The 2019-20 edition of the Clipper Race Round the World Race will be the 12th of the race which sells berths to aspiring circumnavigators and adventurers who can sign up for a single leg of the crewed, multiple stop race. This edition is another sell-out, highlighting what a remarkable business success Clipper Ventures and the race has become. While the Clipper Race allows thousands of ordinary individuals to realise their ambition of sailing around the world, three sailors lost their lives during the 2015-16 race and the 2017-18 race. Tip & Shaft spoke with William Ward OBE is co founder and chief executive of the Clipper Race during the first stopover.
So William it seems Clipper is going from strength to strength right now in terms of turnover and profit?
Yes, we are doing well. We struggled in the early years but that shows a massive turn around. Nice and profitable, which it needs to be because we have got to buy, at some point in time, new boats and things like that and we are doing a lot in China now but yes, it is in a good place at the moment.
The financial pages in the UK recently quoted Clipper as making about £3.5 million profit or something is that right?
That’s correct
And that’s a turnover of what, roughly?
£22 million, something like that. That’s over the course of a race (approx two years) so you could half that as a yearly thing. It’s about £24 or £25 million over two years. I tend to talk per race rather than per annuum.
So what does the race contribute and what does the training contribute, just roughly?
The race is pretty much the majority of our income because the training element depends what training we are talking about. For example now we have got 800 people through a months’ worth of training so we know our base costs are for that but you would have to start pulling out costs of boats and it’s just not worth the effort really because it is irrelevant where you end up at the end of the year sort of thing.
The business in China, how is that doing?
I think that is going to be very big. We set up a 100% Chinese company which has sold 40% to a Chinese investor, so that cash element there is what’s fuelling the Chinese business. We have got two new fleets of yachts being built at the moment, a seven meter and a twelve meter and there our aim is to produce one a week of the seven meters and one a fortnight of the forty footers. They’re designed by Tony Castro, I won’t say where they are being built but they’re being built in China in two different yards. Our initial order I think is for sixteen of each, but we intend to build fifty a year of one and twenty five a year of the other.
Fifty of the smaller one presumably?
Yes, and the idea there is that they will be used in our own academies, because we are setting up academies throughout the whole of China and we will be announcing some new races within China. The boats will be for sale through our schools we will create races for the people who have bought our boats. So, it’s a very new concept in China, something that nobody has ever done before. We are signing MOU with the Chinese government to do this and there will be RYA schools.
Is the demand already in China or are you creating the demand or what is the balance there?
It’s a bit of both. I mean, we have been going to China as Clipper since 2006 and we have seen the demand just absolutely escalate, we didn’t have a Chinese person in that race, I don’t know that there was a Chinese person that had sailed in an Ocean race at that particular time, I don’t think there was. We actually trained up the first guys and the first Chinese sailor on the Volvo race (Guo Chuan) was trained by us. 110 Chinese people who have sailed in a race and 95 of them have been trained by Clipper. There’s a whole new breed of people in China who have got the cash, they earn good money. Before they didn’t really get sailing, now that sort of 25-year-old, 20-30 year olds are a different generation who get it. So, from the old school approach of, if you had money then someone else drove your boat for you. People want to do it themselves. We have got, I think forty Chinese people on this current race. So yes there is a demand and I think their frustration is that they have got nowhere to train and the training which has been done so far has been at such a poor level, that is what spurred us to do it.
On this current race you say you’ll have over 700 people compete in total?
It is 716, something like that. There are about 800 that we start off training and then some don’t make it as far as we are concerned. One hundred will do the whole race.
The cost now to do the whole race is about £49,000? And what is the cost of a leg range from and to?
Yes and the cost of the training, whether you are doing an around the world slot or one leg and this includes about 1500 pound of clothing is about five and a half thousand, and then the leg prices go from about six and a half to seven and a half. It’s gone up three or four percent per annuum basically we found that certain levels reach barriers, certain legs need chopping and changing a little bit. One becomes more popular than another one for whatever reason with a couple of different stops in it. I think we are now selling a couple of hundred places for the 2021 race and an around the world slot I think is £54000. When you’re doing the pricing it is so difficult because your looking so far in advanced we have already sold sponsorship for 2023-2024 and people know that that is when they are going to come into some money or take a break or retire so they are already planning their trip for the ‘23-‘24 race. It’s hard to get your mind around how far in advanced we have to think.
This race is sold out?
It pretty much is all the time, you get the odd space where right at the very end. Pretty much some of the legs have got long waiting lists for if people drop out. Two or three legs are never fully sold out. We set a number that we would have been absolutely over the moon with and every time we have beaten that number.
What is the range of costs to the cities as a host stop?
Well from a hosting perspective, depending on where we want to be it can be anywhere from £250,000 to £2 million. So you could have a small stop that we ideally want to be at or you could be a stop where they have a boat and want to promote it around the world and that can be a two million price tag.
What is the economic benefit of what you bring to a city in terms of a stopover?
I have never said we would bring them something like hotel room nights, it’s not a football match and it doesn’t work like that. One deal for instance between Holland Humber had a boat and between Findus food, the Cape Breton fishing industry for cod and the Chinese packaging deal came to $100 million over a three year period. They had never talked to each other before we got involved. We put the people together with the mayor of a Chinese city, and they were struggling to get through whatever red tape it was with that. That then opened the doors and the deal was done and it was done very quickly.
So basically, you do an overall evaluation of what it may be worth, in terms of business, in the big picture and that’s how you put your price on the stopover?
Yes, to a degree and what is big numbers to one city is nothing to another one so you couldn’t get a Chinese city like Qingdao which is growing huge economic opportunities, I mean the manufacturing there, the shipping, the whole city. So, every pound they spend would be completely different to say Falmouth or Southampton, there’s no comparison.
And is it the same for sponsorship, what’s the range for the sponsorship, presumably there’s a sliding scale there?
Yes, it’s similar thing there. There are some sort of starter packs depending on what they want to do, where it could be as little as £25,000 where they are people that we use within the sailing industry and just want to be associated with their product and things like that. Again, up to a quarter of a million plus product.
For example, what would Sanya have paid out in last time?
Sanya is a city so that is a two million tag.
And is that relatively easy to sell, in terms of a package?
I don’t think anything is easy to sell like that no. The bigger the number the more you start competing with other brands and sports and things like that. So, for a city they will only have maybe one major yacht race, so you’re competing with whether they want the basketball or the football or the rugby or a marathon. They have only got so many key months and so much money but more importantly they only have so much event staff to put things on. So, the bigger cities can have ten major events whereas we could be their one major event.
Do you have any measure of how many people stay on, at a high level in sailing?
We have never measured it as such. We do know that we have probably created more people than any other brand in sailing in Britain, I absolutely believe that. A lot of the people who come to us have never sailed before and then they carry on sailing and they carry on either with their own boats or with other people but take for instance Sir Keith Mills. He was on the ’98 race he then supported Alex Thomson, he has probably put £200 million into sailing? Of his own money……that came from being on a boat when he was forty in the ’98 race. He wasn’t a sailor, I think he had been sailing but he wasn’t what you would call a sailor. At the time he owned airmiles, or nectar and he sponsored Alex Thomson and they have had a great relationship ever since. One of our Australians, well he lives part time in Australia, he’s a very wealthy guy and he was a crew member he’s got a big campaign, open ship scheme, races all over, and his team that he put together are all ex-clipper. I can’t remember his name, there are a few like that who are dotted here and there but there is only a few at the very, very, top. Most of them are French. We have always struggled with France, you would think that such a great sailing nation, that the French would have a team boat and there would be a queue of French people.
You were interested in the Volvo race as well weren’t you as a business before it was taken over by Atlant?
Yes, I was, I wouldn’t have paid a lot of money for it and it needed a sponsorship from them but not as title, but it would have needed some support to ease through it. Otherwise we could never have afforded to fund the level that they do. I thought that the team that we have got here were pretty much halfway to creating a business. If is could have been put towards our route obviously there was a lot of tie-in with it which was a lot of overlap. The model needed changing, they’ve got whatever model they have now, and I don’t know too much about it now. Their boats are superb, what they do is incredible, the speed, everything else about it. I just hope that with all the other races going on now, that they haven’t taken the shine off it, because otherwise it is going to be a struggle to attract the level of sponsorship that you need. It has to have that. The technology and the cost of those boats is just astronomical, even with their savings there will still be an awful lot of money towards one boat.
When are you due to replace your fleet for the Clipper Race?
We will do one more race certainly with these ones, they are in great shape.
How many races have they done?
This will be their fourth, if you look at the 68s we have got they could all still go around. They’re all still working for us. We sailed two to Australia and we are going to put some in China, they’re all still going strong. All the original fleet of sixty footers from the ’96 race could all go on and on. We are just early days of deciding when we will do that.
You have had a certain amount of criticism for the loss of life in the recent races, how has that affected you and what have you done to change the procedures for this race?
Well, obviously it’s incredibly sad, and we are in that environment but the last one was so, so, incredibly unlucky the way that parted, they struggled to re-enact that in the lab I mean it had tonnes of pressure on it, but any time anything like that happens it is soul searching for us and you do whatever is recommended but to be honest we are well above what is the recommended standard is. Some of the criticism was very unjust, there was lots of things happening in the press to stop that because we feel that we have to defend ourselves and not we would rather not drag things along but a lot of these reports criticise the length of the tether but miss that there were two tethers and the length of the tether was agreed because we take out a lot of the professional bodies on our training. There are not many people that have boats of our size that they can test on. So, we end up doing lots beyond what anyone ever sees and we have always worked with the authorities. You can only do what is recommended before an event and then after put whatever’s right in each time but awful things happen and it weighs very heavily on my mind all the time. I’m sure in years to come unfortunately you know, it is a mega ocean out there and the waves are still as nasty as they were 200 years ago. Safety procedures have just gone, compared to what it was 20 years ago, my son was the first to have done the Clipper race and that was ’96 and when I think of what the authorities told us to do then in comparison to now it has changed dramatically. There will always be an accident, you know, people die on a football pitch, you will never stop people wanting to do something that is exciting.
The element of danger is important to the whole thing isn’t it?
Yes, danger, but top athletes who take risks with sky-diving and what you would consider a danger sport, are the ones who are most thorough and check their kits to make sure it is right but there will still be that one in a million chance of something happening. It could just be that down below you bang your head. Should we put people in cotton wool? I have broken bones severely skiing, I rolled a race car recently but that’s an important element of life isn’t it? People want to challenge themselves.
What other directions or trends are you looking towards with the company?
Who knows how many boats we will have in the next fleet, so there is a lot of growth potential there. The training school at Hamble has proven to be really successful, that was a great purchase, great people, and because of all the Clipper people that has created a lot more business because previously a lot of our crews were getting their certificates before and afterwards at different schools who were issuing normal sort of Yachtmaster certificates and things like that so that has created business for that school. Really for me, I am backwards and forwards to China, which could be a business very quickly worth 50 million quid. So, that is the goal to create that. Where it took us probably twenty years to get Clipper up to that sort of value, I think we could do that in four years with China.
Then you sell up and head for the Bahamas?
Well I could have headed to the Bahamas a long time ago but I do get such a buzz out of what we do, I love it. It’s gone well beyond doing it for the wages and the dividends. It’s a way of life, I’m sixty-two probably don’t have to work, Robin is 80 doesn’t have to work and here we are both at a stopover enjoying seeing what it does for people. I get a buzz out of the crew and the business side as Robin does, he loves to see the amount of people that are sailing, it’s in his blood. I don’t know what I would do to replace it, we have had chances to sell out a couple of times. At some point, don’t get me wrong we will sell some of it, I know Robin thinks he’s forty but he is eighty and I would be nice to look after our families and everything else, but it would be a very sad day. I think it will be one of those things where you bank the check then think my god what am I going to do now.
Who owns the company?
It is pretty much owned, I am a majority holder I own 60%, Robin owns 30% and three friends of mine own about 9% between them.
Photo: Clipper Round The World Race
