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Disturbing Trends in the Charter Market
jcam
Posted: Tuesday, April 21, 2009 7:00 PM
Joined: 15/08/2008
Posts: 11


There have been a series of articles recently in Dockwalk which are pointing to a disturbing trend, particularly in the field of chartering. 

 

A couple of months ago, there was an article in which various industry spokespeople have set the tone that crew should begin to expect smaller gratuities and a suggestion that they should be capped at 5%.  This is a slippery slope to tread on, as a friend recently pointed out, for when the economy does come back, and if this precedent has been set, the days of 12-18% tips could truly be gone forever.

 

Then, in this months Dockwalk, brokers go on to suggest that in order to make one’s yacht more marketable, they should, amongst some other good suggestions;

1.  Send “Thank You” notes and gifts to brokers upon successful completion of a charter,

2.  Send brokers out on “mini charters…..at the yachts expense”,

3.  Give brokers feedback on where charter clients may want to cruise in the future (which seemed to imply crew doing the brokers job for them, at least that’s what I took from it).

 

So let me get this straight; the brokerage industry would like to cap crew tips, and get thank you cards, gifts and free boat rides, and a report back a small bio on the likes and dislikes of clients?  

 

It sounds as though this is what it will take for brokers to promote your yacht.  At the risk of rustling a few feathers, I honestly have to ask; where is the line drawn between “marketing” and “kickback”?  I don’t feel the need to argue these afore mentioned points any further, as any captain or crew who’s been in this industry will have already raised their red flags for the fundamental reasons these “marketing” suggestions deserve closer scrutiny.  

 

Instead, I’d like to point out a couple of reasons why I believe we’ve arrived at this point, and what can be done about it.  I captained a charter yacht myself for a number of years, and came to the following realization; the process of chartering a yacht has not changed since the advent of the telephone.  Brokers (and corresponding organizations) have become so powerful over crew and even yacht owners because there is no other viable option except their 80/20 business model.  (80% of revenues to the owner, 20% of revenues to the brokers.) 

 

The answer lays in the internet and new media communication applications.  I’m not just talking about a pretty website, but one that provides a more productive and efficient platform to do business.  Pretty much every other industry has adjusted to this new reality, but yachting hasn’t.  Why?

 

Money.

 

I’ve been working on a concept for the past few years, and am in the initial phases of launching it.  It’s an online community designed for the owners, clients, and crew in the charter industry.  It’s not a brokerage, and there are no commissions charged. Instead, it works on a flat rate.  It can be used in conjunction with the current brokerage system, or on its own.  It is going to allow for owners to charter their yachts at more competitive rates while still retaining greater revenues, clients to review yachts based on the recommendations of other clients, and also allow for clients to have direct contact with captains (thereby alleviating that game of “telephone”).  Noticeably absent from the process; commissions and future contract clauses.  Additional unique benefits are available (to crew as well). 

 

Interestingly enough, the site has caught the eye of one major brokerage house recently.  It seems as though it was circulated in an inter-office email by the looks of the analytics report I received.  I found that to be a bit of a validation, but not the one I need.  Instead I would like to get feedback from you and your owners. 

 

I look forward to hearing from this community’s thoughts.  (Like the idea? Dislike it? Care to find out more? Should I invest in bullet-proof glass?)   Feel free to “friend” me on dockwalk, facebook, or you may contact me directly at james@bluewindow.com

 

Fair skies, and may everyone have a safe and productive summer.

 

Best Regards,

James Cameron


Anonymous
Posted: Wednesday, April 22, 2009 5:38 PM
I for one really hope that you have HUGE success with that idea and will certainly pass your information along to my owners. It is an idea I have heard them discuss before. I think there are a lot of owners and crew who feel like charter brokers have been bossing them around and then extorting money and favors in order to get charters for years. Sorry to those ethical brokers who do not do this, but you are outnumbered by the unscrupulous ones. Your plan would then allow those owners who appreciate their crew to give the 20% that would have gone to the broker to go to the crew as a service included fee which will still register as a 5%-25% discount to an experienced charterer. Or the owner could keep more of his/her own money. It's brilliant. And I think charter guests would agree. Also think that in the current economy if you could get that up and running quickly so owners could cut charter fees to stay competitive and still make the same money that you would have the type of success your idea deserves. Get busy.
Mike French
Posted: Wednesday, April 22, 2009 7:44 PM
Joined: 06/05/2008
Posts: 57


Great idea.  Yachting needs these sort of innovative business solutions.  For too long owner's choices seem to be limited by convention and not always good business sense.  This economy should teach us that there is always a way of doing things more cost efficiently.  Taking from the rich and giving to the poor is solely the preserve of Robin Hood though many yachting use this as their mantra. 

Very best of luck.



junior
Posted: Wednesday, April 22, 2009 11:37 PM
Joined: 14/01/2009
Posts: 1026


How does your Internet marketing tool benefit the customer ? I can see that you would like it to benefit the crew with more tips  from the customer. 
   The owner may receive more revenue because he has cut out a middle man  .  I hardly think the the owner is going to lower his price. In the end the  customer is going to pay the same.  I fail to see the revolution.  If I'm to pay the same for a charter, I might as well use the old reliable system.  A charter customer doesn't care about crew salaries  and doesn't care about the yacht owners finances.
  As a yacht captain, I look across the street and I see two charter brokers that have gone out of business this winter.  I believe that the charter broker sector will go into a phase of consolidation. The biggest will survive.  Its possible that a yacht owners association will form and negotiate  with these dominant brokers to change their fee structure.
    I just cant see any mass marketing Internet tool taking over the personal client broker interaction on 100,000 euro charters. No way.
   
