The early bird
How the pandemic has changed charter usage and heralded an owner’s market…
Even in the years before the pandemic, charter professionals would speak regularly about the benefits of booking charters early. With the Mediterranean almost at capacity for the foreseeable future, their advice has never been quite so salient. However, with demand at a high and marina usage at a low, is this period likely to change how guests approach superyacht charters in the future?
“At the moment the West Mediterranean is as full as the East Mediterranean was and it has been for the last month or so. Those clients that waited until the last minute to try and find something have been struggling to find anything. It’s great because those clients that were organised, which is typically the Americans, got their act together early and guaranteed themselves a charter,” starts David Price, a member of Y.CO’s charter management team. “Of course, clients from the US have been able to travel to the EU for longer than most others and so they could be more organised. Uncertainty over travel, however, such as the British traffic light system, has definitely hurt certain client pools.”
While uncertainty over travel restrictions and quarantine requirements have curtailed the willingness of certain demographics and geographies of clients to book charters, many, according to Price, have been more than happy to quarantine on their return from a charter. Indeed, after a year and a half of various lockdown measures, quarantine requirements and isolation, for some the prospect of another 10 days or two weeks in what we can assume is rather nice accommodation, is not daunting in the least. That being said, the thought of government-controlled quarantine locations would most likely be enough to put off even the most determined charter guests.
With concerns over the transmission of COVID still at the back of many peoples’ minds, vaccinated or not, some guests have adapted how they are using their charters to place a greater focus on anchorages and privacy.
“This has absolutely been the case. Obviously, there are clients who still like to come ashore, but even during the Cannes Film Festival, the port wasn’t full, which is unheard of,” continues Price. “There is a lot of boats at anchor, even with the anchoring restrictions in France that were imposed last year to protect the seagrass. A lot of people are more inclined to be at anchor and just do the tender run.”
Could the fears over the pandemic, that have caused guests to amend their superyacht usage models, potentially benefit the market in the long run? For many years, the superyacht industry has been trying to encourage owners and guests alike to make the most of the superyacht experience, whether that involves visiting new locations or using the full suite of toys and activities available on board. While there has traditionally been an issue with noise when at anchor, advances in technology including insulation, zero-speed stabilisers and hybrid propulsion systems have made being at anchor for prolonged periods a more enticing option.
“All these advances are helping the fact that it is ok to be at anchor. Plus, while yachts are always facing the wind when they are at anchor, crew have become incredibly adept at deflecting the wind so guests avoid its acceleration coming down the side deck,” explains Price. “People will definitely be coming back to port when the world returns to normality, but I am not sure if it will be as much as before. I think we could see more boats at anchor. When you think about the anchoring restrictions, for the bigger yachts it really hasn’t made that much difference. Some captains, even though they can go closer to shore, choose not to because of safety and security.”
With capacity in 2021 diminished by the number of postponements from 2020 and with owners choosing to spend longer periods on board owing to their inability to do so last year and their lack of options for holidays worldwide, the superyacht charter market has become incredibly competitive. So much so in fact that Price does not discount the potential for charter prices to increase as competition for the final spots reaches fever pitch.
“We don’t have any boats that have been discounted or had any real offers put on them, we simply haven’t had to do that with our fleet this year. I think at the moment it is more of an owner’s market, they can be firm on their rates and, from what I’ve seen, some of them are thinking of increasing the price because the demand is so high. That being said, it may be difficult to do. It is easy to decrease rates, but it is far harder to justify increasing a charter rate if the yacht hasn’t fundamentally changed. Either way, the days of clients thinking that they can get a 20, 30, 40 per cent discounts are over,” concludes Price.
With the superyacht market experiencing a boom in activity in 2021 and guests fundamentally changing how they use the superyachts, it will be interesting to see if these trends continue in the future or whether the market will revert to type once the spectre of the pandemic is no longer present.
Click here to become part of The Superyacht Group community, and join us in our mission to make this industry accessible to all, and prosperous for the long-term. We are offering access to the superyacht industry’s most comprehensive and longstanding archive of business-critical information, as well as a comprehensive, real-time superyacht fleet database, for just £10 per month, because we are One Industry with One Mission. Sign up here.