Are we being screwed by marina operators?

[Peppermint]

The Dec YM asks whether we "need a law" to protect us from the likes of MDL, Crest Nicholson, Premier etc.

Does anyone know what sort of returns these companies are making from the boat parking end of their operations?

Are they really making out like bandits? Or is their reinvestment leading to improved services & lifestyle for us all?



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[Neraida]

I think that its slightly like complaining about the price of anything these days. MDL and their brothers in arms (can never see them as competitors) will always be able to "justify" their prices due to increases in council business taxes, increasing wage bills, increasing cost of third party maintainance, massive cost of future investment and shareholder divvy's...

I'm afraid the only way to "get away with it" is to lease/buy, usually along with a house.... where you "only" have to pay maintainance charges.

Other than that there is the always the sell up and bugger off to spain/greece etc...

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[ianwright]

Yes Bandits is about right. Compare Dutch marnas, like for like they charge around 1/3 of UK prices.
For me MDL management and others like them will always be 'the enemy'.
IanW

<hr width=100% size=1>Vertue 203, Patience

 

[cgull]

Definately being shafted. My berth in Falmouth has gone up by at least 30%. Well, not actually gone up but fallen victim to a clever "re-banding" arrangement. My length falls just over the "special deal" for boats under 6.5m. I am still on the same pontoon which is still the same length as it always has been.

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[robp]

I've always said that mooring/berthing costs here, will be the first thing that would stop my sailing as an owner. I don't think that they are out to do us "favours" exactly. However we do have to remember that chunks of land on the South Coast of England cost more than on the N.E. coast of France. Holland, I'm not sure about.

That having been said, I guess that "Real Estate" is an initial investment and it's capital growth isn't exactly bad news for the operators. Unless they rent it!

<hr width=100% size=1><P ID="edit"><FONT SIZE=-1>Edited by robp on 25/11/2003 09:38 (server time).</FONT></P>

 

[neutronstar]

I find the level of income a berth holder earns determines their stance on this issue. We still have a body of yachties who enjoy the exclusivity of boating and would probably move off into golf or winter sports if we ended up like Holland.

We certainly don't have the attitude to boating enjoyed by the Dutch and the boat crime levels over here are a disgrace. The cost of security, and the lack of municipal or 'not for profit' berths also knocks up the costs. The big boys don't want other marinas nearby and usually take up very long leases on the land they "aquire".

In short the poorer folks in Britain don't get a look in and the struggling well qualified bods like me scrape by in old togs, selling our houses to get cash, and carrying out 'all' maintenance ourselves.

Do we have the will as a nation to change? More mutual marinas and a severe clamp down on boat crime would be two good areas to start.

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[tony_brighton]

You probably aren't being screwed in the sense that marina pricing isn't based on a 'cost plus' formula but on a 'what the market will bare' formula. This is obviously driven by the supply and demand problem with too much demand for too few berths. This makes the pricing insensitive to increases (we have to park somewhere) and allows marina operators to keep putting up the price until they start to get empty berths - which we haven't really seen yet on the South coast. I'm not aware that the government can impose price restrictions in a fair and legal manner - one for the lawyers here. However, they may be able to encourage further environmentally considerate development of marina berths which do bring local economy benefits as well. At least this way we could balance the supply side of the equation.

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[tcm]

Poor Britons? Adam Smith rules OK

eh? Where did this "poor britons" come from? We have the most expensive houses, we travel abroad far more than continentals, even a casual glance at the road traffic shows that the "expensive car count" in Manchester is higher than in Paris, and in London is higher than in any other european capital outside Monte Carlo. Generally, we're rich.

It is initially attractive to regulate, but interesting that yachties (or really, yottie journos?) wd choose to regulate at the levels of holding down marina berth pricing, you know, a bit.

But I imagine that the same people would not be happy if their own industry was regulated so that the prices charged by lawyers, teachers, landlords, company directors was similarly regulated - so as to be affordable by those who want to use these services. Continental Europe has lots of these sorts of regulations. The marina berths are "cheap" to us because they're skint, and quasi-socialist governemnt win elections on the basis of limiting the amount of time you can work so as to somehow reduce the amount of unemployment - effectively capping salaries. They want us to do the same.

