Difficult Times

[Wussername]

Amazingly we are seeing few hire boats on the rivers. Boats on the quay headings in the boat yards. Doing nothing, earning nothing. 

Why are the boat yards not discounting. 

Bums on seats. That is whats needed. Little or no contribution to the profit stream but at least a contribution to cash flow during those lean winter months.

There they sit on their moorings. 

Each and every boat sitting on a mooring has a potential of a revenue of several hundreds of pounds. 

Why is this income a discounted  income not being accepted as part of hiring a fleet of boats.

It defies financial gravity. Go for it, grasp every opportunity, not only for the individual hire company but for the broads economy in general.

Old Wussername 

[DAVIDH]

Isn't it just the norm that Broads boatyards do not discount (generally)? Coming from a wider travel background, it's always puzzled me that they act in the opposite manner from the package holiday industry. Is it that they saw what discounting could do in other businesses, driving prices downwards, that makes them shy away from it? Have to agree though, it makes no sense to see all that cash generating equipment tied up to the quayside. 

Having said that, though this coming week has lots of availability (despite the impending good weather), the following two weeks are really well booked. 

 

 

[mikeyboy1966]

Two weeks ago ,folk were having a pop at HW discounting a few boats for a last minute booking

[Wussername]

14 minutes ago, mikeyboy1966 said:

Two weeks ago ,folk were having a pop at HW discounting a few boats for a last minute booking

Indeed. I do not understand the reasoning behind such critisicm. 

Defies logic. 

 

[Smoggy]

It's like the minimum wage, it just starts a race to the bottom,  set a fair price from the outset instead of trying to profiteer and discount when the footfall tells you to sod off.

It also breeds a bit loyalty amongst customers. 

 

[Vaughan]

6 hours ago, DAVIDH said:

Isn't it just the norm that Broads boatyards do not discount (generally)? Coming from a wider travel background, it's always puzzled me that they act in the opposite manner from the package holiday industry.

Perhaps I ought to keep out of this as, since a similar discussion on another thread last week, I am made to feel like a right dinosaur.

All the same, "bums on seats" means the business model of the package tours.  They charter an aircraft to a beach resort, where they pre-book a number of hotel rooms.  Once they have filled half the aircraft and half the rooms, at the brochure price, they have covered their costs.  Any more bums they can put on the aircraft after that (pun intended) at whatever discount, is where they get their profit from.

The Broads business model is not at all the same.  For a start it is strictly seasonal, for only 32 weeks of the year.  The rest of the year, you make no money, and spend huge amounts on maintenance.  Customer loyalty is indeed very important, as well as regular customers booking in advance.  If you have plenty of advance bookings on your chart in February, you can take that to the bank for an overdraft!

Discounting has always been heavily avoided but I agree that this business model is changing.  I think this is largely because the internet allows people to book so easily as well as so close to the actual holiday date.  It also allows the yards to easily offer and advertise a late discount.  In the old days of Blakes Brochure, you couldn't do that.

So I tend to agree with those who say the yards should have set the prices more in line with trends, in the first place.  It's what we always had to do in the past - once you had set your prices in late September and printed the brochure in October, you were stuck with them!

 

 

[Vaughan]

By the way, an example of this big difference in business model can be seen when a group of large yards is bought out by a global package tour operator.  The two schools of thought find themselves locked in almost mortal combat.

We passed by the Canal du Midi bases on Friday and it really didn't look as though Le Boat had more than a handful of boats on hire.  I haven't seen them with more than half the fleet out, for two years now.

I wonder if I can guess why that might be?

[Mouldy]

1 hour ago, Vaughan said:

Perhaps I ought to keep out of this as, since a similar discussion on another thread last week, I am made to feel like a right dinosaur.

All the same, "bums on seats" means the business model of the package tours.  They charter an aircraft to a beach resort, where they pre-book a number of hotel rooms.  Once they have filled half the aircraft and half the rooms, at the brochure price, they have covered their costs.  Any more bums they can put on the aircraft after that (pun intended) at whatever discount, is where they get their profit from.

The Broads business model is not at all the same.  For a start it is strictly seasonal, for only 32 weeks of the year.  The rest of the year, you make no money, and spend huge amounts on maintenance.  Customer loyalty is indeed very important, as well as regular customers booking in advance.  If you have plenty of advance bookings on your chart in February, you can take that to the bank for an overdraft!

Discounting has always been heavily avoided but I agree that this business model is changing.  I think this is largely because the internet allows people to book so easily as well as so close to the actual holiday date.  It also allows the yards to easily offer and advertise a late discount.  In the old days of Blakes Brochure, you couldn't do that.

