Stories on BrokerageBoss.com show drastic price cutting that could affect future charter reservations.
One of the most interesting comments I heard during Antigua’s industry-only charter yacht show came from Terry Hines, the charter marketing director for International Yacht Collection (and a longtime industry player whose views and insights I have learned to trust). Hines made the comment during a public presentation about recent changes to the MYBA charter contract that many reputable charter brokers send to their clients. While talking about future bookings and explaining how the MYBA contract protects charterers in the event of a yacht’s sale before a charter can commence, Hines quipped: “Every retail charter broker needs to be watching the brokerage markets very carefully right now.”
The comment was based on what she is seeing both within the International Yacht Collection yacht sales division and across the yachting industry as a whole: Some owners dramatically dropping the prices on their yachts for sale, hoping to find a buyer fast as the global recession lingers. Such sales, of course, could hinder or outright cancel any charters that are planned for dates after a new owner takes control of any given yacht.
Since I heard Hines’s comment two weeks ago, I have taken her advice and watched the brokerage markets carefully. And, as is usually the case, she has turned out to be absolutely correct.
Just this morning, the BrokerageNews blog reported that Merle Wood not only just signed the 191-foot motoryacht Islander for sale, but also immediately dropped the yacht’s asking price by $5 million, from $24.95 million to $19.5 million. Islander is currently being marketed for summer 2010 charter by Peter Insull.
Last week, I reported that RJC Yachts had dropped the asking price on the 147-foot motoryacht Aquasition by $1 million, to $12.9 million, while continuing to offer her for charter this winter. Also last week, BrokerageNews reported that Merle Wood had announced a sale price drop on the 102-foot charter motoryacht Liquidity, from $2.299 million to $1.695 million. On December 11, BrokerageNews reported that International Yacht Collection had announced a $1 million sale price drop on the 155-foot charter motoryacht One More Toy, now offered at $21.8 million.
For charter clients, I think this perspective on the interlinked charter and brokerage markets offers two smart lessons to be learned.
First, ask your charter broker whether the yacht he or she is currently recommending for your vacation is also for sale and, if so, whether there have been any recent announcements of price drops. That will help you understand whether the yacht’s owner is seriously trying to sell the yacht at the same time charters are being booked.
Second, take a hard look at any charter contract before you sign it, and make sure it gives you recourse in case the yacht’s owner sells the yacht before any travel dates that you book. The phrase “liquidated damages,” as I understand things from Hines’s presentation, is the key to ensuring that you are in fact protected.
Tags: brokerage, Brokerage News, charter