Yachts & Covid 19 -
What is forecast for the Charter Industry?
The marvellous world of luxury yachts may seem impervious to most crises, but this worldwide pandemic, along with Brexit tax implications and bureaucracy, has seemingly created a perfect storm for the charter yacht industry.
You currently will find almost all charter companies and brokers releasing puff pieces desperately extolling the virtues of their super yachts. Advertorials in glossy magazines that previously wrote about the traditional luxury holiday charter, now encourage their guests to take “the ultimate self-isolation vacation”.
In reality, many charter yachts are currently dead in the water. One private owner of a super-yacht confided that last year their charters earned them a considerable sum, but this year that figure was zero. A long-serving captain of a charter yacht that had 5 valuable bookings for August & September cruises in the Mediterranean was forced to allow 3 of these to be postponed until next year, with the the remaining bookings cancelled.
The impact of the sudden disappearance of charter guests is underlined by a new clause appearing in many charter contracts - a “Covid” clause that allows either party to cancel with 24 hours notice and receive a full refund. This is unprecedented, ordinarily only “force majeure” would excuse a cancellation, highlighting just how desperate the industry is to attract guests in these uncertain times.
Those of us who like to drive a hard bargain might be hoping to take advantage and drive down the price of a charter, but industry insiders feel that this option is unlikely. Yacht owners are not only incurring increased costs due to extra sanitation requirements and regular crew Covid tests but they will not wish to undersell their product and it is thought that most will hold the line in terms of pricing.
One of the best ways to knock a sizeable sum off the cost of a charter is to sidestep the charter broker and make an arrangement direct with the owner.
As an owner, you might wish to make your charter more appealing to guests without losing out financially- saving a portion of the yacht broker fees might be the answer. Please contact Franklin for further information about either of these options.
On the bright side, the enforced isolation period has given a number of individuals time to ponder, resulting in an uptick of new yachts purchased, and orders for new builds going out to tender.
Some boat builders now have the chance to show off new technology with state-of-the-art clean air ventilation systems and other Covid-friendly innovations.
The industry has weathered several depressions in the past, and it likely to do so now.
Most industry heavy-weights are now looking ahead to the 2021 season, banking on a pent-up urge for freedom sharpening the focus on the pleasures of boating.
Indeed, if Covid is here to stay, private yacht charter may turn out to be the way to holiday - safely self-isolated in a floating bubble of your very own!
For further information about anything to do with chartering, owning, crewing or managing a luxury yacht, please contact Franklin for a free, no-obligation consultation.