & the Humber

327

4,845

5,172

5.4%

East Midlands

490

4,277

4,767

5.0%

West Midlands

948

4,270

5,218

5.4%

1,386

5,773

7,159

7.5%

East

The economic contribution of boating-related tourism in the UK

Region

Employment contribution from boating tourism industry

Employment contribution from wider tourism expenditures

Total employment contribution

Total regional distribution

London

1,367

3,407

4,774

5.0%

South East

3,866

14,303

18,169

19.0%

South West

2,746

13,593

16,339

17.1%

639

7,618

8,257

8.6%

Scotland

1,647

7,934

9,581

10.0%

N Ireland

322

5,414

5,736

6.0%

Total UK

14,930

80,827

95,757

100%

Wales

Source: ICF GHK estimate, 2013

GVA impacts are presented in Table 5.4 below. It shows that the £3.6 billion of tourism expenditure is estimated to support more than £3.7 billion of GVA in the UK economy, taking account of all direct and indirect effects. This suggests that every £1 of expenditure spent by people participating in leisure boating activities generates £1.03 of added value across the UK economy as a whole, when including direct and indirect effects. The £3.7 billion of GVA comprises: ■

£264 million of GVA (7% of the total), which is estimated to be value added directly by the boating tourism sectors of marinas and moorings, boat hire, charter, rental, sailing schools / training and ‘leisure’ passenger boats. This represents around 25% of the wider leisure boating industry (plus GVA from the ‘leisure’ passenger boat industry);

■

£170 million of GVA (5% of the total), which is estimated to be indirectly supported amongst the boating tourism supply chain; and

■

£3.3 billion of GVA (88% of the total), which is estimated to be value added directly and indirectly supported in the UK tourism industry through the expenditures associated with day visits and overnight trips that can be attributed to participation in boating activities and trips.

As with employment, the overall GVA contribution is many times larger than the core boating tourism sector. In fact, the total economic contribution of UK boating tourism is 14 times larger than the core boating tourism industry, when all direct and indirect effects are included. Table 5.4

Direct and indirect GVA impacts (£m) Boating tourism industry

Wider tourism expenditures

Total boating tourism

% of total

Direct GVA (£m)

264

1,497

1,761

37%

Indirect GVA (£m)

170

1,796

1,966

42%

Total direct and indirect GVA (£m)

434

3.293

3,727

79%

Source: ICF GHK estimate, 2013

If induced effects were also included to take account of the expenditures of employees directly and indirectly supported by these activities, they would add a further £1 billion of GVA. The total GVA contribution of boating tourism would therefore increase to support £4.7 billion of GVA in the UK economy. The distribution of GVA impacts by region is shown below and is similar to the above as GVA impacts are also highest in the South East, South West, Scotland and the North West.

The economic contribution of boating-related tourism in the UK

Table 5.5

Regional distribution of GVA impacts (£m)

Region

GVA contribution from boating tourism industry

GVA contribution from wider tourism expenditures

Total GVA contribution

Total regional distribution

North East

1.2%

North West

344

368

9.9%

Yorkshire & the Humber

197

205

5.5%

East Midlands

174

189

5.1%

West Midlands

174

197

5.3%

East

235

271

7.3%

London

139

180

4.8%

South East

141

583

724

19.4%

South West

554

626

16.8%

Wales

310

326

8.7%

Scotland

323

366

9.8%

N Ireland / Other

221

231

6.2%

Total UK

434

3,293

3,727

100%

Source: ICF GHK estimate, 2013

5.3

Comparisons to other countries and sectors Boating tourism in the UK delivers a significant economic contribution and is larger than: ■

the recreational boating industry in Canada, which consists of manufacturers, dealers, brokers, boat repair and maintenance, business services as well as the boating tourism sub-sectors included in this study. The Canadian recreational boating industry 73 supports 67,000 FTE jobs and £2.85 billion of GVA through direct, indirect and induced 74 effects . The equivalent figure for the UK boating tourism sector, including direct, indirect and induced effects, suggests that the sector supports 117,000 FTE jobs and £4.7 billion of GVA per annum.

■

the total recreational and light commercial marine industry in Australia. The Australian industry also encompasses a broader sector covering manufacturing, distribution, dealer, broker, retailers, business services and boat repair activities in addition to the boating tourism sectors covered in this study. The Australian recreational and light commercial marine sector supports 74,000 employees directly and indirectly in 75 the industry compared to the 96,000 FTE jobs estimated by this study to be directly and indirectly supported by boating tourism in the UK.

We can also use tourism related activities in other UK sectors to help demonstrate the scale and significance of boating tourism in the UK. For example: ■

the 2012 Olympic and Paralympic Games are projected to attract a net total of 10.8 million additional visitors (foreign and UK residents) between 2005 and 2017, including pre-event visits, the Games themselves and the ongoing legacy effect. The tourism expenditures associated with these visitors are estimated to total £1.7 billion, contributing

Using £1 = 1.75 Canadian Dollars NMMA Canada (2012) The Economic Impact of Recreational Boating in Canada 75 Boating Industries Alliance Australia (2011) Economic Structure and Performance of the Australian Retail Industry 74

The economic contribution of boating-related tourism in the UK

£2 billion of GVA to the UK economy and supporting 61,000 years of employment over 76 the period from 2005 to 2017 . The annual economic impact of boating tourism is therefore estimated to be more than twice the size of the tourism impact of the 2012 Olympic and Paralympic Games over the 12 year period from 2005 to 2017. ■

Boating tourism is also estimated to have a greater economic contribution than the UK film industry. The economic contribution of the UK film industry (including direct, indirect and induced effects, and its contribution to UK tourism, trade and merchandise 77 sales) is estimated to support £4.6 billion of GVA and 100,000 FTE jobs and is therefore slightly smaller than the economic contribution of boating tourism presented in this study.

The boating tourism sector is also larger than many commonly defined sectors of the UK economy, as shown in Table 5.6. For example, based on figures for 2012 from the ABS, the estimated £1.8 billion in direct GVA attributable to boating tourism is larger than the value added of the agriculture, forestry and fishing industry, the repair and maintenance of aircraft, the retail of automotive fuels, taxis, camping and caravan sites; news agencies; PR and 78 communications activities; veterinary activities; call centres; and the performing arts . Table 5.6

Comparisons with other sectors of the UK economy

Sector

Direct GVA (£bn, 2012)

Boating tourism

1.8

Repair and maintenance of aircraft

1.7

News agencies

1.7

Veterinary activities

1.6

Performing arts

1.5

Agriculture, forestry and fishing

1.4

Camping and caravan sites

1.4

PR and communications activities

1.3

Call centres

1.3

Taxis

1.2

Retail of automotive fuels

1.1

Source: ONS (2013) Annual Business Survey and ICF GHK analysis

Oxford Economics (2012) The Economic Impact of the London 2012 Olympic and Paralympic Games Oxford Economics (2010) The Economic Contribution of the UK Film Industry 78 ONS (2013) Annual Business Survey, 2012 Provisional Results 77

The economic contribution of boating-related tourism in the UK

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The economic contribution of boating-related tourism in the UK

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The economic contribution of boating-related tourism in the UK

Prepared by:

Document Title

Economic benefits of UK boating tourism

Prepared by

Andy White, ICF GHK

Supported by

Checked by Matt Rayment, ICF GHK

Contributor

Karen Boss, BMF

Date

6 January 2014

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