Lessons for 2014: Charter
2013 has been a strong and steady year for the charter market. All signs point to next year being even better but what should owners know about the year ahead? Angela Audretsch asked top charter brokers for their advice for owners in the charter game for 2014.…
2013 has been a strong and steady year for the charter market. While there has been significant charter tax changes in Europe, this year has seen few surprises for the market but the general consensus is that supply and demand are finally reaching more of an equilibrium and the market remains on a steady upward curve. Many brokers have reported the reinstating of the ten-day and two-week minimums for bookings and more owners declining low offers. All good signs but what do brokers think that the year ahead holds? Angela Audretsch asked top charter brokers for their advice for owners in the charter game for 2014.
What is the one piece of advice you would give owners who want their yacht to be successful on the charter market in 2014?
"The way to ensure a fully booked charter yacht is to treat each enquiry as if it were the last." – Alex Garro, charter marketing manager, Camper & Nicholsons International
“[I think] we will soon be approaching the point where in the absolute peak season of 15 July to 15 August, demand will start to outstrip supply – certainly in the 45 to 60m range. With this in mind owners may wish to be mindful of accepting low offers over this time, while still being flexible on the shoulder periods of June, early July and late August. Early bookings, even if slightly discounted, are great for defining a yachts initial cruising grounds and give a firm base on which you can build a solid calendar so do warrant more flexibility.” – Tom DeBuse, charter management, Y.CO
“The answer to this is simple – employ a great crew! It’s by far the most important aspect since a highly motivated, professional and friendly crew will make all the difference and enhance the yacht’s reputation on the charter market.” - Neil Hornsby, charter director, Burgess
“It is the same advice as always: get back to basics. It is all about an exceptional product and an exceptional service. A charter-savvy, experienced, professional crew is your best asset. The boat has to work, be attractive and well cared for, have amenities suitable to her size/class, and competitive rate, that’s all a given. But it is the captain and crew reputation that will bump your boat to the top of the list at decision-making time.” – Ann Landry, charter broker, Northrop & Johnson
What do you think is going to be the biggest barrier for owners of charter yachts to overcome next year?
“The biggest hurdle will undoubtedly be coming to terms with all the different VAT regulations.” – Sacha Williams, charter marketing director, Camper & Nicholsons International
“There are an increasing number of rules steering the industry but now the Maritime Labour Convention has come into force it’s going to be a challenge for owners to comply with the new regulations. I’m all in favour of any safeguards to protect crew and improve working conditions but how the convention will play out in the red hot charter environment will be interesting.” – Neil Hornsby, charter director, Burgess
“One of the biggest barriers to chartering in a lot of Europe by next summer is the charge to VAT and having the yacht properly VAT registered in those countries before it can even begin to charter there.” - Alena Zilayova, senior charter manager, YPI Charter
“The biggest barrier for charter yacht owners to overcome is the habit of setting high rates and then slashing them. Clients have become accustomed to bargaining for rate reductions in recent years, and waiting until “last-minute” to make lowball offers attractive so some owners. Although I would like nothing more than to return to the days of the fixed rate, I believe negotiating is here to stay.” – Gina Robertson, US charter broker, Fraser Yachts
“It’s likely there will be an increase in demand for the eastern Med with the introduction of VAT in the western Med countries. This leaves a question of delivery fees to be negotiated and whether it is worth making the journey – certainly a huge question in comparative terms for the smaller yachts with high delivery and lower charter fees. VAT in the differing EU states is still cumbersome and far from universally clear or transparent – as we get to the point that this becomes more actively policed any owners that haven’t had their records kept in a clear and orderly manner may find themselves at risk.” - Tom DeBuse, charter management, Y.CO
What is the one piece of advice you would give owners who want their yacht to be successful on the charter market in 2014?
"The way to ensure a fully booked charter yacht is to treat each enquiry as if it were the last." – Alex Garro, charter marketing manager, Camper & Nicholsons International
“[I think] we will soon be approaching the point where in the absolute peak season of 15 July to 15 August, demand will start to outstrip supply – certainly in the 45 to 60m range. With this in mind owners may wish to be mindful of accepting low offers over this time, while still being flexible on the shoulder periods of June, early July and late August. Early bookings, even if slightly discounted, are great for defining a yachts initial cruising grounds and give a firm base on which you can build a solid calendar so do warrant more flexibility.” – Tom DeBuse, charter management, Y.CO
“The answer to this is simple – employ a great crew! It’s by far the most important aspect since a highly motivated, professional and friendly crew will make all the difference and enhance the yacht’s reputation on the charter market.” - Neil Hornsby, charter director, Burgess
“It is the same advice as always: get back to basics. It is all about an exceptional product and an exceptional service. A charter-savvy, experienced, professional crew is your best asset. The boat has to work, be attractive and well cared for, have amenities suitable to her size/class, and competitive rate, that’s all a given. But it is the captain and crew reputation that will bump your boat to the top of the list at decision-making time.” – Ann Landry, charter broker, Northrop & Johnson
What do you think is going to be the biggest barrier for owners of charter yachts to overcome next year?
“The biggest hurdle will undoubtedly be coming to terms with all the different VAT regulations.” – Sacha Williams, charter marketing director, Camper & Nicholsons International
“There are an increasing number of rules steering the industry but now the Maritime Labour Convention has come into force it’s going to be a challenge for owners to comply with the new regulations. I’m all in favour of any safeguards to protect crew and improve working conditions but how the convention will play out in the red hot charter environment will be interesting.” – Neil Hornsby, charter director, Burgess
“One of the biggest barriers to chartering in a lot of Europe by next summer is the charge to VAT and having the yacht properly VAT registered in those countries before it can even begin to charter there.” - Alena Zilayova, senior charter manager, YPI Charter
“The biggest barrier for charter yacht owners to overcome is the habit of setting high rates and then slashing them. Clients have become accustomed to bargaining for rate reductions in recent years, and waiting until “last-minute” to make lowball offers attractive so some owners. Although I would like nothing more than to return to the days of the fixed rate, I believe negotiating is here to stay.” – Gina Robertson, US charter broker, Fraser Yachts
“It’s likely there will be an increase in demand for the eastern Med with the introduction of VAT in the western Med countries. This leaves a question of delivery fees to be negotiated and whether it is worth making the journey – certainly a huge question in comparative terms for the smaller yachts with high delivery and lower charter fees. VAT in the differing EU states is still cumbersome and far from universally clear or transparent – as we get to the point that this becomes more actively policed any owners that haven’t had their records kept in a clear and orderly manner may find themselves at risk.” - Tom DeBuse, charter management, Y.CO
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