So I tend to agree with those who say the yards should have set the prices more in line with trends, in the first place.  It's what we always had to do in the past - once you had set your prices in late September and printed the brochure in October, you were stuck with them!

 

 

There have already been several posts on Norfolk Broads FB  groups, asking whether it’s worth booking in advance for next year, or whether to wait for the heavy discounting to be applied and make last minute bookings.

I’ve noticed that petrol and diesel are on the way back up again and not just local to me, by around 10p per litre.  The B o E are still threatening further interest rate rises, house prices are falling and overall inflation is still high.  With all of these (and more) factors to consider, is it any wonder that having set what I think was a dangerous precedent, some folk will avoid early booking in the hope of late discounting.

[TFrench89]

32 minutes ago, Mouldy said:

There have already been several posts on Norfolk Broads FB  groups, asking whether it’s worth booking in advance for next year, or whether to wait for the heavy discounting to be applied and make last minute bookings.

I’ve noticed that petrol and diesel are on the way back up again and not just local to me, by around 10p per litre.  The B o E are still threatening further interest rate rises, house prices are falling and overall inflation is still high.  With all of these (and more) factors to consider, is it any wonder that having set what I think was a dangerous precedent, some folk will avoid early booking in the hope of late discounting.

Suppose it depends who you book with, Richardsons never seem to discount (which I actually like). We paid £1.60 a litre at Richardsons for fuel, so definitely agree with regards to fuel prices. Can unfortunately see more yards closing in the next few years.

[C.Ricko]

Discounting encourages late booking, it is very difficult to budget not knowing what your income may be, we as a industry got into discounting in the 90s and it was difficult to get out of but we did, the problem started up again a few years ago but was widely avoided, the booking agents who are involved with caravan hires accept it and encourage it as a last minute boost to the commissions which I feel is derogatory to the loyal customer, there are about 700 hireboats on the broads which is probably about the same amount of caravans in Mundesley or Bacton.

I saw a 2 berth boat on sale for a short break last week for less than £300, bearing in mind there is £60 VAT on that I don’t feel the model is sustainable but obviously I don’t know their business. perhaps in the same way the ‘Sun Promotions’ covered the wages this could be doing the same. 
 

we have space in October which is still booking but so far we are only about 5% down on last years total which was a bumper year.. 

we have not discounted and don’t plan to for next year unless it’s an early booking.

I was taught by my father a fair bit to do with hirefleets so learned by his mistakes ..
desperate times call for desperate measures but I don’t think these are desperate times. 

[Meantime]

I keep feeling like I'm missing something in the various discussions about boat hire pricing and discounting. I hear the arguments for not offering last minute discounts, But, why are boat hire prices during the six weeks holiday higher than at other times in the first place. It's something called supply and demand. Demand is higher, the product is in short supply, so the prices are higher.

So surely it makes sense when demand is lower than normal, leading to an over supply, for prices to be lowered. With less printed brochures and the ability to make quick changes on digital media, pricing can be adjusted relatively easily and quickly.

The other day I was looking at flights to Porto, for the next two months there are about 15 different prices being offered depending on the day of the week I want to fly, availability of seats on the day I want to fly and time of day. The basic product is the same. The same plane flying between the same two airports. The price is purely driven by supply and demand.

Maybe it would make sense for the hire yards to set a more sensible price for all the weeks, and then as some weeks become more fully booked to actually increase the price for the few remaining boats they have left. This would encourage those who want certainty and a particular boat to book earlier. Conversely that would leave room for yards to lower prices in weeks that are not booking well. Allowing those who are more flexible and prepared to take a last minute chance to potentially snap up a bargain.

Whether it's a true bargain or not, sales and discounting are a day to day part of our daily life now. Maybe it's time for the industry to catch up.

[rightsaidfred]

During all my years as the one responsible for overseeing the purchasing of all our companies requirements I never dealt with any company that went down the road of discounting or price bettering, I expected every supplier to offer me their best viable price and terms at the time of tendering, I expected them to be able to offer me a price that allowed them a sustainable profit margin without overcharging me, on that basis i had a portfolio of reliable suppliers that benefited from my respect and loyalty, discounting only breeds suspicion of over pricing and profiteering in the first instance.

