The days when an owner could easily fill in the gaps between personal stints on their yacht with weeks of charter are finished. When supply outweighs demand, a healthy dose of realism is required. Travel and charter editor Angela Audretsch caught up with several top charter brokers at the MYBA Charter Show in Genoa to discuss the current state of affairs and see if there is anything owners can do to make their yacht one of the charter success stories.
Owners are now finding themselves in a market where their yacht is just one of many in the market where supply massively outweighs demand. The question is: have you adjusted your expectations accordingly?
Every owner loves their yacht and thinks it deserves, and wants to get, the highest price for a charter on it,” says Tom DeBuse, charter manager at YCO. “But your expectations must be realistic for the market.” There has been a 50 per cent increase in charter yachts available through MYBA over just five years. This surplus means that now more than ever, running a successful charter yacht needs to be approached with a business mentality.
The state of the market and its demands on owners has effectively split owners into two camps. The effort, cost of being commercial and all the changing legislation that goes with it, owners are more focused on running either really serious charter yachts or fully private yachts.
If you are an owner who relies on the income from charter to offset the cost of running your yacht, taking it off the market is not an option. In this case, the brokers agree that flexibility is the main key to success. “Owners who want to be really successful need to be really flexible,” says Fiona Maureso of Northrop and Johnson. “Flexible with the charter fees, the delivery fees and when they use it themselves.” It doesn’t need to be about offering big discounts. Creatively structuring deals with your CA that will entice clients and keep the yacht busy can make your yacht stand out to brokers and their clients.
Creative marketing really is at the heart of ensuring your yacht is well placed on the charter market. When the majority of charters are sold via digital media, excellent photography is an especially critical marketing tool. DeBuse calls excellent photography “the building block of marketing”.
The understandable desire to cut costs can actually result in making decisions that will affect your yacht’s charterability in the long run. Sophia Tutino of OceanStyle tells us about one of their owners who recently replaced an extremely experienced captain who had a top reputation with a less experienced, less expensive captain. But brokers all agree that a stellar captain and amazing crew can take a boat quickly to the top of the pile in the charter market.
As well as the importance of marketing, a topic on all charter brokers’ lips was shifting destination trends. The general consensus is that although there is a growing number of adventurous owners who want to go to more exciting destinations, the demand for charter off the beaten track is not quite there yet. The Med is still the place to be. But there is a lot of uncertainty surrounding the Med at the moment, especially with regards to tax issues in France, Croatia and Italy in particular. But most brokers don’t see the tax itself as a problem, simply the uncertainty of what will happen. “We might come to VAT-included rates,” ventures OceanStyle’s Caroline Boisson. “A bit more like everyday life, in fact. This might take a few years but not only will it be easier but VAT-included rates are psychologically easier for clients to accept.”
Looking forward, it seems unlikely we will see a return to the glory days of superyacht charter where it was possible to rely on a steady stream of bookings throughout the year to offset the cost of running your yacht. But with a healthy dose of realism, flexibility, an excellent crew and some imagination, it is still possible to make your yacht a charter success story.
For the full story and more quotes and advice from brokers on this topic, see the article in Issue 8 of The Supeyacht Owner. Members can click here to read it online.
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