Putting your boat into a charter program
Oct 11, 2018
Recently, OnBoard contacted the sales team at Aviso Yacht Sales in Nanaimo to get their thoughts on putting a boat into a yacht charter program. They suggested that we contact Ian McPherson.
Ian MacPherson, President of the Association of Bareboat Charters and Sailing Schools in BC. He has been in the charter business since 1974. Firstly, in the Caribbean, then the Med, before settling in the most beautiful cruising grounds in the world around Vancouver Island and British Columbia’s West Coast.
Ian offered up the following information, when you are considering to put your yacht under the management of a charter fleet operator.
Putting your boat into charter as an option:
This option is very popular with owners that live out of town and cannot keep an eye on their vessel and for owners that have limited time in which to enjoy their vessel every year. Nothing is worse than arriving at the dock to find a dirty vessel covered in bird dropping and lying in a derelict state with flat batteries effectively robbing the owner (and his family) of their precious cruising time struggling to get his boat ready to use.
Nothing deteriorates quicker than a yacht that is not working.
Ownership costs:
What the charter option strives to do is to ensure that that all expenses are covered by income earned from charter weeks, effectively giving the owner a yacht free of costs. The major cost of ownership other than annual maintenance is moorage and insurance.
The cost of mooring a yacht at a reputable marina depends on the size of the yacht and where the vessel is being berthed. The average annual cost for a typical 40-foot yacht with a 14 ft beam in BC is approximately $6500 per annum. The insurance cost on average is 1.4% of the value of the vessel.
Maintenance varies considerably from boat to boat. Upkeep on a power vessel (twin engines = double costs) is usually higher and if the vessel is older than five years you can expect to have higher maintenance costs. Realistically annual maintenance costs run between1-1,5% of the purchase price.
Some companies offer a reduced labour rate for maintenance on any vessel whilst in charter, which further helps to keep the expenses in control.
Ownership revenue:
Most charter companies like to have a guaranteed six weeks of high season use in which to offer the boat for charter. This generally covers all operating costs.
If the boat charters for more than this period, not only will it cover costs, the owner will enjoy some additional revenue.
The average split between the owner and the charter company is 60 % to the owner 40% to the charter company. Some companies will give as high as 75% on a brand new yacht that is very sought after.
Other than the essential six weeks of high season use, generally charter companies allow the owner to sail the yacht as often as he/she likes.
The charter company’s commitments to the owner
• To maintain the vessel in pristine charter condition at all times
• To minimize costs by sourcing the best pricing on parts etc
• To produce an operating manual for all systems on board the vessel
• To promote the vessel for charter through the company’s website, by attending the relevant boat shows and via brochures and other promotional material.
• To prepare and check out the vessel for each charter
• To meet, greet and brief each charterer
• To debrief the charterer after each charter
• To inspect the boat above and below the water after each charter.
The charterer:
Of greatest concern to the owner is the qualification of the person wishing to charter his/her vessel.
All the reputable charter companies in BC have a stringent vetting process.
• This involves filling out an extensive sailing resume which must show the potential charterer to be fully qualified to take the vessel.
(The industry minimum qualification to a new charterer is the International Yacht Training (IYT) Certificate of competence which is the equivalent of the Coastal Skipper advanced ticket acquired locally.)
• Most companies have a thorough yacht briefing prior to departure which goes a long way to ensure that the charterer fully understands all the systems aboard
• This is followed by a detailed area brief will provide an indepth orientation of our sailing area.
• A thorough debrief is done by the charter company on return to the base. This includes diving or lifting the boat after every charter.
In addition, a security deposit is retained at the base to cover the insurance deductible, should there be any costs to be borne by the charterer.
If you’d like to talk direct to Ian about putting your boat into a charter program you can reach out to him at the Nanaimo Yacht Charters and Sailing School.