When applying this to hire boats during my hiring days it was common practise to offer early booking for the following year at that years pricing with a discount for a 2nd weeks hire which obviously reflected the saving on turnaround costs this offered the company as Clive said the opportunity to plan for the future, I know times have changed but so has the number of available hire boats and to me the companies that rely on discounting to move un-booked boats during peak times are not only overcharging in the first instance but setting a dangerous precedent where last minute booking will become the norm especially given the changing weather patterns.

Fred

[ruthandjohn]

We got to nearly 45% discount I think it was, for booking online with a HW loyalty, booking shortly after our last holiday, paying for the holiday upfront and being on the boat for two weeks. I feel like that's a better way to discount by rewarding loyalty and early booking and helps with business stability I'm guessing.

The last time we came, our first trip on the Broads, we got a short notice cancellation which did have a discount applied but not much really, maybe 10%, can't really remember - it was in Covid times and someone had to cancel their booking at very short notice, so it was a genuine last minute cancellation and it worked out for us as we could make it during those times.

While it would be great for prices to drop a bit, I feel that widespread discounting on a time before the holiday basis would probably devalue the whole thing and as others have said, could also lead to more last minute bookings which I'm guessing aren't so helpful from the business sustainability perspective.

[hazzer111]

Well we have been looking at next year's holiday and was looking at Silver Emblem from Ferry Marina. The prices seem to have been updated and are now £328 more expensive for 2024 (July before summer holidays). Quite the price hike, which has now priced me out of a holiday next year. 

[Broads01]

I hired Silver Emblem last year and it was lovely but please don't be put off coming just because of Ferry Marina prices. Ferry are a decent business but I've long said they need to look at their pricing which doesn't compare well to the competition at all. 

[hazzer111]

2 minutes ago, Broads01 said:

I hired Silver Emblem last year and it was lovely but please don't be put off coming just because of Ferry Marina prices. Ferry are a decent business but I've long said they need to look at their pricing which doesn't compare well to the competition at all. 

I have been on the broads quite a few times and this year went with them (plus decided to go for a winter cruise as well)! 

We have become big fans of the broads and enjoy taking the dog as well. Next year we wanted a dual helm boat to try it out (and maybe enjoy the one rare sunny day we get)! But it seems we may try going with someone else instead. 

[YnysMon]

We did our first couple of hires with Ferry Marina and were very happy with them. For our third trip, we were planning a fortnight. NBD were offering a good discount for the second week, so I asked Ferry whether they would match the discount (this was about five years ago before the ownership of both Ferry and NBD changed). Nope. So they lost our custom for the next couple of hires. 

[DAVIDH]

8 hours ago, Meantime said:

So surely it makes sense when demand is lower than normal, leading to an over supply, for prices to be lowered. With less printed brochures and the ability to make quick changes on digital media, pricing can be adjusted relatively easily and quickly.

The other day I was looking at flights to Porto, for the next two months there are about 15 different prices being offered depending on the day of the week I want to fly, availability of seats on the day I want to fly and time of day. The basic product is the same. The same plane flying between the same two airports. The price is purely driven by supply and demand.

You're describing dynamic pricing. An algorithm is loaded with historic information detailing booking levels from previous years so that an estimate of when to discount or increase prices can be acted upon with no human input required. It's why you see prices rise whenever an airline ceases trading (for example), and all of a sudden, throngs of people query other airlines to replace their lost flights. The algorithm just sees increased demand and ramps up the prices. In fairness, it does seem to have been accepted as a legitimate way to do business, and the airlines make a good profit.

It's a very technical piece of kit and probably costs a fortune to add to your business. It would likely be too expensive for our small-scale (by comparison) boatyards to employ.... unless they all contributed under some umbrella organisation like perhaps, Hoseasons or somesuch? I can't see it happening here. as many boatyards don't want to pay commission to a booking agent if they can avoid it, and as a result there's no collaboration, no seeing the bigger picture, and therefore vulnerability at times of a downturn in business. It's been said before that they're not just fighting each other for an ever-decreasing discretional spend, they are competing with tour operators, airlines, hotels, washing machine makers, TV manufacturers etc etc. My two-penneth, but I accept I am biased. 

[Mouldy]

53 minutes ago, hazzer111 said:

Well we have been looking at next year's holiday and was looking at Silver Emblem from Ferry Marina. The prices seem to have been updated and are now £328 more expensive for 2024 (July before summer holidays). Quite the price hike, which has now priced me out of a holiday next year. 

 One has to remember that Ferry, as well as one or two other yards, operate what they call an ‘all inclusive’ pricing policy, which doesn’t compare well to similar branding on foreign holidays that include food and drink, but does include all of the extras, such as fuel, parking, damage waiver etc. that are added on elsewhere.  If you intend to blast around the network, making good use of the included fuel, it could represent good value, however if you intend to potter about the northern rivers, in my opinion it is not good value for money.

