Signs from the recent Monaco and Fort Lauderdale boat shows indicate that the yacht sales market has begun a slow climb out of the economic downturn. The burgeoning charter market, too, is experiencing a flurry of activity. With a successful Med season behind us, what is in store for winter in the Caribbean?
After the 2008 crises, the charter market was flooded with yachts, many whose owners were unable to sell and were looking to recoup some investment. At the same time, the market experienced an upturn in charter inquiries, many from would-be purchasers who decided to charter instead. At the very least, this activity has kept the charter side of the industry very busy.
The summer Med season saw charter activity that was in line with 2007 levels and the Caribbean forecast is, generally speaking, optimistic.
“The 2011-2012 Caribbean season should be good,” says Rupert Connor of Luxury Yacht Group in Fort Lauderdale. “Prices are a little firmer than the past two winters, but still, having some flexibility in your asking price is important to secure multiple weeks.”
The first measure of the season comes from Antigua, which is gearing up to be one of the biggest Caribbean charter shows on record. “The season is looking surprisingly good for charter, and the bookings and inquiries are up, I am told,” says Paul Deeth, chairman of the Board of Directors for the annual Antigua Charter Yacht Meeting.
This year’s show has over 130 registered boats from 60 to 380 feet in length, including several 200-feet-plus motor yachts and 150-feet-plus sailing yachts. New builds will sit alongside older and historic builds, making for a veritable feast for the potential charter guest. “We have [the 246-foot, 1992] Leander showing in Nelson’s Dockyard for the first time that she has been in a charter show,” says Deeth.
“The Antigua show has always been a great success for us,” says Lara-Jo Houghting of Churchill Yacht Partners. “We find exceptional exposure for our fleet and there is a strong presence of European brokers.” Houghting manages a small fleet of six motor yachts, all of which are showing solid bookings for the Caribbean season and all of which will be present at the Antigua Charter Yacht Meeting. The new girl on the block is Lady J, a 142 foot, 1997 Palmer Johnson that will debut at the show at a competitive $120K per week. The remainder of the Churchill fleet are experienced charter yachts. “All of our yachts have been on the market for quite a while,” says Houghting. “We find that clients are oftentimes reluctant to book a new yacht; most are repeat clients with repeat brokers.”
But while holiday bookings remain strong throughout the charter market, neither that nor the anticipation for the Antigua show itself can forecast what the season will experience come February. Jan Henry, a charter broker with Fraser Yachts and President of the American Yacht Charter Association cautions, “The Antigua Charter show will be chock-a-block with really great boats, but that is not always indicative of what the season will be like. The Caribbean seems to have fallen out of favor with some clients, either because they prefer to cruise elsewhere or have been affected by the financial situation. But there are boats that have quite a few charters booked, so I remain optimistic. This season might not be the greatest, but it won’t be bad.”
Houghting agrees, “In comparison to previous years, the outlook for this season is stable; it’s not more or less popular.”
But while the turquoise waters of the Caribbean will be dotted with hulls, some will be noticeably absent. A busy summer season and owners’ wariness to spend unnecessarily is keeping many yachts in the Med instead of making the annual crossing. As a result, more yachts are staying put and undergoing refit work in Europe despite the attractive value of the US dollar.
“There is such a clear difference between the demand in the Med and the Caribbean that the winter season has become the perfect time to perform extended maintenance,” says Connor. “We’ve just advised a 60-meter-plus new build to remain in the Med and launch to the charter market in the spring, when the maximum income can be made.”
Despite this, those on the ground in the islands are hopeful. “I think it will be a great year, considering the number of yachts in the Antigua show and interest from brokers,” says Danny Donelan, assistant manager of Port Louis Marina, Camper & Nicholsons. “More and more guests will be exploring the Southern Caribbean and using the marinas between Grenada and St. Lucia to do charters through the Grenadines. I think you will see more large yachts basing themselves down south this winter to capitalize on the charters in the Grenadines.”
No matter what the season holds in store, crew must be in top form to ensure their yacht stands out from the crowd. This past May, Fraser Yachts introduced the Diamond Collection, an initiative started in response to the mind-boggling number of yachts on the charter market. Yachts with this distinction have been vetted and its crew has received special training in the area of customer service to ensure an exceptional standard. So far, the idea has been very well received by clients.
“Repeat clients are looking for stability and crew are everything,” says Houghting, noting that kicking off the season with a strong showing at the charter show is the best thing a charter yacht can do. “But a charter yacht should not be on display if they are not ready,” she cautions. “The crew has to be eager, enthusiastic, and 100 percent together. It’s a tough market out there.”