Competition is what makes good things better. No competition, no real pressure on improvement, as witness trains etc. Witless wrong-thinking governements think that they can make money out of franchising these, when the real benefit would be to make the tube almost free of charge, but i digress. Having a boat isn't a necessity, so the primary competition is to do something else, or move the boat somewhere else if price rises are too high in the solent, frexample.

Prices are too high when the marinas empty, when the waiting list disappears, and control of the waiting list is a prime factor in determining berth prices - competion from going somewhere else or even not having a boat at all. In the same way, in order to buy a boat, you decided to do something else, work harder, work smarter, not take the easy route and sit about complaining - you took advantage of the competitive market.

Oh, and finally - why would regulation make it cheaper? Council tax isn't half price in august when there's no grit and no school is it? Council tax (and all tax) isn't even cheaper in real terms than before computers were used - which should surely have made it a lot cheaper to carry out administration. By contrast, unregulated boat prices are cheaper, and we all reap the benefits of technical advances with competition blwoing away those who can't compete.

In order to succesfully reduce the waiting list the price has to go up. In order to fill up an empty marina, the price has to come down. Doesn't matter whether you're a right wing git with a full marina, or a left wing git with a transport problem in central london.

 

[BlueSkyNick]

Along the same lines that marina costs would stop you sailing, they were the biggest consideration to us buying our boat in the first place.

We shopped around for boat and berth at the same time, and committed to both on the same day, so we could budget accordingly. This ensured we didn't end up with a boat with no (affordable) berth, or a berth with no boat.

It is a large amount of money for the average yachting family, but it comes back down to good old "Market Forces". If nobody paid their marina charges, the price would have to come down, but as most of the Solent marinas are full, then the price is sustainable for the operators.

Its not going to change until there is a hard hitting recession, which would be an even worse scenario so we are better off as we are - the lesser of two evils.

<hr width=100% size=1>People who think they know it all are very annoying to those of us that do.

 

[neutronstar]

In Holland (for example but there are other places which are similar) you can:

tie up at the municipal quays free,
get water or fuel in a marina or club usually free for the few hours you are there,
stay overnight at a boatyard jetty for coppers,
stay at a club or marina overnight for less than half the cost in the UK,
stay for nearly any length of time at a fixed berth again at a low price.

All these options are free of the level of crime we see in Britain (although it would be daft to leave an unlocked vessel without a watch on board, as is the case anywhere).

Where I live in the UK you can pay £26 a night in a marina or tie up on the rivers as a club member at low cost; and have everything on board either stolen or smashed regularly.

This polarised situation in the UK is really the hub of the problem as I see it. More choice of places to moor, with a range of facilities would ease the problems for everyone and allow new entrants into this fantastic pastime. It is not a case of political bias or pauper versus squire, simply a case of what we as a nation really want from our waterways and our coastline. Is boating a property developer's goldmine or a national pastime which keeps the nation healthy ?

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[Peppermint]

Re: If you speak to people in the industry

They tell you that...

a> They have improved both their attitude and their facilities in recent years.

b> The chances of getting a new marina built anywhere anyone wants one are
slim. Thats why they're cramming more boats into the same space.

c> The legislation and security driven costs are growing out of kilter with the
growth of the business which is restricted by further legislation.

d> The municiple marina is unlikely to take hold and if it did operating it would be
contracted out to companies like we have now.

e> They make healthy profits rather than spectacular returns

It is difficult to see where change will come from or how a law could be helpful.

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[Sybarite]

When others below use the supply & demand for marina price fixing this economic argument only holds good when there are free alternatives to choose from.

The question to ask is have MDL and the likes been given any exclusive concessions which puts them in false market position?

I know that if someday I returned to the UK I would not be prepared to pay 3 times as much for my hobby as I do today. My Feeling 9m20 marina berthing costs under £1000 with free electricity, water and showers. I also have free overnight berthing at about a dozen other S. Brittany ports. Elsewhere I am never charged in a port unless I stay overnight and I have never been charged for electricity or water anywhere.

Many years ago in France motor bike insurance became proihibitive. The bikers therefore got together and formed an association and created their own insurance compoany with premiums at a fraction of what they had been previously.

