LONDON (Reuters Life!) - The recession has taken its toll on London's International Boat Show this year with fewer exhibitors and smaller attendances expected, but boat-builders are more confident for 2010, organizers said on Friday.
Britain's marine industry has had to cut back during the deepest recession in decades, with employment falling 2.5 percent, and production at many boat yards being hacked back.
But there was an air of confidence and optimism for the coming year, carried over from Britain's other international boat show at Southampton in September, buoyed by the weakness of the pound, new markets, the development of niche products, and increased numbers of customer enquiries.
"Like every other sector of industry it has been a hard 2009, but a lot of our leading players took some tough decisions at the start of the recession which means they are now in a position to sustain themselves through it," said Howard Pridding, executive director at the industry group the British Marine Federation (BMF).
About 500 exhibitors will be at the 10-day show, which began on Friday, 40 down on last year.
Visitor numbers to the London Excel center, likely to be affected by a combination of recession and snowstorms, are expected to be about 12,000 lower than the recent three-year average of 122,000.
Some boat-builders were lured by late discounts and others have reduced the number of boats they have on show.
But figures from the BMF showed only 12 percent of respondents to its six-monthly survey viewed the future negatively, compared with 38 percent in late 2008.
A fall in the pound's value against other currencies has made British boats cheaper relative to their continental competitors, making them look good value and more attractive to potential buyers, encouraging some boat-builders, such as luxury yacht maker Oyster to deliberately push their European sales.
The exchange rate was a key factor for some visitors at the exhibition at the ExCel.
"It makes a huge difference -- it's a 30 percent price difference," said retired chartered surveyor Godfrey Wilkinson from Sheffield, who was eyeing a Northshore yacht, built in West Sussex, southern England.
But the currency exchange rate has also hit those British companies which import parts from Europe.
"Last year, we improved our sales by 3.5 percent... but our profit dropped through the floor because of our buying problems," said Robert Braithwaite, founder of Sunseeker International, the motor yacht company, whose business is 98 percent exports.
It was the first time he could remember a loss at the company, but said the situation had re-stabilized because it had negotiated new deals.
Companies have had to take a long hard look at their supply chains, and will emerge from the recession "fitter and stronger," the BMF's Pridding said.
While some markets have effectively disappeared, such as the United States, others have opened up, including China, the Far East, South America and Eastern Europe.
Boat-builders with niche products, such as custom-made yachts, have already seen sales pick up during the past year.
Cornish Crabbers, the traditionally styled sailing yachts made in south-west England, and priced between 20,000 pounds ($31,900) and 120,000 pounds, has a forward-order book until June.
Just over a year ago it was in liquidation but its assets were bought by a company set up by Philip Langsdale, an IT manager at airports operator BAA, who was a Cornish Crabber enthusiast.
"All the boats are built to order, so I think that helps in this type of market," Langsdale said.
"The type of people who've got enough money to buy these boats like to have a bit of something built for themselves."
Editing by Keith Weir