A change of view could help equestrian business viability *H&H Plus*

Even without the coronavirus, times have been tough for riding schools, livery yards and competition centres. H&H speaks to centres and businesspeople to find out what could be done to help

A CHANGE in perspective from both employers and clients could be key to ensuring equestrian businesses stay financially viable in challenging times.

H&H has reported on the many and varied impacts of Government policy, such as business rates and minimum wage increases, rising insurance premiums and the industry’s need to remain relevant to clients with a wide choice of leisure activities to choose from – even without the effects of the coronavirus.

But another obstacle to being able to make a profit could be clients’ views of the sector.

“I feel quite strongly that people need to be realistic about what it costs to keep a horse,” Tullis Matson of Stallion AI Services, also president of the Equestrian Employers Association (EEA), told H&H.

“Wages have to go up, prices of feed and insurance go up, but livery doesn’t; people need a reality check about the costs.”

Tullis cited the everyday costs livery yard owners must take into account when setting prices, such as staff time, feed and forage, which could near £20 per day for full livery. But on top of that, yard owners have to take into account factors not only including business rates and insurance, but also depreciation in value of buildings, and the cost of maintenance.

“You have to be realistic about what it costs, but you have to make a profit to survive,” he said, adding that a common attitude in the UK equestrian world is that people do the job for the love of it; so not only is making a profit not always seen as an integral part of running the business, some owners are more equestrian- than business-minded.

“It may be a slightly survival of the fittest thing, where those who have steady price increases every year will carry on but others fall behind and suddenly have to put prices up by a lot more, and owners will say they can’t afford to pay it,” he said.

Undercutting

TULLIS said the issue of local yards undercutting each other, by charging prices that mean they cannot make a profit, was raised at the EEA conference last year, as was the possibility of trying to set a cap so all yards can survive.

Aurora Eastwood, who runs a livery yard from her home in Hampshire, told H&H she has suffered from others offering cheaper livery. She had to put her prices up, as she was losing money on her business.

“All the local yards charged roughly the same as I did but I could no longer operate on that basis,” she said. “I couldn’t justify making a loss any more.”

Ms Eastwood agreed with Tullis that some clients do not take into account all the costs; even running a tractor for an hour to level the arena or maintain the fields costs £25.

“There’s an odd pressure or acceptance in the horse world that you shouldn’t expect to earn money from working with horses, but that’s wrong,” she said.

“If you put your dog in daycare, people seem to be prepared to pay £25 or more, a child in nursery might be £65 to £100 per day, with the same staff-to-child ratio as I have for horses, for a third of the time I look after horses here – and a small child doesn’t eat as much as a 17hh warmblood.

“I think as an industry, all yards need to look at their costs and set a fair profit margin for their work and care.”

Helen Williams, finance director of the Wellington Estate in Hampshire, which includes Wellington Riding equestrian centre, told H&H staffing costs are the biggest challenge, as it is such a labour-intensive business.

“This year has shown just how much as we can’t cut those costs,” she said. “It’s been really hard and if we hadn’t had the support of the estate, I’m not sure Wellington Riding would have survived.”

Ms Williams agrees equestrian centres’ clients must be realistic.

“I’ve got my horse because I can afford to keep her but I’m aware she’s a luxury,” she said. “If I couldn’t afford her, I couldn’t have her; it’s not up to where I keep her to fund her for me.

“There’s a sense that it’s an entitlement, having a horse, but we’re a business and we have to charge enough to cover costs. We charge £249 a week for full livery and we don’t make money on that.”

Ms Williams says Wellington offers different livery packages, such as using horses in lessons, to try to make it more affordable but also viable.

“It’s a tough business to be in, especially now,” she said. “You have to love the job, but it also has to be commercially viable.”

A riding school owner who did not want to be named told H&H he should charge more for lessons, but if he does, he feels clients will go somewhere cheaper.

“All centres are struggling, in my view,” he said. “We looked at buying some others and starting a chain, but the figures made awful reading. You’d have to invest so much into them but there’s no chance of getting that back.

“This is the bitter pill people are seeing when they try to retire – then land agents appear, saying the business isn’t worth anything, but they’ll knock it down and build houses; that’s one reason riding schools are disappearing. We get people here probably every month, speculatively, talking about building houses here.”

The owner said his school gives some 12,000 lessons every year, and he struggles to believe that this does not make a profit.

“It may be there are too many riding schools,” he said. “Maybe we’ll end up with fewer, bigger, centres eventually, and they’ll charge more; but that will make us back into an elite sport again, which would be a real shame.

“I think centres will have to evolve, maybe offering coffee shops and lounges, but the horse world wants everything on the cheap and it’s just unrealistic.”

H&H approached the Government’s business department for comment, pointing out that the equestrian industry is worth about £8 billion to the economy annually not to mention its benefits in terms of exercise and mental health, its positive effects on re-offending rates and getting young disengaged people back into education or work, and it would be a great loss if riding centres continued to be closed as they are not able to make ends meet.

A spokesman for the department said: “We want the UK to be the best place to work and to grow a business. The national living wage delivered the fastest pay rise for the lowest earners in 20 years, with the latest increase this April estimated to benefit over eight million people, directly or indirectly. To make it easier and cheaper to grow a business, we’ve committed to review and reduce business rates.”

You may also be interested in…