  

Anonymous
Posted: Thursday, April 23, 2009 3:40 AM
I agree with Junior here. If you go to the site www.bluewindow.com it is nothing more than a skeleton. The business model has two prices for a charter, one for members, and one for non-members. Memberships is (if I recall accurately?) $7,000 a year. I couldn't find the numbers for how much is charged to the owner. So Joe Schmoe who loves to charter a lot can save money by belonging to this "club." Don't see this replacing a skilled charter broker with personal knowledge of the yachts and crew. There are so many variables that it's just not something that can be replaced by a digitized system such as this. A yacht charter isn't the same as buying a room at the Hyatt for the week. It's not feasible for the same reason that all the crewed yacht time-share deals have failed. It's just so personal and unique on both ends, the user (charter client) and the provider (crewed yacht). Lots of savvy business guys have tried to do it, they figured, hey, it works so well with fractional jet ownership, it should work with yachts. But it doesn't. You don't sleep, eat, poop, have sex, for a week or longer on your jet. The emotional connection is lacking on a jet.
Megla-Don
Posted: Thursday, April 23, 2009 2:13 PM
Joined: 21/04/2009
Posts: 2


 A lot will depend on James's ability to put together a sound business model. There are going to be clients who are willing to spend more to have the benefit of a representative (broker) and there are going to be people who would waive that benefit for a better cost value, especially if a yacht has been well reviewed by previous clients. I do think this business model will put a lot more pressure on the captain who will have to then field each inquiry personally, but I think it has a chance to work and give owners other options. Everyone thought that Priceline would fail, and not only did it not, but now there are spin offs of the concept like Travelocity, Expedia, Hotels.com. People are used to planning travel on line, and with the right business plan, I think there is a place for James's idea. I wouldn't want to be putting that plan together, but if it is done right it could be very successful....just look at Yacht Counsil.


jcam
Posted: Thursday, April 23, 2009 3:07 PM
Joined: 15/08/2008
Posts: 11


 

 

Thanks for your responses, and I’ll be happy to explain in further detail. (Answering two posts, so I apologize if this is a bit lengthy.)

 

The current “skeleton” (as stated earlier, I’m in the initial phases) is a foundation for a platform that will be a win/win to both owners and their clients.  In order to understand that, I’ll use three different example yachts, and give their price per week at a current industry average (in USD).  In all three cases, the charter client currently pays the prices listed below in blue for a one week charter in the current 80/20 system that is the norm, the owner’s revenue are in black.

 

Yacht A (80’ - $30,000 owner receiving $24,000)

Yacht B (130’- $100,000, owner receiving $80,000)  

Yacht C (185’- $225,000, owner receiving $180,000) 

 

For listing rates on Blue Window, and how much your owner may save, follow this link and click on “comparison calculator” on the top right side.  http://www.bluewindow.com/Main/ListingSchedule.aspx

 

I will continue to publish Blue Windows client prices in blue so you can do a quick comparison. (I sure hope this site supports color text)  

 

Should a client decide to become a paid member of bluewindow.com (one does not need to pay a membership to be able to charter, but to receive preferred pricing, it comes at a cost of $5,000 p/year) they would receive @10% off these retail charter prices (final price to be set by owner) So lets go with 10%.   

 

“Yacht A” would now cost $27,000 per week for the paid charter member.  Owner would receive that full $27,000 per week. ($3,000 is hardly a savings worth paying the $5,000 for unless the charterer was looking for multiple weeks)  However, the client would benefit from some other things. Inquiring about the availability of Yacht A with a broker may take anywhere from a few hours to possibly a few days.  On bluewindow.com the aim is to have clients instantly see the yachts availability.  Additionally, clients would be able to correspond directly with captains from the get-go (without signed contracts etc, etc).  I’m not sure if you see the value in that, but I know from experience that more clients wish they could communicate with crews before making a decision. If the client chose not to buy the membership, the owner would receive $30,000.  Clients would be able to see reviews on yachts based on other client experiences who have chartered the yacht.  That means getting reviews from someone who truly knows the crews and yachts, even more so than a broker. 

 

“Yacht B” would now cost $90,000 p/wk for the paid member.  All other benefits would apply.  The owner is now making $10,000 more p/wk, and the client paying $10,000 less per week.  That should be a reason to buy a membership.  If that’s not enough reason to buy a membership, the owner receives $100,000 vs. the $80,000 from traditional houses.

 

“Yacht C” would now cost $202,500 p/wk for the paid member vs. traditional brokerage cost of $225,000.  All other benefits apply. Owner is now making $202,500 with Blue Window vs. $180,000 with traditional houses. 

 

Now multiply all these numbers by 6-12 times per year. 

 

So as to one of your leading questions, no, the charter would not cost the same.  Both parties would win (except in the first case where it wouldn’t make sense to become a client, but the owner would gain greater revenue (no gain/win)).   

 

Anonymous, I agree that chartering a yacht is not the same as getting a room at the Hyatt.  Chartering is an extremely personal experience.  Good brokers will always have a job.  Unfortunately, not all brokers are good, and recent events have discredited even the most trusted names in business.  (Madoff, Lehman Bros, AIG, even a couple of names within our industry) The result of this has been an accelerated shift by consumers to look to their peers for recommendations.  Think about going to buy a used car.  Would you just walk on to the lot and trust the salesperson to get you in the right car, or would you do a little research with a publication such as consumer reports (which takes into account thousands of users experiences on a number of different aspects) first. 

 

As to the personal experience of brokers, most of the charters I got were from brokers that I and my crew had never met, or met for ten minutes at a brokerage show. 

 

As to the point on tips, I’m a pretty firm believer in the acronym that “tips” stands for;

 

To   Insure   Proper   Service 

 

I’ve had crew tell me that a gratuity should be written into the contract.  At one point, as a captain myself, I pushed my broker to do such a thing.  But I’ve revised my way of thinking.  Have you ever been to Monty’s on South Beach and had anywhere near decent service?   Gratuities are there are built in, the staff knows it, and consequently, most don’t seem to give a damn. I’m all for, and will push for, the identification and education of tips as being customary to clients, and to those customs being more clearly defined within contracts.  I’m not sure if any other captains have had this happen on their last day of charter, but a few times I would be asked what is normal to tip for a charter.  My answer (being on this side of the pond) was always the same.  “Think of it in terms of your favorite restaurant.  If the service was satisfactory, I would go with 10%, if it was beyond your expectations, you may consider 20%”.   My crew and I averaged 18%.

 

Crews most definitely earn gratuities, and those gratuities should not be capped as recent industry voices have suggested.  

