Last week the owner of the Helia 44 in charter was sharing some details on how the 2018 charter season was meeting his contractual expectations. An interesting, first impression and review of a positive working relationship between an owner and a charter company.
The question was raised what “unexpected, not-so-obvious” expenses can impact on your annual revenue, depending on your contract:
Generally, we don’t know all the specific fees and charges we will be hit with when we sign on the dotted line for boat commitment. You can ask your broker but even the best of them probably don’t know specific fees either.
Each charter company, each charter program within a charter company and each charter base charges things differently. Most of the time you will see the charges when they show up on your quarterly statement from the charter agency and you wonder why you haven’t thought about asking these questions earlier. None of these question are in my opinion deal-breakers but nice to have the answers to, in order to ‘close the deal’ with your eyes wide open
1. Run through all the routine fees and expenses:
a. Turn around fees
b. Boat cleaning fees
c. Owner use fees
d. Dockage
e. Boat watching / security
f. Dock utilities
g. Routine haul out cleaning and painting
h. Hurricane season mitigation fees
2. Annual Insurance Premiums:
a. How much are you responsible for (deductible) if someone else damages the boat
b. Can a charter customer “buy their way out” of any responsibility that then gets passed to the owner?
c. Full value of the boat covered
d. Liability limits
3. Repairs and Maintenance:
a. Routine oil changes
b. How they handle repairs and parts by 3rd party service companies
c. Definition of ‘routine wear, tear’ and repairs?
4. Cost to deliver boat to another base
5. How does the charter company manage charter fee’s
a. If your boat has a problem and is unable to go out on a charter and the charter company has to get a replacement boat?
b. How much charter fee do you get if your boat is selected at the last moment as a replacement for someone else?
If you have any further costs or expenses you came a cross which you didn’t consider beforehand, please share them with us and leave a comment so I can add to the list.
Hi Nils,
I’m considering entering a charter management program with Dream Yacht Charter and a have a few questions that I hope you may be able to answer.
1. Resell value at the end of the program.
I’m trying to figure out at what price I can expect to sell the yacht at after 5 years. I’ve heard/read very differing estimates, ranging from 50% to 65% of the original yacht price. Do you happen to have more precise insights on this, or how I can narrow the expected resell price range?
2. Sales process.
If I decide to sell the boat myself I imagine the process to be quite challenging: I would need to fly to Croatia to show the boat to interested parties, while at the same time paying for ordinary maintenance, insurance, holding costs, etc. What are your thoughts on the sales process?
3. Base manager and staff.
The base manager manager and staff will play a major role in how the yacht is serviced and maintained. I know from experience that quality of maintenance varies importantly among bases. Do you know how I could assess in advance how professional is the staff of the base where my yacht will be stationed?
Thanks for your help!