There are plenty of dual steer boats available from other yards.  Windsor Bridge from Bridgecraft for example or maybe Swan Ranger or Moon Enterprise from Richardson’s, depending on the size of your party.

Have a look round - there are plenty of options that may fit your requirements.

[Dan]

20 hours ago, Wussername said:

Amazingly we are seeing few hire boats on the rivers. Boats on the quay headings in the boat yards. Doing nothing, earning nothing. 

Why are the boat yards not discounting. 

Bums on seats. That is whats needed. Little or no contribution to the profit stream but at least a contribution to cash flow during those lean winter months.

There they sit on their moorings. 

Each and every boat sitting on a mooring has a potential of a revenue of several hundreds of pounds. 

Why is this income a discounted  income not being accepted as part of hiring a fleet of boats.

It defies financial gravity. Go for it, grasp every opportunity, not only for the individual hire company but for the broads economy in general.

Old Wussername 

Some yards are, as someone mentioned HW' s offer

We used them (HW) last year because they were the cheapest last minute with an unmatchable offer on a suitable boat (and they could hire us a rowing boat), however I would only use them again on the same basis now, and outside of that or if booking early would want to book somewhere knowing they wont email me a sister boat 30% off the days before my holiday when I want to be in my best and most excited mood!  So they create a rock and hard place situation for themselves, though sometimes you just have to have the money in/now.

Outside of this I think early booking should get the best discount (but then I like to be fair when life is not), but certainly you can look to the past of holidays abroad to see what happens if you just say bums on seats anything is better than nothing.  The reason we are not all holidaying abroad with Clarksons anymore points to you can learn plenty about the future from the past should you be open enough to want to (though there was more than price, but it was part of it).

Sometimes a compromise isn't so bad, a smaller discount for last minute (and in normalish seasons you font get the boat you want but a bit of a sweetener) isn't quite so unfair, but personally a good price from the beginning and being able to choose what you want early is for me the best way to go, but then I did always do everything with the long term in mind

Dan

[hazzer111]

3 minutes ago, Mouldy said:

 One has to remember that Ferry, as well as one or two other yards, operate what they call an ‘all inclusive’ pricing policy, which doesn’t compare well to similar branding on foreign holidays that include food and drink, but does include all of the extras, such as fuel, parking, damage waiver etc. that are added on elsewhere.  If you intend to blast around the network, making good use of the included fuel, it could represent good value, however if you intend to potter about the northern rivers, in my opinion it is not good value for money.

There are plenty of dual steer boats available from other yards.  Windsor Bridge from Bridgecraft for example or maybe Swan Ranger or Moon Enterprise from Richardson’s, depending on the size of your party.

Have a look round - there are plenty of options that may fit your requirements.

Absolutely, now we will be debating whether to book in advanced or just see what's available at the time. Which obviously isn't great practice, but if thats when costs become cheaper.. 

Yeah the all inclusive part is obviously a factor. However the fact the price has jumped up over £300 (for the same dates) just seems a bit crazy. Understand costs are high for boat operation, but from this year to next it can't be that much surely! 

[hazzer111]

5 minutes ago, Dan said:

Some yards are, as someone mentioned HW' s offer

We used them (HW) last year because they were the cheapest last minute with an unmatchable offer on a suitable boat (and they could hire us a rowing boat), however I would only use them again on the same basis now, and outside of that or if booking early would want to book somewhere knowing they wont email me a sister boat 30% off the days before my holiday when I want to be in my best and most excited mood!  So they create a rock and hard place situation for themselves, though sometimes you just have to have the money in/now.

Outside of this I think early booking should get the best discount (but then I like to be fair when life is not), but certainly you can look to the past of holidays abroad to see what happens if you just say bums on seats anything is better than nothing.  The reason we are not all holidaying abroad with Clarksons anymore points to you can learn plenty about the future from the past should you be open enough to want to (though there was more than price, but it was part of it).

Sometimes a compromise isn't so bad, a smaller discount for last minute (and in normalish seasons you font get the boat you want but a bit of a sweetener) isn't quite so unfair, but personally a good price from the beginning and being able to choose what you want early is for me the best way to go, but then I did always do everything with the long term in mind

Dan

This is my point, the cost increase just seems to price people out of the holidays.. Then they end up with boats left over, then high discounts putting them at a slightly more reasonable price. If the prices were no so dramatically increased then people would be more inlinced to hire. 

