I occasionally hear rumblings about the idea of charter clients booking vacations directly with yacht owners, thus cutting out the charter broker as middleman. The theory goes that if a person can book an airline ticket, hotel room, or cruise ship cabin directly over the Internet, she also should be able to book a yacht directly through its owner’s website.
This idea sounds reasonable until you realize that charters don’t come in pre-packaged formats. There is a good reason that I always recommend booking charters through a reputable broker: If something goes wrong, you don’t want to be left on your own having to argue in court against the guy who has enough money to actually own the yacht.
I was reminded of this reality just last week while having lunch with Jennifer Saia, president of The Sacks Group Yachting Professionals. She related the story of one of her company’s retail charter brokers, Ali Kaufmann, having just spent a month sorting out problems to successfully complete a 10-day booking aboard a yacht with a base rate of more than €100,000 per week. None of the problems could have been predicted, and without a reputable broker in the mix, it’s unlikely that any of them would have been solved to the charter client’s satisfaction.
Yesterday, I nabbed the following, exclusive interview with Kaufmann to get the exact details about what transpired. Keep in mind that the yacht being discussed is more than 130 feet long—a large, exclusive yacht by any charter standards—and is marketed for charter by a leading, international company. It is a cautionary tale, to say the least, about why it is smart to have a reputable charter broker on your side no matter how trustworthy you think the yacht’s owner or management company is.
This was a fast booking process, right?
Yes. The client called me about four weeks before he wanted to travel, which is not a problem, but he wanted to secure the charter within a couple of days. I got all the contracts done and all the money wired for him within that time frame. At that point, the charter seemed standard. Fast, but standard.
And then, the very next day…
Literally within hours of the funds being moved through a wire transfer, the client called and told me he could not take the charter during the time he had booked. He wanted to postpone the trip. He had an issue with his visa that would take him longer than expected to sort out.
Now, in the charter industry as a whole, nobody wants a cancellation. Not owners, not captains, nobody. The majority of the time, owners are willing to say, ‘Okay, that’s unfortunate, so I’ll give the client time to re-book the boat.’ Maybe it’s six months down the road, or another amount of time to get the problem sorted out on the client’s end. Usually that’s what happens. In this particular case, though, the yacht’s owner wasn’t willing to make those exceptions. In this economy, the owner couldn’t commit to that.
At this point, the charter was less than 30 days away. That means the client had paid in full, a total of six figures.
Not only had he paid in full, but he had also paid an additional delivery fee to move the yacht to where he wanted the charter to take place. According to the terms of his contract, he was plain out of luck. The owner would have been within his rights to keep the money and say, ‘Tough break.’
What did you do?
I wrote a heartfelt letter to the owner and asked the yacht’s manager to send it, asking the owner to please reconsider giving my client the option to use the boat at a later date. I asked for about a month of leeway to get the visa problem sorted out.
That letter resulted in the owner himself calling me to discuss the situation. That’s rare, and it was very nice. The owner gave my client the option of another set of dates, and the client said, ‘Okay, I’ll put my family on the boat even if I can’t go myself.’ That was an example of successfully negotiating beyond the contract for my client, something that a client on his own might have a really hard time doing directly with a yacht owner who already has money in hand.
I also agreed to try to find a sub-charterer, someone to take over the charter in place of my client. I worked my network of connections in the charter industry, but the travel dates were just too close to find someone to take my client’s place. Even though in this case there was no sub-charterer to be found, that’s also something that a charter client would have a hard time attempting on his own, without using a well-connected broker.
So at this point, the yacht owner has been paid and the charter client has travel dates that work for him. As long as the yacht actually provides the vacation that the contract promises, the story has a happy ending.
Right. It all came down to the crew performing a great luxury yacht vacation to make the entire experience a success. And the very day that my client got onboard, I received an e-mail from the captain telling me that everything was fine. But when I called my client the second day of the charter, as I normally do with all my charters to make sure everything is going well, my client told me that only nine of the promised 11 crew members were actually onboard. And one of the missing crew was a massage therapist whose services the client was eager to try out. Now, this is a reputable, well-known boat listed with a reputable, well-known management company. The number of crew are stated clearly in the contract. And yet, they weren’t there.
How can a charter broker help in a situation like that?
I called the yacht’s manager, who apparently had been kept in the dark by the captain about the crew situation. Within about 15 minutes we had a massage therapist ready to get on a plane and join the charter. But my client said no. At this point, he was beyond wanting to discuss it. He wanted to just enjoy his vacation. He was very happy with the boat and the accommodations, and with the crew who were there. He especially liked the chef and chief stewardess, so all was looking at least okay.
Until…
On the third day of the charter, my client called me to say the yacht’s tender wasn’t working properly. It would only go at one-quarter speed, and then it completely broke down. This left my client unable to anchor in harbors for privacy and then use the tender to go ashore, as had been planned, or to do any water-skiing or other water sports. It’s a serious problem.
At that point, my client felt he was entitled to some form of compensation because the contract states that the charter includes the yacht and all its tenders in full working condition, and he had paid in full for those amenities. And even given all the challenges leading up to the charter, he was right.
Were you able to get him a partial refund?
I was. There were two crew missing, so I contacted a crew agency and asked what the daily freelance rates would be for those two positions in the charter location. Then I contacted a shore agent to ask about a rental fee for this particular tender for 10 days, which was the duration of the charter. I received a refund equivalent to the expenses that I had researched.
The yacht’s owner wasn’t happy, but my client was.
All said and done, what did your client say about the charter?
He liked the boat and really liked the chef and chief stewardess, who made his charter a success. He wasn’t happy with the captain, who hadn’t tried 100 percent to get everything right, but he was happy with me as his broker because I had worked so hard on his behalf. He definitely was grateful for the refund that I was able to get him, and at the end of the day he had a nice time with his family.
What is the biggest lesson learned for anyone wondering whether to use a charter broker?
For me, the lesson is that you have to have a professional who can look at the black-and-white words of a contract and be able to make those black-and-white words more colorful. These are people’s lives we’re dealing with. A good charter broker can deal with whatever problems arise. Without a broker, this client wouldn’t have gotten any money back. He would have been out of luck. The owner has the money, and without a broker, there would have been nobody fighting on the client’s behalf.
I don’t know why anyone would take the risks of booking direct with a yacht’s owner. In cases like this one, the broker’s commission is well earned.
You can reach charter broker Ali Kaufmann directly by contacting The Sacks Group Yachting Professionals.
Tags: Ali Kaufmann, charter broker, client, Sacks Group Yachting Professionals