For many the decision to engage with the yachting world is all or nothing - to charter or to own. While this isn’t strictly the case, it is the picture that the market seemingly paints of itself. But, in reality the differences in means required to either charter or own a yacht can be significant. “Charter is the most effective route to ownership,” goes the old mantra, but the truth is that most of those who charter will never even consider ownership. Like charter, ownership has its own mantras such as, “if you need to ask the price you can’t afford it”.
There is stark contrast between chartering for a week or two - either paid for by an individual or a group of nearest and dearest - to an individual financing a yacht for an indefinite period of time. To add to the perceived gap in wealth, a resale market saturated by overpriced yachts does not provide much of an exit strategy for those who tried their hand at ownership only to decide is wasn’t necessarily for them. Yet, when people speak of fractional ownership and various other less conventional structures the idea is usually met with derision – but those who live in glasshouses should not throw stones.
Whilst it is undeniably a healthy market, driven as it is by the many owners trying to mitigate costs, at times even the charter market can be haphazard, not in all cases, but in enough instances for it to be considered risky. Pricing is largely based on the size vessel and prestige of the shipyard, not the quality of its crew and service, so how do you guarantee the quality of the trip? I was once told that a charter is only as good as the captain, the chef and the chief stewardess. This may explain why charterers so frequently request the same vessel with the same crew, anything else falls into the realm of the unknown and unknown qualitative factors are not an attractive prospect when you are paying vast sums of money for an experience.
Have we created a chaotic market place? Those who want greater access to superyachting, as well as greater flexibility and control, have little choice but to take a leap of faith. Before they do so are they made fully aware of the realities of ownership? An ex-owner, who by no means speaks for all, described it to me in these steps.
• Year 1 – You love your yacht; you spend six to seven weeks on board and show all your friends.
• Year 2 – You still love your yacht, but you don’t have quite as much time to spend on board and many of your friends want to do something different.
• Year 3 – Crew become restless because you aren’t on board enough and you decide to try chartering to keep them engaged, you soon realise charterers want to be on board for the best weeks of the year.
• Year 4 – You no longer love your yacht, you allow the charterers to have the best weeks because you want to mitigate costs - you also put the yacht on the resale market.
• Years 5 – 8 – You continue to charter the yacht, using it when you can, but mostly hoping it sells.
In issue 175 of The Superyacht Report we will explore why there is such a large gap between charter and ownership, as well as analyse some of structures that offer alternative routes to greater access and control.