 

Junior, I do think that your idea of an owner association bringing down the cost of services in not only a very valid one, but an excellent one.  If you stop to take the time to think about it, the net result to owners is what I’m doing (without the annoyance to owners as far as organizing). Not only that, but I can pretty much guarantee you that myself and other people in this industry (who have also been afforded great opportunities by these same owners to work in this incredible field) have many plans to bring the option of rational business practices and prices back to the people who got us here in the first place: the owners.

 

Finally, I've had a great response from people and look forward to putting some "meat" on the "skeleton".  This may not be for everyone, but isn't it good to have the option?


abouis
Posted: Friday, April 24, 2009 11:56 PM
Joined: 05/09/2008
Posts: 22


I have heard people say, why should the broker take 20% for pushing some paper and while the crew barely gets the same amount for busting their hump on charter all week???  To them I say, which broker brought you that charter?

I think some brokers do an excellent job of placing clients with crews and as a charter captain I appreciate that.  It makes it well worth it to have a good fit as it results in a better time for everyone involved (and usually better tips as well!).  I disagree with anyone who suggests an across the board reduction in tips because of the economy, that's just dumb. 

If you can afford to charter and you can afford to tip!


Chef Peter
Posted: Saturday, April 25, 2009 4:33 AM
Joined: 05/05/2008
Posts: 20


Start booking us then! We all need work? Question what are you doing proactively to get us work?


Anonymous
Posted: Saturday, April 25, 2009 4:49 AM

I've been a yacht captain, both motor and sail, for over 20 years.  I've run yachts over 180', and I'm appalled at the lack of informed discourse in this forum.

To all you dim wits that think charter brokers earn 20% of gross - - - -I've got a tip for you - Charter Brokers earn half of 15% of gross (I'll do your math for you, that's 7.5% of gross) because the other half of that 15% goes to those 'big bad yacht management' firms that put in a good word for you the last time your were in between and looking.... 

And the last 5% of that 80/20 plan that Mr. Cameron alludes to?  That also goes to the 'big bad yacht management' firms that feed the boat you work on through ads, promotions, and good will...

The charter brokerage business isn't about 'kickbacks' and "charter broker fees" - it isn't even about the offense the primadona (and occassionally inexperienced) captain may take to providing a 'familiarization trip' to discriminating and sometimes cranky charter brokers  - 

But, it IS about matching strong personalities and complex equipment and far away, remote and exotic destinations to that "extra-ordinary"  vacation of a lifetime.  For that expertise, I am every bit thankful for each and every charter broker that has ever booked me a charter.

Get back to basics and define 'extra-ordinary' - You won't find it's meaning in a hotel or on a cruise ship. 

For this reason chartering a yacht can not and will not be accomplished thru sites such as James Cameron's, which attempt to dummy down a client's dream vacation (usually a 'once in a lifetime' vacation) to the nuts and bolts of booking a suite on a cruise ship or a room at the Hyatt in Puerto Rico.... 

Besides, we already have sites such as his like: Orbitz.com; Priceline.com; Amazon.com etc....

I think the prior post had it right when they sited the failed time share programs for yachts.  Yachts are simply for discerning clients, and not at all for the 'all you can eat' cruise ship types...

I think it would do for everyone to take a step back and remember why charter brokers ever came into existence...  Could it be because travel agents couldn't do the job to begin with? 

How can modern day web sites that attempt to pigeon hole a worldly client's preference sheets into a web developer's version of paradise ever work?

I'd rather pay the charter broker...

Captain Mike Humphries


CaptRick
Posted: Saturday, April 25, 2009 3:55 PM
Joined: 25/04/2009
Posts: 4


To JCam -

Unfortunately you are mis-representing the facts - Victims of Madoff were part of an extremely exclusive and tight knit group of "peers" who rarely gained admission to the Madoff funds without recommendations and references from their "peers".  The fact that Madoff took advantage of family and friends alike is what made him so despicable.

Moral of the story?  Even friends and even family can put you in the soup and lead you down the wrong path, whether it be investing, or chartering a yacht.

The Maddoff / Lehman / AIG analogy is flat wrong.  Tying crooks like Madoff to "a couple of names within our industry" is simply a slander of the industry as a whole, and reveals your true intent, which is to ride the current wave of antipathy towards establishment to gain your own ends 

Point is, whether investing in funds or the charter of a lifetime, a client needs to perform due diligence.  Sure, talk to friends, scour the web, but in the end, if you want the most informed and unbiased recommendations of ALL your choices and options, the BEST answer is to utilize a charter broker who has done her (his) homework.

I've got to ask all you people out there, posting anonymously and otherwise: 

Why do you have your sights on charter brokers? 

Because if you do, then you are ill informed and not broad minded and only know a lazy few that sit around and wait for the phone to ring. 

As a charter captain myself, all the brokers I know and respect are experienced and well traveled, knowledgeable and conscientious.   Most of them have served time on yachts as crew.  Most of them travel (at their own expense usually), to investigate and tour and inspect yachts and crew and destinations in places such as Genoa and Monaco and London  and Dusseldorf and Marmaris and Poros and Dubai and Antigua and Fort Lauderdale, Miami, Newport, Palm Beach, Annapolis.  They do this every year, so as to be better informed as to what and where they are recommending. 

Do you envy them ?  Does it sound like fun?  I don't thinks so, because, by and large, it's alot of hard work and alot of hard travel.  Did I mention that it's also very expensive?

All of them work their asses off, into the night, and over their weekends, to ensure that planning and organizing the dream vacation comes as close as possible to producing that dream vacation for their client.  The charter brokers I know have NEVER ignored that phone call @ 11 pm at night when their client was on charter, because they make themselves available to assist and to advise. 

When I started working on charter yachts as a captain, I marveled at how the relationship between a yacht's owner and crew was closer to being a purely symbiotic relationship to brokers than anything I had ever before experienced.   

 

 

 


junior
Posted: Saturday, April 25, 2009 4:59 PM
Joined: 14/01/2009
Posts: 1026


I agree with you Rick.  Good Charter brokers work hard. Good Yacht brokers work hard.  Good yacht crew work hard. Good yacht owners work hard.   This is not the question.
    What needs to be brought into yachting is greater efficiency.  The yachts are very expensive to operate, every year more and more expensive.  
  How can we, yacht crew, yacht builders, brokers and everyone else in the industry bring the cost down ??  This is the question.  I never hear any constructive comments on this.  Everyone involved it protecting their own little turf.
  The combination of broker commission, PLUS promotion fees, crew salaries and high season dockage is a lot of money taken from a  charter yachts earnings .  I listen to what  yacht owners tell me.
   If we cant bring cost saving efficiency into the system, we will retard  growth in this sector of yachting.  This is happening before our eyes right now.

  Perhaps the system proposed by jcam could add efficiancy into certain sectors of the market.  We both know that high season charters  of  a certain price range sell themselves.  Why pay all that money to brokers simply to haul people from Cannes to St Tropez  in mid summer?    Its refresing to see that someone is thinking of this. 

  I still  foresee the formation of a yacht owners association who  demands reduced  broker commisions on the easy to sell , high season charters and  then rewards hard working brokers with high commisions for  filling in the low season with clients.


For we are many
Posted: Saturday, April 25, 2009 6:31 PM
Joined: 25/02/2009
Posts: 18



jcam
Posted: Saturday, April 25, 2009 6:41 PM
Joined: 15/08/2008
Posts: 11


Thanks for your responses Capts Mike & Rick,

Just a couple of thoughts on my part.

You may have missed some of my earlier thoughts that stated good brokers will always be around, and this concept is not an attack on the industry, but rather a concept to provide an additional option. 

 

“To all you dim wits that think charter brokers earn 20% of gross - - - -I've got a tip for you - Charter Brokers earn half of 15% of gross (I'll do your math for you, that's 7.5% of gross) because the other half of that 15% goes to those 'big bad yacht management' firms that put in a good word for you the last time your were in between and looking.... 

And the last 5% of that 80/20 plan that Mr. Cameron alludes to?  That also goes to the 'big bad yacht management' firms that feed the boat you work on through ads, promotions, and good will...”

 

Even that 7.5% number can be high, more junior brokers can expect to receive around the 2% mark. As to the final 5%, our owner had to pay additional funds to feature his yacht in ads. I think it would be safe to say that a good amount of those revenues would also be going to pay for rent/mortgage on offices in some rather exclusive locations around the world.  And there’s nothing wrong with that!!  Please understand that it is my view that the ultimate goal, connecting owners and clients, can be accomplished in a more efficient and cost effective manner, and that is what I am exploring. 

As far as defining extra-ordinary, it’s the experience that you and your crew provide for the client. (Impeccable seemingly intuitive service, not just a great meal, but a gastronomic event unlike any other ever experienced, not just an anchorage, but one void of any prying eyes in which they may enjoy the company of friends and family, oh and with and incredible isolated beach).   Much in the same way a clients don’t concern themselves with crew wages or owner finances, I’m not so sure they care about who introduces them to these extra-ordinary experiences, so long as they get what they’re paying for.  I do believe that paying less for that experience, if an option were so available, would be of great interest to the client. 

 

“Moral of the story?  Even friends and even family can put you in the soup and lead you down the wrong path, whether it be investing, or chartering a yacht.

The Maddoff / Lehman / AIG analogy is flat wrong.  Tying crooks like Madoff to "a couple of names within our industry" is simply a slander of the industry as a whole, and reveals your true intent, which is to ride the current wave of antipathy towards establishment to gain your own ends”

 

You’re got an excellent point about Madoff .  Not only did friends and family make those recommendations, so did institutions that did do their due diligence.  (The fact that the SEC completely missed the signs on multiple occasions as well would make the term “due diligence” quite nearly impossible to execute in this case.)  However, by and large, recommendations by peers continue to gain importance in the minds of consumers.  This isn’t wishful thinking, it’s a fact documented by consumer groups. Ask anyone in any industry and all will most likely agree that there is no substitute for “word of mouth” advertising.  My intent is absolutely not to slander the industry as a whole, and I am disappointed if my chosen words have left that impression.  I do believe there are disturbing trends though. 

 

“When I started working on charter yachts as a captain, I marveled at how the relationship between a yacht's owner and crew was closer to being a purely symbiotic relationship to brokers than anything I had ever before experienced.” 

 

This is how it should be, and I hope your relationships haven’t changed.  But when crew are taking hefty salary reductions (voluntarily or not) and industry officials introduce the idea of capping tips, I fail to see the “purely symbiotic relationship” as one that is still intact.  Many people working on yachts are not here for “footloose and fancy free” lifestyles, but rather as a professional career with the hopes of having a nice retirement at the end.  A good number of crew have a great deal of responsibilities to families, so my point to that end is not to “have my sights set on charter brokers” but rather to make sure crew are not being taken advantage of. 

Thanks again for your input,

James


CaptRick
Posted: Saturday, April 25, 2009 8:10 PM
Joined: 25/04/2009
Posts: 4


Further to the post above:

When I first started working on charter yachts as a captain, I marveled at how the charter relationship between a yacht and a charter broker was closer to being a purely symbiotic relationship than anything else I'd ever experienced.

Simply put, as a captain representing the owner's best interests, I found I needed the charter brokers as much as the charter brokers needed me.  No way around it!

Specifically, I need that broker to have confidence in my and my crew's ability to pull off a supurlative charter, and hence have the confidence to place a client on our boat in our care. 

 

Equally as much, that charter broker needs that yacht and its captain and its crew to not 'drop the ball', satisfy the client beyond expectations, and perhaps turn this experience into a repeat experience, benefitting all parties. 

Very symbiotic in my estimation.

People need to stop and recognize the value of the yacht / broker relationship for what it is, and why this relationship, for very good reasons, "has not changed since the advent of the telephone". 

The reason it has NOT changed is because safely matching all the rather complex variables of mobile equipment in somewhat harsh conditions to vagaries of human emotion and great expectations and the desire for best value under less than ideal circumstances requires the human mind and its ability to adapt. 

Removing the 'human touch' and attempting to boil it all down with sites such as bluewindow.com does a dis-service to clients and owners (vis-à-vis lost revenues) because there is no way on earth that Mr. Cameron's site, no matter how modern or interactive or efficient or media savvy or clever or well designed or well thought out (did I mention well funded?) can anticipate every instance or resolve every question a potential client might have, the way an experienced charter broker can do when planning a dream vacation and helping a client indulge in the 'full yachting experience'.

His attempt at this brushes over the fact that sites such as bluewindow.com possess the inherent tendency and inevitable result of narrowing the horizons and degenerating the 'yachting experience' down to simply an average vacation;  and let's face it, NOBODY goes on a yacht just to have an average vacation...

It brings to mind the phrase "Penny wise, pound foolish".  Sites like this are indeed proliferating.  NOT because people such as Mr. Cameron are bleeding hearts concerned for the owner's and client's (and obviously the industry's) well being, but because there's relatively little effort invested by Mr.Cameron, and he recognizes there could be a disproportionate amount MONEY to be made from the less informed clients and owners out there.

His efforts are the antithesis to those of a vast majority of charter agents.

Mr. Cameron's attempt reminds me of when Central Yacht Agent caused quite a stir and tried to dummy down the process of chartering a yacht by opening up their database to travel agents who had never before stepped foot on a yacht (At least CYA still recognized the value of the 'human touch' and kept the TA's involved...).  Central Yacht Agent's motive was the same as Mr. Cameron's - It was all about making MONEY, in that instance by opening up their subscribership to millions of travel agents instead of thousands of charter brokers.  In the process, CYA trampled the trust of the very charter agents who helped them reach their position in the yachting industry, and the net product of their efforts was to water down and pullute the quality of the information tendered to clients by travel agents who knew nothing of the product they were selling. 

That is where the real concern was and is...  I don't know a single charter broker who resents competition, but I certainly know plenty who resent competitors that get in the game but don't know the first thing about the product they're selling, all the while causing bonafide clients to shy away from chartering yachts, causing injury to everyone with their ignorance of the product they're pushing.  A bull in a china shop, if you will.

Mr. Cameron's site bluewindow.com is only the latest incarnation of this aberation, and it requires a strong response because it irks me, and others like me, that people such as Mr. Cameron don't seem to appreciate why there has been, for thousands of years, the need for personal assistance in the world of luxury. 

And yes, that includes the luxury yacht charter industry!

Lastly, (and despite his proclaimed experience) Mr. Cameron doesn't agree with "Thank you cards" & "Mini Charters" (aka Fam trips) &"Feedback" to charter brokers on future client desires.

Failure to understand the importance of utilizing these tools only illustrates how little Mr. Cameron appears to have learned during his tenure in the industry.

The depth of his lack of understanding will be easily measured by how much effort and money he expends on producing bluewindow.com

 

Sincerely
Rich


CaptRick
Posted: Saturday, April 25, 2009 8:19 PM
Joined: 25/04/2009
Posts: 4


Junior -

your quote " If we cant bring cost saving efficiency into the system, we will retard  growth in this sector of yachting.  This is happening before our eyes right now. "

begs retort - where have you been the last 15 years when the yachting industry has grown exponentially with double digit growth each year.

 

And if you thought it could go on for ever, I've got a condo conversion for you to buy in Miami....

 

Later

Rich


CaptRick
Posted: Saturday, April 25, 2009 8:23 PM
Joined: 25/04/2009
Posts: 4


Jcam -

so did institutions that did do their due diligence.  (The fact that the SEC completely missed the signs on multiple occasions as well would make the term “due diligence” quite nearly impossible to execute in this case.)  

 

Bull - those institutions and brokers are now being sued - again, flat wrong on your facts


junior
Posted: Saturday, April 25, 2009 9:51 PM
Joined: 14/01/2009
Posts: 1026


Rick.  Your not making positive contributions on how we can drive  down the cost of yacht operation.  You are simply behaving like a whale, deep dive , surface and blow off personal attacks..  No need to blow off Rick . We are all in this industry together.
   I'm sitting at the nav station on the yacht right now doing  the accounts.  Ive been a yacht captain and doing these accounts for over thirty years.  As I do the accounts, I'm reading the Bankruptcy notice, suspension of trading note from the Rodriguez Group, calculating my summer dockage fee's  at 6 euro per square meter, double checking the yard bill ....   everything up, up , up. We are in a new world, all industries are being forced to respond to the conditions.  Our indusrty must respond.
   I see nothing new in the cost formula for operating and owning yachts.  Nothing new,  only ever increasing costs for everything I touch . This must change. 
Anonymous
Posted: Saturday, April 25, 2009 10:19 PM
What James Cameron is doing is effectively creating a MYBA site which is open to the public where potential charter guests (or their representative) can search for a yacht and then have direct contact with the yachts for their "special" "once in a lifetime" charter requirements. If the owner, Captain and crew are up to marketing themselves then what is wrong with that? Sure the industry still needs brokers, but why should they not be kept on their toes as the rest of the world is? Good idea James, I hope it works for you.
jcam
Posted: Monday, April 27, 2009 7:42 PM
Joined: 15/08/2008
Posts: 11


Capt Rick (or Rich),

 

“Removing the 'human touch' and attempting to boil it all down with sites such as bluewindow.com does a dis-service to clients and owners (vis-à-vis lost revenues) because there is no way on earth that Mr. Cameron's site, no matter how modern or interactive or efficient or media savvy or clever or well designed or well thought out (did I mention well funded?) can anticipate every instance or resolve every question a potential client might have, the way an experienced charter broker can do when planning a dream vacation and helping a client indulge in the 'full yachting experience'.

His attempt at this brushes over the fact that sites such as bluewindow.com possess the inherent tendency and inevitable result of narrowing the horizons and degenerating the 'yachting experience' down to simply an average vacation;  and let's face it, NOBODY goes on a yacht just to have an average vacation... “

 

I’m not sure you even understand my concept.  I’m not attempting to “dumb down”, “remove the ‘human touch’”, or “degenerate the yachting experience”.  In fact, I would argue that Blue Window is designed to do quite the opposite by better informing clients by way of instituting a direct path of communication with those who know these luxury experiences the best:  captains and charter clients who have actually experienced the yachts, and if they wish to, they’ll always be able to pick up the phone and call me as well.  After all, no broker knows your yacht, its crew or its capabilities better than you do.   

 

“I don't know a single charter broker who resents competition, but I certainly know plenty who resent competitors that get in the game but don't know the first thing about the product they're selling, all the while causing bonafide clients to shy away from chartering yachts, causing injury to everyone with their ignorance of the product they're pushing.”

 

“Mr. Cameron's site bluewindow.com is only the latest incarnation of this aberation, and it requires a strong response because it irks me, and others like me”

 

I assure you Rich; I’m not a farmer from the Midwest who dreamt this concept up last night.  I think most captains, owners and clients will see the value in what I am proposing.  This option obviously isn’t the right one for you or your yacht, which is fine.

I wish you and your crew continued success in your respective futures.    

 

Chef Peter, please feel free to contact me via email and I would be happy to start the conversation with you, your captain and owner.   


Anonymous
Posted: Sunday, June 14, 2009 6:43 PM

[Comment removed by moderator] strikes again!!!  This is his latest venture in trying to thwart Charter Brokers.  He had his hand slapped for interfering in the Charter Broker's business and the community knows about it. Not sure why he is so focused on this section of the industry but his arrogance has always been on display with the Charter Brokers who do know him.  Anyway, if he ever got back on any charter boat I would be willing to bet that if a Charter Brokers knows he is the Captain they will go onto another boat for their client.

What will he do about contracts?  Most yachts demand a particular contract be used so will he also rewrite the 2 major contracts that are currently used  (MYBA & AYCA)?  Most reputable charter management firms who, by the way, only make money when they close a deal on behalf of the Owner, would not accept a bastardized version of these contracts.  If the charter management companies don't produce bookings they make nothing.  Same goes for most Charter Brokers.  It's called putting yourself on the line.  If you can't get the job done, then you make nothing.  It is a breath of fresh air to see Captains Ric & Mike speak knowledgably about the role of the Charter Broker, especially dispelling the erroneous thought that the dreaded Charter Broker makes 15%!  So far from the truth.  Unlike crew, Charter Brokers also get no benefits, health or otherwise, no paid vacation, no on the job clothing, no meals and, yes, they have to pay their own travel expenses to go to these charter shows to learn their product AND pay their living expense, mortgage, car payments, Federal taxes and Social Security and on and on...That is all out of that 7.5% they might earn if they actually book a yacht!!

I think that [Comment removed by moderator] should actually become a Broker, in some form, with no salary, and then tell us if he doesn't think he deserves the money he would make for a legitimate charter booking or sale of a yacht.  I know a lot of crew that came ashore and did just that and they sing a completely different song!  I know he would feel very justified in having the Owner pay that commission.  He "launched" this platform last October..I wonder how may Owners rushed to sign up? Hmmmmmmmm

 


jcam
Posted: Friday, June 26, 2009 1:27 AM
Joined: 15/08/2008
Posts: 11


Once again, you’re not paying attention, “anonymous”. See, this isn’t about “thwarting brokers” in fact; it’s not about brokers at all.  It’s about putting clients and yacht owners together in the most direct, effective and beneficial way possible.  The charter industry would not, as much as you would like to think, die, if it weren’t for charter brokers.

 

A “hand slap”, I would say was understated.  In fact it went way beyond a “hand slap”.  Even though I had asked the brokerage house for their banks ABA number so that I could transfer appropriate funds (as per a previous contract with a two year clause, and that I would have made NOTHING off of) that particular house not only threatened me, but an owner and the other crew on board, as well as reprimanding the charter client.  Some would call that arrogance. Threatening me I could deal with, but I would not put the other parties at risk. It certainly seems in that instance that they only parties interest you had at heart was your own. Who do you work for anyways? You threatened your own clients!! To recollection, you would have gotten your full commission, whether that charter would have come through me or not, (the following years as well).

 

This is part of the problem of the current industry, and you illustrate it well.  It’s almost a police like state in which if anyone steps out of line, you like to think you’ll make sure they never get another charter/job again, (but you’re not as good at it as you would like everyone to believe).  Amongst others, I believe that brokers’ seemingly unlimited power in the industry is inevitably coming to an end.  After all, you haven’t stopped me from working.  

 

Enough of brokers whining about having to do the things 99.99% of what the rest of the world have to do: work, and pay their bills!  Don’t want a mortgage? Rent.  Don’t want new clothes? Go to a consignment shop.  Don’t want to pay for health care? Suffer next time you get sick.  Don’t feel like you should pay for your food? Go beg at a major intersection.  Nobody feels pity for you if you have to pay for your transportation, food or lodging.  A lot of us have to too, but you don’t hear us whining about it.  If you’re going to complain about real life, then go back to being a crew member.  Then you can have all those great things as well as: working every holiday, barely seeing your family, being home 30 out of 365 days a year.  Get over yourself; you live better than well over 70% of the world’s population. My guess is that you won’t go back to crewing either because you don’t want to, or you don’t fit the “criteria” you push to your own clients, “hmmmmm”.

 

So, for the final time, I’m an entrepreneur and a captain, and I see a better way for yacht owners and charter clients to connect. I’m not government subsidized or even privately supported.  I haven’t made too much off this endeavor, so at least we agree on one thing; you don’t get paid unless you perform.  My performance, so far, is getting a concept to start to see its light of day.  I don’t have the incredible marketing funds to publicize it the way I’d like to, but that’s ok.  Word is slowly getting out that there’s an alternative in the charter industry for owners and clients looking for an option.

 

If you’re crew interested in the concept, you can contact me at: james@bluewindow.com

If you’re looking for more of the same in a brokerage house, might I suggest you contact anonymous at: anonymous@anonymous.com


Anonymous
Posted: Wednesday, July 15, 2009 8:31 PM

I see I have hit a sore spot!!  In any event, any Captain that tries to intervene with a client that they have gotten from a reputable Broker is taking advantage of the trust that Brokers build up with really good Captains, and there are many!!!  You needed your hand slapped!!  If you had just done the right thing, the result would not have been the same. 

