In mid-2020, the Polish Chamber of Yacht Industry and Water Sports, POLBOAT, conducted a survey on a group of nearly 100 enterprises – SMEs and large enterprises representing various segments of the yacht market – to assess the condition of the boating industry in Poland in the context of the COVID-19 (SARS-Cov-2) pandemic. The aim of the survey was also an attempt to prepare a forecast for the industry at the end of 2020.
Key questions for the participants:
- Overall assessment of the company’s current situation in connection with the SARS-Cov-2 epidemic.
11.25% of respondents assessed their situation as dismal, 47.5% responded that is is worse than in previous years. In total, nearly 60% of companies related to the industry consider that the situation had worsened. 31.25% said the current situation was unchanged for them, and only 10% of companies said it was better.
The results are very similar for the boat and yacht manufacturing group, and the supplier group. On the other hand, a clear difference can be seen in the responses of charter companies. As many as 40% described their situation as much worse, and another 45% as worse than before the epidemic. 10% replied that their situation had not changed much and only 5% of companies said that they were better off.
Nobody expected such a poor assessment of the situation by the entire industry at the beginning of the year, when the shipyards could boast many orders, most of which were signed in 2019.
- Turnover in the first and second quarter of 2020 – the entire industry.
2020 started very well for the industry. 37.5% of companies replied that their turnover in the first quarter was even greater than in the corresponding period of 2019. And 35% of companies in the industry had a turnover at a similar, high level as in 2019, which was a record for the entire industry. Only 27.5% admitted that their turnover decreased, but this result was largely influenced by the second half of March.
The results of the second quarter show very clearly the change in the market situation and a significant decrease in the industry turnover in basically all sectors. Higher turnover in the second quarter of 2020 compared to the corresponding period of the previous year was declared by only 10% of companies, 26.5% reported that their turnover remained at a similar level as a year ago in the same period, and as many as 63.5% reported a decrease in turnover.
- Turnover in the first and second quarter of 2020 – boatbuilders.
In the group of producers, in the first quarter, higher turnover was recorded by 38.1% of shipyards, a turnover at a similar level was reported by 33.3% and lower turnover was indicated by 28.6% of companies.
In the second quarter, 14.3% of producers declare a turnover higher than a year ago and 30.9% on a similar level, but a decrease in turnover is reported by over half (54.8%) of the shipyards.
This can be attributed to:
- challenges with boat transport, especially in the initial phase of restrictions implemented around the world because of the SARs-Cov-2 pandemic
- deliveries from foreign companies due to the total lockdown in many countries, incl. in Italy, France, and China
- the inability to contact the customer or recipient directly
- financial delays and bottlenecks
- human resources
Everyone was affected, regardless of the company’s location. However, differences were noticeable in the results of companies, in relation to size.
Slightly more than half of micro and small enterprises declared an increase or maintenance of the last year’s level, and the other half reported a decrease in turnover at the end of the second quarter.
The situation was much worse in the first half of the year in medium and large enterprises. Here, a decrease in turnover is declared by nearly 70% of the surveyed enterprises.
- Turnover in the first and second quarter of 2020 – suppliers of materials and components to produce boats and yachts.
When it comes to suppliers, the situation has also deteriorated significantly. In the first quarter, a total of 84% of companies had a turnover higher or at least at the same level as in 2019. In the second quarter, over 70% of companies reported a decrease in turnover.
It is worth noting that while in the case of producers, the declines in the second quarter are in the range of 10-20%, the level of declines among a significant number of suppliers is reported in the range of 30-50%. In the group of suppliers, the negative effects of the pandemic were particularly affected by those companies that cooperate with foreign shipyards, from France, Italy, or England, which completely suspended their operations for several weeks.
- Turnover in the first and second quarter of 2020 – charter companies
In the first quarter, about 21% of charter companies had a turnover higher than a year ago due to a greater number of bookings, 23% had a first quarter like last year, but 55.5% already recorded a decrease, mainly due to the dynamically deteriorating situation in the second half March.
In the second quarter, 100% of charter companies report a drastic drop in revenues. Charter companies generally did not resume operations after the winter break, suffering huge losses. Virtually 100% of small charter companies have suspended or closed. Resuming operations in the period July – September did not compensate for the losses in the first half of the year.
- Forecast of the yacht industry turnover in the second half of 2020.
In the general opinion of entrepreneurs in the yacht industry in Poland, the second half of the year should be better than the first half of the year. Overall, 12.5% of companies in the industry declared that despite the second, much stronger wave of the pandemic, they expected higher revenues in the second half of 2020 than in the second half of 2019. 23.75% of companies assumed that the turnover would remain at a similar level. Unfortunately, over a half (53.75%) expected a decrease in turnover. 10% of entrepreneurs were not able to predict their situation at the end of 2020.
Among boat and yacht manufacturers, these sentiments were more evenly distributed. 21.4% of shipyards expected higher turnover, another 26.2% assumed that the turnover would be like 2019, and 35.7% of companies forecasted a decrease in turnover. Interestingly, as many as 16.7% of the companies were not able to make any forecasts.
- Main threats in the second half of 2020.
As the main threats to the functioning of the yachting industry in the second half of the year, entrepreneurs indicated:
- limited on non existing new orders
- fear that the autumn and winter fairs in Europe will be cancelled
- limited possibility of presenting the product to the consumers
- general impoverishment of the population and a significant reduction in purchasing power
- loss of financial liquidity.
The SARs-Cov-2 pandemic hit Poland in the first half of March 2020 and hit companies related to the boating industry very quickly. Although most of the shipyards operated practically all the time, the industry has clearly experienced the negative impact of the pandemic and the consequences may continue for many months to come.
When asked about the assessment of state support for enterprises, 27.5% of companies assessed them as “definitely below expectations” and 29% as “below expectations”. On the other hand, 37.5% of companies replied that this “does not concern them”, and only 6% admitted that they had the opportunity to use any form of aid and assessed the state’s actions in this respect as “moderately positive”.
In the second half of the year, despite the escalation of the pandemic in Europe and the world, several positive signals appeared, such as: the next stages of defrosting the global economy, the return to the functioning of the boating industry in other countries and all supply chains working again, improvement of freight transport and the opening of borders to passenger traffic (unfortunately only for a few months). At the same time, most boatbuilding plants in Poland began to record a significant increase in the level of orders for the 2020/21 season, despite the cancellation of basically all major autumn and winter fairs. Signals coming from the industry suggest that the second half of the year was much better for the Polish boating industry than the first half of the year and better than the forecast. To verify the forecasts with the actual state of the industry, POLBOAT will repeat the survey in January 2020.
We look forward to sharing the results of the survey and our interpretation of them in one of our upcoming newsletters.
Piotr Jasionowski | GMBA- Poland
+48 50 146 9550
Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA