Experience with Charter boat Phase Out?

[The Traveler]

Hello Cruising community,

I am interested in hearing from anyone who's purchased a boat out of a charter program, or who owned a boat in a charter program and experienced the phase out process.

I'm not looking for opinions on charter boat ownership. That's another discussion.

We have chartered twice, both with the same company, out of the same base, so our experience is obviously limited. The first boat was an older boat and was owned by the charter company so it's condition probably didn't represent how well they maintained privately owned boats. Our second boat was only a few years old. All the systems mostly worked well but there were some pretty major issues that I can't imagine could ever be satisfactorily repaired without major, expensive, work. There was also minor things like all the dividers in the galley cabinets were missing and the shower door separating it from the head was missing. Unless these were removed and put in storage for the owners, which I doubt, I have to assume these were broken.

I'd love to know how the companies are able to bring these boats back to a reasonable condition? The whole success of these programs hinges on the condition of the boat upon exiting the program. Does anyone have personal experience with this? Do the companies truly do whatever it takes to return the boats to a reasonable wear and tear condition?

[Auklet]

Hi,

Your questions are good, but asking only for input from the principals of charter boats may limit information coming your way. Several of us have had much experience with sailboat chartering so know something about what you ask. If you own a boat that you put into charter YOU, the owner, will have the greater responsibility for keeping up the boat in good repair ($$), and for making the payments on it. Insurance will not cover basic wear and tear on the charter boats any more than it would on your boat not in charter. Company maintenance might fix a leaky toilet but likely will not replace or upgrade it unless the OWNER pays for it, etc. If a boat comes out of charter in poor condition it’s because the owner has not put the money back into the boat lost through its depreciation from charter use. If the charter company itself owns the boat it will likely retire (sell) it after five years of service. Basically, it can get five years of service out of a new boat without putting much money into repairs. If you buy one of those boats you can probably expect 8 to 10 years worth of depreciation from wear on a five year old boat relative to single owner use. Because, the boat is used more and by folks who only get on, then get off, so there is no TLC. The business plan of charter companies from what I have seen is to suck as much money out of the asset and the use of it as it can stand, then sell it; not fix it, etc. That’s why they are usually highly discounted when up for sale.

[SailingHarmonie]

Originally Posted by Auklet

Hi,

Your questions are good, but asking only for input from the principals of charter boats may limit information coming your way. Several of us have had much experience with sailboat chartering so know something about what you ask. If you own a boat that you put into charter YOU, the owner, will have the greater responsibility for keeping up the boat in good repair ($$), and for making the payments on it. Insurance will not cover basic wear and tear on the charter boats any more than it would on your boat not in charter. Company maintenance might fix a leaky toilet but likely will not replace or upgrade it unless the OWNER pays for it, etc. If a boat comes out of charter in poor condition it’s because the owner has not put the money back into the boat lost through its depreciation from charter use. If the charter company itself owns the boat it will likely retire (sell) it after five years of service. Basically, it can get five years of service out of a new boat without putting much money into repairs. If you buy one of those boats you can probably expect 8 to 10 years worth of depreciation from wear on a five year old boat relative to single owner use. Because, the boat is used more and by folks who only get on, then get off, so there is no TLC. The business plan of charter companies from what I have seen is to suck as much money out of the asset and the use of it as it can stand, then sell it; not fix it, etc. That’s why they are usually highly discounted when up for sale.

I don't know where you get your information about how the charter business works, but having been a charter base service manager, I don't recall EVER giving the owners a choice in maintenance expenses.

If something broke, we fixed it as soon as possible, and the owner was sent a bill. The owner never had the option of letting a system go out week after week without a needed repair because the owner was a cheapskate. Our charter customers would not tolerate that, and neither would we.

One of the challenges, is the "as soon as possible" part. If you are in a remote place, getting parts can be slow. But even in major yachting centers, please pity the poor service department. A boat comes in on Friday afternoon, and has to be turned around and ready to go on 24 hours later. If a repair project takes more than a few hours, you have to schedule the boat for down time, which might take it out of paid charter for a week, and NOBODY is going to be happy with that.

[Auklet]

Originally Posted by SailingHarmonie

I don't know where you get your information about how the charter business works, but having been a charter base service manager, I don't recall EVER giving the owners a choice in maintenance expenses.

If something broke, we fixed it as soon as possible, and the owner was sent a bill. The owner never had the option of letting a system go out week after week without a needed repair because the owner was a cheapskate. Our charter customers would not tolerate that, and neither would we.

One of the challenges, is the "as soon as possible" part. If you are in a remote place, getting parts can be slow. But even in major yachting centers, please pity the poor service department. A boat comes in on Friday afternoon, and has to be turned around and ready to go on 24 hours later. If a repair project takes more than a few hours, you have to schedule the boat for down time, which might take it out of paid charter for a week, and NOBODY is going to be happy with that.

I think my main point is that the owner pays if it is fixed. I get my information from observation, repeated contact with charter operations (east coast, west coast, Caribbean, among others) since 1990, membership in charter boat “clubs”, and surmise. I’ve chartered several boats that had broken, not working, etc., stuff aboard. I could go down the recall list. Once, the boat they were going to give us did not have a working depth sounder. We declined it and they got us another. I doubt you are saying the owner must replace/install the depth finder w/o consultation if needed? Company knew it did not work; why had it not been repaired for us? On a fleet cruise of chartered boats one of ours started taking on water an hour out and had to return to dock. Company could not fix in a few hours. Company found another boat but we lost one overnight at anchor in a 7-day charter. Another, we had a toilet that leaked the whole time; macerator not working as it should, etc. One with a diesel that burned oil excessively but no spare motor oil aboard. I was astonished to find out that many fuel docks do not stock motor oil!! Had to contact the company to bring some out.