I won't comment on the rest of your rant because it's not worth it.  Obviously, you think Brokers AREN'T entrepreneurs? 


jcam
Posted: Friday, July 24, 2009 2:04 AM
Joined: 15/08/2008
Posts: 11


Touche on the sore spot; and define intervention.  If a client is talking to me, and likes my idea of doing business better, is that intervention on my part, or choice on his. Your firm would still have profited, (for two years). In other words, if you buy a home through a real estate broker, and then you meet one who can better help you achieve your goals; are you legally or morally obligated to use the original broker? 

I know you understand the financial implications yachting provides on different local economies. That includes the one we both live in. The main beneficiaries of the current state of the economy, locally, seem to be marinas. They're busy because many yachts are moored and mothballed.  Not a good sign overall, agreed?

Yachts are playthings, not necessities.  On the list of owners "wants and needs" the toys go first in down markets.  This is a really bad down market, and even though the Dow broke 9,000 today, it's my personal feeling that current market levels show signs of what Mr. Greenspan used to call "irrational exuberance".  I do hope that I'm wrong. 

So here's my question to you.  Do you think the current state of yachting will:

a) rebound to 2006 levels in under two years;

b) rebound to 2006 levels in two to five years;

c) rebound to 2006 levels, but not in the foreseeable future.

d) not sure if it will ever rebound to 2006 levels in my lifetime.

It's both our jobs (if we want to see this industry as robust as possible) to do everything we can to keep all the players at the table, and to give them what they want.  I see your specialty as those clients who like to receive calls and deal with different departments on the phone as they plan their vacation. I see mine as a more time/results based generation that would prefer not to get phone calls from brokers, but rather just deal with the captain/owner directly and get it done, maybe making a phone call to a third party only if and when necessary, and enjoying the same phenomenal getaway, (oh, and at a better price for both parties involved).   

Finally, the brokers who open up their own shops, and put their neck and credit on the line are absolutely entrepreneurs.  The people who work under them are not.


Larry Ebbs
Posted: Friday, July 24, 2009 3:51 PM
Joined: 24/07/2009
Posts: 1


The relationship between the owner, crew, charter broker, sales broker, management company and CLIENT is a complicated mix of business and politics. I have worked in the management side of small companies like Flagship in the USVI as well as the big boys like BSA, CNI & IYC for more than 15 years; so I have heard these issues many times before.

 In general everyone tends to look at their own self interest when it comes to determining what is fair compensation. Also, we often don't fully appreciate what is involved in the efforts of others. Over the years diiferent approachs have been put forth, debated and occasionally tried. Changes evolve slowly, but they do happen, given enough time and effort. But for the changes to be embraced by the industry as a whole, it must be acceptable to all parties. 

This industry does change and evolve, but it takes time ..... 


Anonymous
Posted: Saturday, July 25, 2009 5:51 PM

Back to the sore point...You respond out of context.  My point is that if you are put together with a client by a Broker, in good faith, to work that client directly, cutting out the Broker, is not the way to go and puts you in the position of being less than favorably regarded in the industry.  There are provisions in the contract if the client decides he wants to book the yacht with another Charter Broker so both the previous and the current CB get paid some commission.  However, it is a different story when the Captain gets between a client and the Broker who brought that client to the table.  If that isn't plain enough, I don't know how to state it any more clearly.

Will the industry rebound to the level of 2006 within 2 years?  I believe it will.  Here is my response within your text in blue

"It's both our jobs (if we want to see this industry as robust as possible) to do everything we can to keep all the players at the table, and to give them what they want.  I see your specialty as those clients who like to receive calls and deal with different departments on the phone as they plan their vacation."

 I see my specialty differently.  My specialty is keeping up with the industry as it evolves and knowing my product, which is why the clients call.  Then I need to communicate with the professional Captain and coordinate what I always hope will be a great experience for the client. 

"I see mine as a more time/results based generation that would prefer not to get phone calls from brokers, but rather just deal with the captain/owner directly and get it done, maybe making a phone call to a third party only if and when necessary, and enjoying the same phenomenal getaway, (oh, and at a better price for both parties involved)."

Your specialty seems to be trying to eliminate Brokers, the same people that kept you employed on charter yachts AND brought income to the Owners of these yachts.  You completely minimize the Broker's role and I was very happy to see a lot of Captains do not feel the same way and are happy to have a Broker working with them as a team, not tearing them down.  

"Finally, the brokers who open up their own shops, and put their neck and credit on the line are absolutely entrepreneurs.  The people who work under them are not."

Any Broker that works on commission only is betting on their own abilities and taking the risks involved in being an entrepreneur, be that setting up their own shop or working for an existing company.  No bookings, no money!


 


Anonymous
Posted: Monday, July 27, 2009 4:43 AM
You contradictided yourself anonymous.  In one paragraph you said that you get paid even if another broker books the next charter then later you say you don't get paid unless you make a sale.  Which is it?  Seems as though the industry could use an option, but as Larry states, it takes time. 
Henning
Posted: Monday, July 27, 2009 10:51 AM
Joined: 01/06/2008
Posts: 1053


Actually, he referenced that with "depending on how the contract is written", I'm assuming his reference is to open vs exclusive listings.
Anonymous
Posted: Thursday, July 30, 2009 3:17 PM

In answer to anonymous, if a client books a charter, ALL contracts indicate that the Broker commission is protected for a period of 2 years if that client books the SAME yacht within that period.  Now, if the client, for whatever reason, wants to rebook the yacht but isn't happy with the original Broker, the client can rebook with a new BROKER (not the Captain on that yacht) and both Brokers are compensated.  The new Broker makes the majority of the commission and the original Broker gets the smaller share.  After that, the client is no longer obligated to the original Broker.  My big point however was that it is not right that a Captain who made contact with a client through a Broker then cultivates the client for his/her own purposes to make money.  In most businesses this practice is considered taboo.

On the point of making money...If a Broker is on commission the only time they make money is when the successfully book a charter and that's the bottom line!!!!!!!


