Island Global Yachting, a Fort Lauderdale-based company that operates marinas in the Americas, Caribbean, and Middle East, has just announced two new deals. The first, Anchor Pass, targets transient megayachts. The second, HomePort, is designed for megayachts that base year-round in a single location.

“Anchor Pass is the result of us surveying about 60 yacht captains,” said Sarah Bensimon, IGY marketing and sales manager. “They all wanted more flexibility within our network of marinas, so that is what we are now offering.”
Under the Anchor Pass program, you pay for 120 days of dockage and receive 365 days for use at Yacht Haven Grande in St. Thomas, The Yacht Club at Isle de Sole in Sint Maarten, Simpson Bay Marina in Sint Maarten, and Rodney Bay Marina in St. Lucia. For megayachts in charter, the participating marinas would provide one base each in the Virgin Islands, the Northern Caribbean, and the Southern Caribbean, giving captains flexibility no matter where charters are booked.

I asked Bensimon to work up the financials on Anchor Pass for a 125-foot motoryacht. Normally, she told me, that owner would pay an average of $4 per foot at the participating marinas, which is $500 per day. If you paid for a full 365 days, the bill would be $182,500. With Anchor Pass, the total bill is $60,000—a savings of $122,500, or about two-thirds off.

“You’re buying in bulk and saving up front,” she said. “That’s the whole idea.”

The same idea is behind HomePort, which allows less-transient yachts to lock in rates for as long as ten years at a single participating marina. I asked for the rates on a 125-footer at Yacht Haven Grande for the next five years. At $3 per foot, Bensimon says, the five-year total would normally be $684,375. With HomePort, IGY would provide the same access for $374,430. You put 10 percent down when you sign up, and you pay the full balance on the date that your long-term plan begins—and you save more than $300,000.

These deals come with two concerns, to my mind. One: You may pay in advance and then not use the slips. Two: IGY or the participating marinas may go out of business before your deal ends. The former concern only you can address. The latter, I think, would be worth bouncing off your attorney before you sign the papers.

But once those concerns are satisfied, the savings to be had are substantial—and for many years to come.

So says Fraser Yachts Worldwide in the new edition of its e-newsletter, which describes the charter industry as a global marketplace filled with last-minute deal-making and more supply than demand.

I was struck by the bluntness of the following statement, which pulls no punches about the recent Mediterranean season. Based on what I’m hearing right now from top charter brokers, it’s likely that this market assessment by Fraser will remain true into the upcoming Caribbean season, as well:

“With very few exceptions, charter bookings came in very late over the summer period. While we used to see vacations being booked six to eight months in advance, this summer saw the majority of bookings being finalized just a couple of weeks in advance. Some yachts were booked with only a few days notice before the charter commenced. The number of yachts available for charter has risen steeply in 2010, although there has been a slight decrease in the overall number of weeks booked. The wider choice and availability put serious pressure on the weekly rates, and we saw a lot of heavy discounting. We worked closely with yacht owners to devise an array of innovative offers, adding value, offering complimentary relocation and other incentives. The market is getting tougher.”

Fraser’s e-newsletter goes on to say that the current market conditions are not all gloom and doom. They represent a real chance for seasoned charterers to snap up great deals, Fraser says, as well as a chance for the industry to attract first-time charterers through added-value vacation offers. I think that’s very true, and cause for optimism if leading companies act on the opportunity.

Also worth noting is Fraser’s new assessment of the market for crew placement. The recession, it seems, has weeded out “backpackers” who thought working on yachts might be fun, and has left the industry with serious, career crew members seeking the vast majority of jobs. That’s good news for charter clients who want to receive outstanding service. When combined with the previously mentioned predictions, it means you will be able to get a better charter value for less money, at least in the near future.

Samar is a 254-foot jaw-dropper that has 10-foot ceilings, multiple elevators, and no fewer than 25 crew for just 12 charter guests. The yacht is part of the fleet at Edmiston and Company, who tells me that anyone who books before August 31 for winter charter dates will receive a 15-percent discount. That means Christmas and New Year’s charters, regularly priced at €675,000, are now €573,750. The base rate for other weeks during the winter season drops from €650,000 to €552,500.

Samar's elegance will be available at a discounted rate for the winter season.

This offer is significant not only because of its sheer value in euro, but also because it appears to be the greatest evidence yet that megayacht charter will continue to be a buyer’s market going into the winter 2010-11 season.

