IYC has had a particularly impressive start to 2017 with a number of large superyacht sales and it would seem that the charter department is in an equally strong a position as Katya Grzeszczak, sales and charter consultant at IYC, tells me as we sit aboard the resplendent M/Y Andiamo at the MYBA Charter Show in Barcelona.
Historically, Grzeszczak’s charter clients were predominately Russian, however, she says that this client demographic is thinning, with Russians preferring to be “under the radar” and out of the mainstream media's limelight. As such, Grzeszczak’s clients are now 80-90 per cent American and choose European destinations for their charter holidays.
“My clients are booking, increasingly, in the Eastern Mediterranean,” Grzeszczak explains. “Croatia is very popular at the moment and I have a few clients wanting to go to Turkey.” She believes this shift may be due to Greece closing its doors to non-EU charter yachts, spurring a redistribution of charter business.
Grzeszczak also mentions that charterers in Croatia no longer really benefit from using Montenegro as an embarkation point, apart from for duty-free fuel. This is because the VAT in Croatia is now charged on an unavoidable pro-rata basis for commercial yachts. So, if a charter embarks guests in Montenegro and proceeds to spend six days in Croatia, charter guests will need to pay Croatian VAT for those six days. As such, Grzeszczak says that the benefits of embarking in Montenegro for a charter in Croatia are negligible.
“I always say to my clients that there’s no point spending your holiday trying to qualify for reduced VAT."
However, she believes that tax – and its avoidance – shouldn’t be the ‘be-all and end-all’, as it has often proved to be traditionally. “I always say to my clients that there’s no point spending your holiday trying to qualify for reduced VAT. They might spend their entire charter waiting for the right weather window to make a crossing that allows them to benefit from reduced VAT, but it’s silly to do that.”
More and more of Grzeszczak’s clients are taking this on board: she mentions that her family-orientated charter clients are now looking for a more enriching experience that is away from the ‘flashy’ and well trodden stomping grounds - and they are willing to charter in higher-tax jurisdictions to do so.
Grzeszczak says that the charter market is now very much a seller’s market. “When the economy was bad a few years ago, a lot of people were trying to book last-minute charters so that they could get a good deal – and a lot of clients still think that’s the case, but it’s not.
“I’m regularly telling my clients that if they wait too long to make a booking, they will end up with nothing. Another thing we’re noticing is that the average charters are getting longer. Charter bookings in the Mediterranean are for a minimum of two weeks at the moment, so the boats are getting booked up quickly.”
The clever charterers booked for this summer, last summer. You have to book early at the moment, otherwise you’ll be paying full-rate for a boat that is not up to your expectations because there were fewer options with availability. “People are beginning to figure out that it’s not how it used to be,” Grzeszczak concludes.
If you've found this story to be 'a report worth reading', and you would like to enjoy access to even more articles, insight and information from The Superyacht Group, then you may well be interested in our VIP print subscription offer. We are inviting industry VIPs to register for a complimentary subscription to our print portfolio, which includes the most insightful information on the state of the superyacht market. To see if you qualify for our VIP subscription package, please click here to fill in an application form