Putting boat in 2nd Tier Charter service

[soares29]

I’m not sure if anyone make $ in the boat business.... sure there is lots of passion. Sometimes I believe everyone looses $ in this business. But sure it’s important and needed!!!

[belizesailor]

This question has been discussed from many different directions over many years here...usually started by someone who fantasizes that they are going to make money on a boat.

Ive been around the charter industry since 1994. Boat owners do not make a profit in the end. Likely best case outcome is that charter revenue will defray cost of ownership. Anything that looks like short term profit on paper will likely be consumed very soon by the next round of unexpected boat expenses....and ultimately by loss of market value of the boat over time (unlike real investments...boats do not have appreaciation potential)

If you are USA, and maybe other tax venues too, you can put the boat on a depreciation schedule...this is often the biggest financial benefit to having a boat in charter.

[Bullshooter]

Maybe you could contact Captain's Compass in Tortola and see what kind of deal he would offer. We rented an older Beneteau from him last year. It was a 2003. It looks like he is down to 3 boats now.

[hellosailor]

"What would a typical charter utilization be in"
A lot can depend on the charter management company, how effectively they market, book, turn around, maintain the boats. Take a business trip, go interview the ones you are interested in. Ask to see numbers. See if you can look at their fleet and chat up some customers while you are there.

But if chartering of ANY sort were a sure thing? The charter companies would just borrow money from the banks, instead of all these pesky boat owners. The fact that the banks will not lend money for this venture, says something about the risk and profits involved.

If you don't have an accountant, go out and look for a CPA or tax accountant. Bring your financials, spend an hour (expect to pay) and ask a pro whether there's any advantage in this for you. A lot will depend on your tax situation. If you do have an accountant...you're more likely to find a rabbit in this hat.

[jcb47769]

Hi, I'm a delivery skipper and I just wanted to post my 2 cents here. The boat will be basically destroyed after a few years of charter, particularly if you are looking at bareboat instead of crewed charter. The basic problem is that boats that are in the price range to be practical for charter are not built well enough to withstand the heavy abuse that constant charters inflict on a boat. If you beat up a Beneteau for 3 years, it breaks, simple as that. Many people make the jump and buy a boat to put into charter, but I have yet to hear from someone who is happy with the arrangement after the boat comes out the other side. I'm sure you will get a lot of opinions about this here, and my experience is entirely from working on the boats in charter and delivering them home after, I can't help you on the financial side. Fair winds.

[contrail]

I run an independently owned captain only or crewed charterboat in the BVI. I live here and am pretty familiar with what goes on, but I am pretty much focused on the catamaran side of things, so don't know the statistics for monohulls.

Without, in any way, being negative about any of the other companies, either first, second or even third tier, I will tell you that BVI Yacht charters does a good job. The boats come out of charter in better shape than they went in, and they more than pay for all their expenses. I have had three good friends go this route, one of whom I recommended. All were very happy.

These were cats. They got 70% of the charter revenue, and paid all expenses. 70% goes a long way, as long as the company is honest about what it does. From what I know, this one is. None of my friends had to pay a penny during the time in charter. I don't know the size of any of their mortgages, or even if they had them.

The industry will be fully back at the end of next season. In the meantime, some boats are doing very well, some less so.

I am not connected with or paid by BVI Yacht Charters. I just happen to know the operation, the operators, and several folks who placed boats with them.

[bluebox3000]

Salingworld has some interesting analysis on the Charter Market.

https://www.sailingworld.com/sites/s..._2015_data.pdf

In 2015 there were about 2800 bareboats in charter and chartered on average for 10 weeks each for about $4,000 per week. This includes all boats, wherever in the world, but the largest concentration is in the Caribbean.

We know the typical 1st tier contract is 5-7 year so that means hundreds of boats are entering or exiting charter in any given year and have been for years.

But it is also clear SunSail and Moorings need to get more than 10 weeks a year to cover the cost of guaranteed income on new boats they have in charter. So someone else needs to get less.
I would think one would need somewhere between 15 and 20 weeks to make this make sense...

[contrail]

Originally Posted by bluebox3000

Salingworld has some interesting analysis on the Charter Market.

https://www.sailingworld.com/sites/s..._2015_data.pdf

In 2015 there were about 2800 bareboats in charter and chartered on average for 10 weeks each for about $4,000 per week. This includes all boats, wherever in the world, but the largest concentration is in the Caribbean.

We know the typical 1st tier contract is 5-7 year so that means hundreds of boats are entering or exiting charter in any given year and have been for years.

But it is also clear SunSail and Moorings need to get more than 10 weeks a year to cover the cost of guaranteed income on new boats they have in charter. So someone else needs to get less.
I would think one would need somewhere between 15 and 20 weeks to make this make sense...

Much depends upon the location. Small local charter operators in the US will typicallly have a varied fleet of various ages. They may be highly seasonal, and whatever they bring in helps defray expenses. Typically, they are chartered by the day or weekend.

In tropical areas, boats are usually newer, usually much more frequently used, and, depending upon the company, either thoroughly maintained or not. They are usually much larger boats, as well. For this reason, I think that generalizations are not very useful.

If you look at prices in the BVI, you will see that the charter companies with bases in multiple countries, charge the most for their BVI based boats. The market is better. Other places, it's the reverse. As for the BVI, pre-Irma, the charter fleet, bareboat and crewed, was about 900 boats. And, on average they do way more than 10 weeks and make more than $4000. They are used harder, but there is more money available for maintenance. If they were in bad shape, the BVI charter industry would not be so popular. It's highly competitive.

Some are built way better and stronger than average, and some are not. Again, generalizations are not particularly relevant.

[sisterblysse]

Hello fellow cruisers
I have a boat in charter in Tortola which will be coming to the end of the yacht management contract in 2021. She is a Jeanneau Sun Odyssey 389 and the plan is to sail her away eventually. Not quite ready to cut dock lines permanently yet, so want to put her into a 2nd tier company in the BVI's for a few years.
Have done a deep dive search of a number of different forums - here included- but can't see the information I am after. I am not interested in making money or tax benefits- I just want dockage, maintenance and insurance costs covered, and access to my boat for 4-6 weeks a year.
Does anyone know which Second Tier companies still exist in the BVIs that could offer the sort of deal I am after? Pointers gratefully received.

Fair winds and following seas.

[GordMay]

Greetings and welcome aboard the CF, sisterblysse.
Second Tier companies, in the BVI, include Conch charters, BVI Yacht Charters, TMM and others.
In St Vincent, Windward Islands, Barefoot Yacht Charters, and in the USVI CYOA.

[sisterblysse]

Originally Posted by GordMay

Greetings and welcome aboard the CF, sisterblysse.
Second Tier companies, in the BVI, include Conch charters, BVI Yacht Charters, TMM and others.
In St Vincent, Windward Islands, Barefoot Yacht Charters, and in the USVI CYOA.

Thank you Gord

[belizesailor]

Which company is the boat in charter with now? Several of the larger 1st tier companies have 2cnd tier companies or partners.

[sisterblysse]

Originally Posted by belizesailor

Which company is the boat in charter with now? Several of the larger 1st tier companies have 2cnd tier companies or partners.

She is with Sunsail but from what I can see Footloose, their partner, only do catamarans...

[slug]

Charter agent takes 25 percent , add in dockage , maintenance , insurance , depreciation .....

[belizesailor]

Originally Posted by sisterblysse

She is with Sunsail but from what I can see Footloose, their partner, only do catamarans...

Moorings/Sunsail I believe have several second tier relationships, no harm in asking.