Hope and the new normal
Ocean Independence’s Toby Maclaurin discusses the light at the of the tunnel…and it’s not an oncoming train…
“If you had asked me at the beginning of last week whether or not we would soon be receiving the deposit for a superyacht purchase, I would have said ‘no’ – but we have,” starts Maclaurin. “And, if you asked me on Friday if we would have been drafting a letter of intent on Monday morning for €10million, I would have thought you were being daft. And yet, that is precisely what I was doing with one of our brokers this morning. There is light at the end of the tunnel and, thankfully, it is not an oncoming train.”
It is welcome in these uncertain times to hear of superyacht businesses surpassing their own expectations. Maclaurin, however, is philosophical about the reality of the situation. As welcome as these two pieces of good news are, there are lean times ahead for the market, especially where it concerns the 2020 Mediterranean season.
“Everybody reacts differently to adversity and I must say that the vast majority of our customers have been incredibly supportive. Many understand that our industry is going to suffer as a result of the COVID-19 pandemic. It is true that many of them have paused in their commitment to sign charter agreements, but these same individuals have made clear their intentions to charter once the dust has settled,” continues Maclaurin. “There are, of course, others who have already signed charter agreements that are quite rightly concerned about the status of their trips and their ability to receive their funds back, but it is hard to advise with much certainty at the moment for most, other than wait and see what the situation is closer to the charter start date. Nevertheless, we are working hard to find resolutions for all.”
According to Maclaurin, Ocean Independence is operating on what he refers to as an “open-ended postponement”, through which, he explains, many guests have entered discussion about postponing their charters until a more convenient time of the year. By way of example, Maclaurin explains that most charters booked for the 2020 Monaco Grand Prix, have simply been deferred until 2021 by way of an addendum to the agreement. Other guests, particularly those who had trips booked in late May or early June, have agreed to autumn charters.
“So far we have not come across a problem that we haven’t been able to solve through good open discussions between the charterer, the owner and ourselves,” explains Maclaurin. “As the season gets close these discussions are going to become a little more earnest and I have no doubt there will be additional pressure, but so far nobody has taken the legal route. Even so, there are of course some parties whose primary concern is the return of their funds.
“When it comes to charter, really what we are doing is facilitating people with enjoying their holidays. While times are uncertain, isolation has by no means diminished peoples’ appetite for travel and I expect that as we settle into this new normal, people will still be eager to charter when they are able to. As such, the open-ended postponement model is working for most.”
For those who have already booked charters, the best possible route appears to be open dialogue with the various stakeholders, with a mind to finding a solution that suits all those involved. However, for those who have yet to book charters, MYBA has now implemented amendments to its charter agreements for those trips that may be affected by COVID-19.
“Our initial thoughts were to produce an addendum whereby it would be mutually agreed that, if a charter was affected by COVID-19, either to the charterer or the owner, there would be a mechanism within the contract to either change the location of the trip, change the dates of the trip, or both. If none of these solutions were viable to either the guests or the owner, then either part would be able to cancel without incurring a penalty,” explains Maclaurin. “We have signed some charters under this agreement, not as many as we would have liked, but we expect the mechanism to become more popular once potential guests have seen to safety and security of their families, friends and businesses, which must remain the priority at this time.”
It is undeniable that the 2020 charter season in the Mediterranean is going to be hugely affected by the COVID-19 pandemic. However, through these times of isolation, the charter market has important part to play in ensuring that clients are aware that there is light at the end of the tunnel and plenty to look forward to on the horizon.
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