Thirty years ago, when the maritime industry saw booming growth, management companies invested heavily in infrastructure in a bid to provide sufficient levels of sufficiently trained and qualified crew. Having made significant financial investments, understandably the managers did not want the crew they had supported to go and work for someone else and this is when they began offering this all-inclusive crew management.
“Very basically, the owner pays the manager a fixed fee every month. That fee includes crew wages, recruitment, travel, food, clothing, medical costs and training. The crewmember works for the manager rather than the owner. This means the vessel has two budgets – one for the crew, controlled by the manager, and one for all other operational costs, controlled by the owner,” explains Holloway. Managers, he adds, will control costs by simply using one travel agency, uniform supplier, insurance company, training school and so forth.
- Jonathan Holloway, manager of yacht services, Fraser Yachts
But this was how it worked back then. Will today’s owners respond to it and is it really feasible, and likely, in today’s market? “The owners liked the idea; it made things so much easier for them. The crews liked it – stable employment with a single employer. The managers liked it and saw a great opportunity and this is now by the far the biggest part of ship management. All this happened about 30 years ago in shipping and in terms of industry development I reckon yachting lags behind shipping by around 20 years, so it would be my prediction that we will start to see monthly fixed-fee crew management in yachting within the next few years,” predicts Holloway.
In fact, Fraser Yachts has been asked to provide its first ever quote for this type of management structure and a recent conversation Holloway had with an industry figure who has regular contact with many owners saw the industry figure predict that 40 per cent of owners would go for this sort of programme due to the burdensome nature of dealing with crew matters as an owner.
“I’m not saying that in the future all yachts will have fixed-fee crew management. To many owners their yacht is their hobby and the interaction they have with their crew they very much enjoy. But I would guess something along the lines of 50-50.”
One possible drawback of moving towards the commercial sector in this way is the involvement of unions, and this sort of management programme could offer unions the chance to get more involved with the luxury sector in which, at the moment, involvement is limited. However, the benefits for owners are clear and it will be interesting to see if the industry takes to this new structure and, should it do so, the speed at which it permeates superyacht crew management.