[Auklet]

Originally Posted by Auklet

Once, the boat they were going to give us did not have a working depth sounder. We declined it and they got us another.

I recall this a little better now. For the 34-ft boat we had contracted (and paid in advance) the depth finder was not working when we arrived to board. I protested b/c we intended nightly anchoring; i.e., not a marina to marina cruise. Company said it could up-grade us to a 38 ft but the GPS/nav system on that boat was not working. Our choice. We took the 38-ft and used our chart and binoculars to navigate inland waters (Salish Sea). We did not have a lead line ready to go!

[The Traveler]

SailingHarmonie,

The quick turnaround would make it incredibly tough to do the repairs. Our last boat was returned at 0900 and they turned it around for us by 1400. But, as you wrote, they have to keep up on maintenance or the charter customers wouldn't rent the boats.

The kind of program that might work for my wife and I is the guaranteed income program with one of the large companies. Did your company have a similar program where you brought the boat up to a reasonable condition after the charter term was up?

It's not really fair for me to base the condition of the boat after phase out based on how it looks during the charter period. That's the whole point of the phase out is to repair what was damaged during the 5 years of chartering.

Curious if anyone has first hand experience on getting the necessary repairs after the charter term.

[CarlF]

The major companies like The Moorings will get things like missing shower doors replaced during phase out but you still have a boat that’s had the same amount of use that a private owner might do in 10-15 years. Like any older used boat purchase there will be many things that pass survey but are near the end of their useful life. Rigging, engine, dinghy, sails, cushions, electronics, galley, heads will likely need replacement/refurbishment/upgrades. As long as you budget the $50k-$100k this will require, an ex-charter boat can be a great purchase.

[The Traveler]

Originally Posted by Auklet

Hi,

Several of us have had much experience with sailboat chartering so know something about what you ask.

I'm already somewhat familiar with the condition of boats currently in the charter program, at least with one specific base and company. I'm looking for information from people who've received the boat after the phase out process. Contract specifics vary from company to company but essentially, they must bring the boat back up to a condition of reasonable wear and tear. I'm curious if this is bubble gum and duct tape types of repairs or if they actually bring them up to reasonable condition.

We likely wouldn't keep the boat. None of the offerings are models that we would want to keep and sail ourselves, so the boat would have to be in a sellable condition.

[Auklet]

Originally Posted by The Traveler

I'm already somewhat familiar with the condition of boats currently in the charter program, at least with one specific base and company. I'm looking for information from people who've received the boat after the phase out process. Contract specifics vary from company to company but essentially, they must bring the boat back up to a condition of reasonable wear and tear. I'm curious if this is bubble gum and duct tape types of repairs or if they actually bring them up to reasonable condition.

We likely wouldn't keep the boat. None of the offerings are models that we would want to keep and sail ourselves, so the boat would have to be in a sellable condition.

Too bad they don’t use categories with definitions of the survey/insurance world, such as “good” condition, or “above average.” What’s reasonable wear and tear? Hard to assess if without definition. So, we probably don’t know what the condition of “reasonable” wear and tear actually turns out to be. Might be only “fair” overall condition, etc. Charter companies would not ditch boats put new into charter service after only 5 years if still in good condition, in my estimation. So reasonable wear and tear here means “fair” or “poor” condition, likely.

[George_SD]

It depends on the company. I've bought a car from a rental place - was a great purchase, low miles, like new.

Also bought a boat that originally was purchased by a local US sailing charter/school. I was the second private owner, so didn't get it directly from the charter. It was in good condition overall, but i can tell you they didn't replace things that would have been nice to replace prior to taking possession of it (throughulls, lines, sails, etc). All the major equipment and items worked and it was in good mechanical condition, passed survey, but a few areas had cosmetic issues for obvious reasons. Although after I took possession and did some minor work on it, no one would know it was in a charter.

Electronics worked
Cushions were fine
Sails were original and a bit dirty, but usable
Anchor was OK, chain was rusted badly
Head/shower didn't show much use
Stove didn't show much use
Galley sink showed signs of use
Births had some scratches on paneling, but nothing unusual
Engine was in good working order
Lines were original and some needed to be replaced
Needed a good cleaning

Having this experience, I would do it again with the same expectations that it would pass a survey, be insurable, was not abused, but well taken care of.

[Auklet]

Yeah, one should be able to take a boat in “fair” condition and turn it into “good” condition with $$$ and plenty of TLC. Cosmetic refurbishments would be a part of that. Also, charter companies I’ve used require customers to pump out before returning the boat or else be charged. This probably goes far in preventing the boat from acquiring the offensive head odor common in privately owned boats of same age; although I doubt the charterers do a thorough job of it. But if the odor is there the sanitation hoses would need to be replaced. (Don’t accept a comment/explanation that it is “normal.” It might be widespread, but it’s not normal b/c it’s preventable with proper maintenance of the sanitation system.) It’s “reasonable” to expect original sails to be dirty and worn but probably not reasonable to see a “badly rusted” anchor chain. Worn lines and ropes are expected. Probably do not know the actual condition of the engine w/o a separate engine survey. I doubt thru-hulls would be replaced in a phase out unless obviously broken. Survey would call for it if needed, I suspect.

[Auklet]

Originally Posted by CarlF

… there will be many things that pass survey but are near the end of their useful life. Rigging, engine, dinghy, sails, cushions, electronics, galley, heads will likely need replacement/refurbishment/upgrades.

This would be consistent with the definition of a boat in “fair” condition at best, I believe.