“Captains need to take into consideration the maintenance of the yacht but also the service one would expect whilst on board, never mind the costs of berthing the boat and rising fuel prices,” explains Anita Griffiths, manager corporate and trust services at Döhle Corporate and Trust Services, who tells The Crew Report the main initial cost centres for a yacht’s budget are crew, deck/interior, engine, communication, management/legal and port costs – though these can be split into approximately 20 more detailed cost centres.
Crew costs, highlights Griffiths, is one intangible area for owners and as such is a facet of the budget they are not always clear on, so it is imperative captains understand the costs of their crew. A 50m yacht will have approximately 12 to 15 crew with monthly salaries ranging from 15-thousand euros for the captain to two-thousand for the lowest-paid deckhand, resulting in an annual wage bill of over one-million euros, explains Griffiths – and this isn’t including the recruitment fees, repatriation and insurance costs, especially on a yacht with high crew turnover.
Moreover, when it comes to berthing and mooring costs, the most expensive berths in the Mediterranean can cost up to 6,500 euros per day while regular spots can still set you back a daily rate of 450 euros, Griffiths continues. A 70m+ superyacht, she adds, can use up to 500 litres of diesel an hour when stationary with the engines running; when moving, it will cost in the region of 2,500 euros an hour.
A 50m yacht will have approximately 12 to 15 crew with monthly salaries ranging from 15-thousand euros for the captain to two-thousand for the lowest-paid deckhand, resulting in an annual wage bill of over one-million euros.
These are just some of the figures provided by Döhle Corporate and Trust Services, and these and additional figures are looked at in more depth in issue 12 of The Superyacht Owner, but with these figures so varied, the question remains: who should be working on a yacht’s budget? “The heads of department,” answers Captain Malcolm Jacotine. “The heads of the engineering, deck and interior and catering departments should also be involved in the development process and should have responsibility for managing their departmental budgets. This serves a number of purposes: it helps improve the accuracy of the budget and serves as a motivational tool by giving senior crew ownership of there area of expertise.”
A budget also gives a yacht’s captain an invaluable tool to analyse a yacht’s expenditure - always useful in the ‘business’ world of yachting and particularly in the charter market. “Following good accounting practices there should be sufficient cost centres and the metrics to enable a thorough analysis of expenditure. For example, with suitably defined crew costs the budget could be used to highlight and identify the real cost of high crew turnover by spikes in recruitment fees, repatriational and travel costs, uniform and training, and provide the financial imperative to resolve the situation. Lumping costs together limits transparency and value of the budget, and should be avoided.”
Captains, tell your owners to look out for an extended advisory article on working with captains to set realistic budgets in issue 12 of The Superyacht Owner, out in April!