UK: Sunsail International - first flotilla. (2 of 4)

UK: Sunsail International - first flotilla. (2 of 4) - Gordon landed the prize in August 1982. It cost him £300,000, made possible by an interest-free loan repayable in instalments; and it brought him 48 small yachts, all lying in the Mediterranean. The

Last Updated: 31 Aug 2010

Gordon landed the prize in August 1982. It cost him £300,000, made possible by an interest-free loan repayable in instalments; and it brought him 48 small yachts, all lying in the Mediterranean. The younger Gordons transferred to Hayling Island to take charge of things, but success did not come immediately. "The first winter was very, very hard," says Sally Gordon, who was working on reservations for the 1983 season.

Nevertheless, Gordon added another dozen boats to his fleet in the first year (that summer bookings "just took off", recalls his wife); and almost 40 more in 1984, when Island Sailing at last showed a small profit. The acquisition of a competitor helped lift the total to over 200 yachts at the end of 1985, a year when profits reached around £300,000. Two seasons later, with some 250 boats in the fleet, profits had more than doubled to £714,000 before tax. It seemed obvious that economies of scale were what really counted in flotilla operation. Then came the merger with YCA.

The deal cost approximately £2.6 million in a mixture of cash, loan and preference stock. Gordon had no problem raising the wind: his company was making good profits and, only a couple of months earlier, had received an injection of capital from institutional investors, which took a 10% stake in the equity. YCA was perhaps two thirds the size of its purchaser, and considerably less profitable, but it was unquestionably Island Sailing's principal competitor in the Med. Bringing them together gave Gordon undisputed leadership in this sector of the UK holiday market.

However, economies of scale cease to apply when the market subsides. Maintaining the cracking pace of growth into 1989 was a misjudgement that Gordon now rues. He was reportedly aiming for revenues of around £15 million: the outturn was rather more than £11 million, 20% up on the year before. But costs assumed that the planned 50% revenue increase would be achieved. Thus during the first half year the company was paying interest on the financing of 120 new boats that it did not need. "We spent the whole year disposing of surplus capacity," says Gordon. In 1990 there were no further additions to the fleet. As for the coming season, there is again "no commitment".

The fall-off in demand from the UK in 1989 was to some degree cushioned by the Germans and Americans. "Foreign markets became more important," acknowledges Sally Gordon, who is these days - in between looking after three small children - in charge of the marketing effort. The company opened an office in Munich in 1987. It has since acquired a small Geneva-based operation; also a 50% interest in a Caribbean charter organisation which markets the entire Sunsail programme in North America.

Yet flotilla sailing is a British, and to a lesser extent Dutch, phenomenon. Although the Swiss subsidiary runs some flotilla boats in Turkey, comparatively few continentals or Americans (as the Gordons had already discovered, to their cost) can be persuaded to sign up for a flotilla holiday. Even the gregarious Germans prefer to go sailing by themselves rather than in company. It is partly the language problem - which also has significant bearing on direct labour costs.

The leading boat in each flotilla is sailed by the flotilla skipper, along with the engineer, the hostess (combining the roles of organiser, schoolmarm and nurse) and maybe one or two others. The men, at least, are supposed to be capable sailors and mechanics, and probably belong to that floating population of young people who can be found in every yachting centre: bronzed antipodeans on the grand tour, recent graduates who cannot face the prospect of a routine job, and semi-professional layabouts who want nothing better than to pull on ropes for the rest of their lives. They are mostly recruited for the season, drift away at the end of autumn, and may or may not come back next year. And because they are in it for fun they are cheap. "We can pay relatively low rates," confirms finance director Rupert Green.

A flotilla of, say, German holidaymakers, on the other hand, would need to be accompanied by a German-speaking (and therefore probably German) lead boat. And in that case Sunsail could be obliged to pay as much as double the British going rate to its crew. "I wouldn't say we've given up trying to persuade Germans to come on flotilla holidays," says Sally Gordon; but what is the point if "they're adamant to go bareboating"?

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