COVID impact on Marine tourism
We are starting to see the effects of lack of cash flow to ability of businesses to hold assets and hence opportunity to secure marine assets at lower values though increased supply and low demand. Those with big enough cash reserves may be able to ride out the 2-3 year period with minimal impact on asset values. However if the assets need to be sold to meet debt there will be significant shifts well below book values.
We have commenced listing minor assets on our spares/equipment page and will build on this over coming period to en-mass specify the assets breaking away from previously operational businesses. We believe at least a slide towards 50% reduction in asset value is starting. As government financial support is reduced without a ramp up of tourist numbers, the strain on operators will increase. Currently the market has softened in vessels by around 5-10% on pre covid numbers for commercial vessels and expect that if cash flow is not restored within 12 months the 50% reduction projection will emerge.
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