I still plan on it, just will have to have a rather in depth search! 

[Bikertov]

In general, you have to remember (stating the obvious in some of my points) that the Broads boat hire industry is very different to foreign package holidays in so many ways, including:

• A large number of the hire yards are relatively small scale, family owned business, rather than the massive package tour companies
• There is a limited number of boats available to hire (Clive mentioned c.700 ?), compared to the 1000s' of resorts and 100's of thousands of hotel rooms
• The Broads is a far more niche holiday, compared to 2 weeks in the sun by a beach or pool
• Package tour operators are there to make a margin on flights and rooms - OK, some will own/lease the aircraft but others will just charter, and none own or run/maintain the hotels

So the yard owners are taking all the risk personally and directly in running the yard, owning and maintaining the fleet, employing the staff in a harder and harder (UK) work environment.

A package operator can still re-negotiate deals with their buying powers, fill the last few seats/rooms at a discount and still make money, or maybe lose a bit but take the turnover for cashflow. They would normally have cash reserves to tide them over until next year

The typical Broads yard is not in that position, and will need to make a profit each year to keep in business and keep employing the staff and family, and make a modest but fair profit.

So I get it when the likes of Clive is reluctant or refuses to give late discounts, save for small loyalty or advanced booking reductions. It is a very different business model, that needs more stability in pricing and revenue prediction in order to thrive and build.

 

[rightsaidfred]

2 hours ago, Bikertov said:

In general, you have to remember (stating the obvious in some of my points) that the Broads boat hire industry is very different to foreign package holidays in so many ways, including:

• A large number of the hire yards are relatively small scale, family owned business, rather than the massive package tour companies
• There is a limited number of boats available to hire (Clive mentioned c.700 ?), compared to the 1000s' of resorts and 100's of thousands of hotel rooms
• The Broads is a far more niche holiday, compared to 2 weeks in the sun by a beach or pool
• Package tour operators are there to make a margin on flights and rooms - OK, some will own/lease the aircraft but others will just charter, and none own or run/maintain the hotels

So the yard owners are taking all the risk personally and directly in running the yard, owning and maintaining the fleet, employing the staff in a harder and harder (UK) work environment.

A package operator can still re-negotiate deals with their buying powers, fill the last few seats/rooms at a discount and still make money, or maybe lose a bit but take the turnover for cashflow. They would normally have cash reserves to tide them over until next year

The typical Broads yard is not in that position, and will need to make a profit each year to keep in business and keep employing the staff and family, and make a modest but fair profit.

So I get it when the likes of Clive is reluctant or refuses to give late discounts, save for small loyalty or advanced booking reductions. It is a very different business model, that needs more stability in pricing and revenue prediction in order to thrive and build.

 

There are not to many left now, I am sure most understand the cost  involved in designing and building new boats, there is also the juggling act of earning enough during the season to cover the rest of the year while remaining attractive to customers, every business has overheads to cover whatever its nature.

The  problem with simply comparing the cost of hiring a boat to other forms of holiday is that you are only paying for self catering accomodation, the overall cost of the holiday can be considerably more for the average family, this may be ok if the  broads experience is the driving force  behind the choice but doesn't stand up if its just as an alternative holiday.

Fred

[Vaughan]

11 hours ago, Bikertov said:

The typical Broads yard is not in that position, and will need to make a profit each year to keep in business and keep employing the staff and family, and make a modest but fair profit.

Don't forget they are building their own boats as well and have to make enough to invest in that too.

Somehow, on the Broads, we get away with hiring boats of 40 years old or more.  Largely because, as a whole, they are kept in very good condition but then that level of maintenance is also very expensive.  After all, you wouldn't hire a 40 year old car from Hertz, would you?

In Crown Blue line, before we were bought by Le Boat, we were trying to build at least 36 new boats a year, just so that the average age of the whole fleet would not go above 17 years before they were sold.  When you build a boat it takes around 9 to 10 years to pay off the finance.  Once it gets to about 15 years the boat is due for a complete re-fit, so another capital cost to be repaid.  So there is not much of a "window" to make a profit out of a boat.

Then there are staff costs : In very basic terms, one man in a small business can look after 7 hire boats (as long as he is young and fit!) but if you get to 8 boats, you need to employ a man. This will take you to about 12 boats, then you need another man, to take you to 18 boats, and so it goes on up, in steps.  This is partly why the larger yards are more successful as they can make a more economical use of their staff.

It's a very costly business, I am afraid.