If sites are still available in the UK - possibly in conjunction with local authorities who would have an economic interest - then it is envisageable that an association of yachtsmen could fund their own marina. It need'nt be fancy - a floating breakwater and some pontoons. A local pub could serve as club house.

John




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[neutronstar]

As we added to this discussion today I noted that both CN and MDL's share prices rose significantly yet again.

They must be laughing at the pipsqueaks.

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[Peppermint]

Re: My you have been away a long time

The problem stems from Local Authority planning restrictions. These result from a number of things.

1. Is that tree huggers and bird strokers have a lot of clout both locally and
throughout the land.

2. Is that local residents vote and local business' don't. Residents don't always see
why they should get involved in paying for facilities for "people who ain't from
round here" "They's from London"

3. Well, boat ownership is still seen as elitist.

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[neutronstar]

Just to throw another view into the debate:

If the supermarket analogy is appropriate, we have had great resistance from our own supermarket chains against the influx of American warehouse type shops. The big British boys claim that their service is top class with good parking and superbly appointed and presented goods. The 'would be' competition would ultimately arguably reduce the standard of supermarket shopping in the UK by undercutting the current semi-monopoly.

The top drawer UK marinas are similar I feel. They do give a superb standard of service and security. Every facility is available (at a price), although their corporate attitude leaves much to be desired sometimes.

If money was no real issue I would choose to use them and not worry too much
BUT
I can't afford their prices.

I shop at ALDI & LIDLE and prefer their cost/service/quality balance.

I am forced into much the same realistic view with berthing, but I don't have the choice when it comes to where I put my boat.


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[ParaHandy]

Re: 30% pbit nm

.

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[DeeGee]

The normal laws of supply and demand do not work in a situation of limited resources. The resource is berthing, and it is certainly limited.

Competition is not possible as, no matter how much dosh you have, you cannot start up a new venture to compete with the existing players. That is the current situation.

Even if one of the operators dropped their prices dramatically, it would not cause any pressure on the rest, as the goody operator would rapidly lose any spare capacity to competitively take customers away from the baddy.

So, it is more like the diamond market, where the sole supplier decides the prices. Unlike diamonds, our berths don't sparkle quite so brightly.

I suspect if the resources were not limited, and competition prevailed, then the marina operators might well be able to supply the same standard of performance for less money. Efficiency goes hand in glove with competition.

<hr width=100% size=1>Black Sugar - the sweetest of all

 

[ParaHandy]

On the face of it the answer is yes ... but look a little closer and you see:
a) most marinas are run or have ultimate owners who are leisure sailors of one sort or another. Some claim this to be an advantage but ...
b) the financiual structures of those that i've looked at appear less than professional. The owner appears to have treated it as a hobby. One owner used the marina as a cash cow to invest in an offspring's cpy and which performance left the parent's accounts qualified (and that with 40% pbit). Another requires adding the holding cpy of the holding cpy to the marina cpy to get "a fair and accurate view" such is the, admitted, rather messy structure.
c) marina cpys have large and growing investments in residential property. the appreciation in value of the marina property has been a considerable benefit. a recent restructuring valued the ordinary share capital of one cpy at £125m from a £20m turnover.

a summary would be that they had the foresight to be in the right place at the right time ... but ... and I can't quite say why you feel disquiet other than have seen too many other bubbles burst ...


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[Sybarite]

In the end it's a question of a commercial enterprise as opposed to a club approach.

A commercial entity needs an acceptable return on capital employed - greatly exacerbated by south coast property values.

A mutual approach by boat people acting on their own behalf would concentrate on keeping prices down and would not worry about return.

John

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[ParaHandy]

Re: capital costs of a marina

One large marina, which may or may not be typical, spent approx £10,000 to build each berth and receives income of £3,300 per berth. The capital cost was borrowed from BoS against marina property at +2.5% MLR. Assume 30% pbit (after depreciation (written down over 20yrs), maintenance, ground rent & labour etc costs) gives £1,000 profit. Deduct interest cost and the profit is £300 per berth ...

two thoughts: 1) would a UK bank lend on that asset? and 2) would a £300 saving be sufficient to encourage a group?

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