Anonymous
Posted: Thursday, July 30, 2009 4:25 PM
Hi All,
 Okay, I have been following this for some time, just reading. Seems like this is some pretty in depth stuff dealing with taking a vacation. But a question I do have, is why does a broker get these exclusive rights to continuing to receive money the next time a client books a trip? If I go buy a car, I wouldn't even think of signing a contract that stated that I had to come back to that dealer, or if not he gets part of the other guys commission the next time I buy a car. I mean, if a broker actually works, then why not depend on the client having enjoyed their service and wanting to come back next year? If the client was not happy, why should they ever be obliged to do business with that person again? If I go out to eat, and had a waitress that was great, the next time I want to go there, I might ask for her again. But if she was a lousy server, why should I want part of the tip for the next girl to go to her, just because I ate at the same resturant, food was great, but service was lousy.
I guess all I really want to know is why would a broker keep getting paid for someone else doing something? They got paid the first time when they worked for it, right? Am I missing something?

Rip
Posted: Thursday, August 6, 2009 9:04 PM
Joined: 06/08/2009
Posts: 5


I am soooooo glad I went back to smaller boats where we have more control over these issues.

But good luck to jcam in at least waking a few people up. Not all of them, obviously, but the ones that more than need it. 


I'm a firm believer in:

"The pig gets fat...but the hog gets slaughtered."

And that applies to owners, captains, crew, brokers, vendors, clients, well, everyone.

 

Anonymous
Posted: Saturday, August 8, 2009 7:26 PM
The contracts were originally written to protect the business source (Brokers) to Owners.  A lot of work goes into successfully closing a deal whether it is a charter or the sale of a yacht.  As the business evolved, the contracts were re-written to give the clients an out if they didn't want to continue to work with the same Broker and, following that, the client has a choice if he wants to charter the same yacht again.  Consider the real estate market...If Broker shows a house to a potential buyer, the seller has to honor the source of business (original Broker) if the buyer comes back though someone else.  Pretty simple business practices.  Relegating the discussion to a choice of restaurants doesn't really address the situation in terms that are realistic.
rodsteel
Posted: Sunday, October 18, 2009 9:04 PM
Joined: 25/06/2009
Posts: 277


Although I come into it a bit late, I think this is a good discussion and should continue.

 

The last few posts I believe are "on point". The high-end real-estate market model could apply to the charter brokerage market. The question about "why should a broker get an exclusive for future business?" is one I had also. A real-estate broker does not expect a commission if I buy my NEXT house (from the SAME builder) using a different broker (or even DIRECTLY from the builder), why should a charter broker? (I will concede that, if the charter broker is counting on future bookings from the same client and thus discounts the first booking because of this, then maybe the initial booking commission structure may not be appropriate).

 

These days, the model of the low-end and commodity real-estate markets, which are increasingly dependent on web-based marketing, could be applied to the low-end and "commodity" Med/Caribbean charters as jcam proposes? (but jcam is going to have to change the cost structure to attract the "low-end" ;o))

 

Rod


Anonymous
Posted: Wednesday, November 4, 2009 7:40 PM
Thanks for jumping in Rod but the point was that the Broker is protected if the client charters the SAME boat within a certain period, not the NEXT boat...That is the difference.  If the client decides to charter a different boat from a different Broker, that is their perogative.  The protection comes into it when the Owner/Captain goes direct to the client or vice versa, which still happens and is ultimately the reason the contracts were written in this manner.  We all work hard and it is difficult for anyone to see their hard work go out the windo and anyone would feel this way if they are building a business.  Hope that clarifies.
rodsteel
Posted: Friday, November 6, 2009 3:10 PM
Joined: 25/06/2009
Posts: 277


Dear Anon...

 

I understood the issue. That was the exact point of the phrase "NEXT house (from the SAME builder)" in this sentence:

 

"A real-estate broker does not expect a commission if I buy my NEXT house (from the SAME builder) using a different broker (or even DIRECTLY from the builder), why should a charter broker?"

 

That phrase is analogous to "NEXT charter (on the SAME boat)".

 

Why are the two situations different??

 

Rod


jitze
Posted: Saturday, November 14, 2009 5:57 PM
Joined: 13/01/2009
Posts: 1


You can charter the NEXT (not the same yacht) yacht built by the same builder from a different Broker!   I thought I was very clear.  You just can't charter the SAME yacht without paying the Broker who introduced you to that yacht.  Pretty simple.  If a client chooses to book the SAME yacht through a different Broker, or direct, the Owner of the yacht pays the original Broker a much reduced commission.  Following that, there is no obligation to the original Broker.
rodsteel
Posted: Saturday, November 14, 2009 10:04 PM
Joined: 25/06/2009
Posts: 277


Jitze,

 

There is a Country Western song with a famous line "what part of  'no' don't you understand" ;o))

 

You wrote: "pays the original Broker a much reduced commission."

 

My question is why? What is the rationale that justifies the extra compensation (for no extra work)?

 

Rod

 

 


Anonymous
Posted: Saturday, November 14, 2009 10:21 PM
I think the heart of this issue is one of who holds and manages the schedule and who escrows the charter deposit and final payment to the boat/owners/captain..The internet is a great leveler in any playing field. The lone seller of a GM car on eBay is the same as the giant GM selling one GM car on eBay for example. Client reviews could be kept on a site such as Trip Advisor which could easily keep tabs on charterers experiences. Still who would hold the deposit? I have been in the charter business from all angles, captain, owner, agent and yes things are changing quickly. I don't pretend to have any quick answers to how boats can make more money or how crew will get more tips. Even in the past I have gotten 5% tips for a 20 day 10 island charter. (the distances look so small on the big map) As a charger broker I have always mentioned in my preliminary question sheet to the charterer food preferences as well as a mention of boat living, a blurb about the heads, dangers of the Caribbean and a little bit about the guest talking to the captain about the tip on day 1. If the crew know that they are getting a good tip then I guarantee the best trip they ever had...Now there are a lot of items floating around this topic and Dockwalk should hold a seminar on the subject of how to figure out how boats can market direct to guests and who would run the show? Were talking lots of money here. In the end the current situation of brokers on one side and boats on the other may be the best, who know but thoughtful discussion can be helpfull. Sometime running on gut feelings is not a good idea......
 
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