Before the global economic crisis began in mid-2008, charter yachts of Samar’s caliber in the popular Northern Caribbean cruising grounds were booked as much as a year in advance, and almost always at a premium rate. At this time in 2009, when the economic downturn had become a stark reality, yacht owners were still hoping for a market recovery for winter 2009-10. They refused to publicly announce discount offers until the absolute last minute, if at all.

By contrast, as we pass the halfway point for the year 2010, high-quality yachts like Samar are publicly announcing early-booking discounts a full five months before the winter season begins. Fraser Yachts Worldwide recently stated quite publicly that while brokerage sales are beginning to recover from the economic downturn, yacht charter is “still feeling the pinch”—and causing yacht owners to change their attitudes.

“Most yacht owners started off by adding value to the charter price, such as including relocation fees or other onboard services,” Fraser announced in early July. “In recent weeks, as the [summer 2010] season marches on, we’ve seen straight discounts being offered, sometimes up to 35 percent off the standard rates.”

Longtime charter broker Shannon Webster of Shannon Webster Yacht Charters says she is seeing similar attitudes emerging among yacht owners who want to ensure that the upcoming Caribbean season is stronger than last year’s, instead of waiting to see if an economic recovery materializes in time.

“It appears that some yachts are going to be more reasonable about their minimum number of days,” she says, alluding to 14-day minimums that some yachts used to require for any charterer who wanted to be aboard Christmas morning. “And some yachts are holding their regular Caribbean rates with no premiums added for the holiday period.”

Will we see multi-week booking discounts of as much as 50 percent in the Caribbean, as has been the case this summer in the Mediterranean? It’s obviously too soon to tell, but it’s definitely not too soon to make a smart deal for a winter charter.

Editor’s Note: Kim Kavin is an award-winning writer, editor and photographer who specializes in marine travel. She is the author of six books including Dream Cruises: The Insider’s Guide to Private Yacht Vacations, is editor of the online yacht vacation magazine www.CharterWave.com, and writes the blog at www.BrokerageBoss.com.

I received an interesting e-mail from a reader about my discounts and deals post. I reported that I had heard some interesting talk on the docks at last week’s industry-only Antigua charter yacht show about discounts of more than 15 percent being a possible sign that something is wrong with a charter yacht or its owner’s finances.

In this reader’s opinion, that theory sounds wrong. He wrote:

“Maybe this is the economist in me, but I think the market dictates the price of a yacht charter. If your boat is not booked for a particular week, it is probably too expensive. There is a price that someone will book the charter. If that price covers the costs of the charter, plus costs for maintaining the boat, and a profit margin worth the time/effort to set up the charter, the owner should consider chartering. How much money is an owner going to make with his/her boat sitting on a dock? Zero. Think about it: If two boats were identical, who would not pick the less expensive charter? I might even feel more comfortable on the discounted boat that is chartering more because at least I know they are making some money.

“I think similar to the housing market, yacht owners (and maybe brokers in this case) are trying to keep profit margins of years past. Unfortunately, it will probably take a few years to return to those levels. If you don’t cut your price to levels that are selling today, your home and yacht will remain vacant. Maybe the owners of the discounted yachts are just savvy!

“I agree with you on the value of a broker but I am surprised there are not more charters being offered on eBay. To find the true value of something an auction is usually the best bet. If I was a boat owner, I would consider calculating the minimum cost I would accept for a charter, putting an unbooked week on eBay, and setting the minimum cost as the minimum bid. If no one bites, you sit and wait for better times.”

My Personal Two Cents

I would be curious to hear how longtime charter brokers feel about this reader’s opinion. Me personally? I would never, ever, ever book a crewed yacht charter through eBay or any other online auction service. My top three reasons:

• I don’t want to give my money directly to the guy who owns the yacht. I want a middleman with an escrow account and strong knowledge of maritime contracts, including those that cover itineraries crossing international boundaries (say, from France into Italy).
• You can’t smell an online listing. A lot of yachts look great in pictures, but when brokers actually go to inspect them, they stink. I trust a good broker who has been on the yacht far more than the guy who created the website full of pretty pictures.
• Price is not my deciding factor in what makes a great charter yacht. My number one consideration is a yacht’s crew. I would take an older yacht with a top-notch crew versus a new yacht with an unseasoned crew any day of the week. Again, crew is not something that can be accurately evaluated in an eBay listing. I want to know more than the crew’s resumes. I want to know how the captain has dealt with previous charter clients. I want to know how the captain has acted when problems have arisen during past charters. I want to know how the chef’s food actually tastes. No online listing can tell me those things in an unbiased way, since it is the yacht owner placing the listing. Only a broker who has been onboard and spoken with previous clients will have the real details, good and bad alike.

One more thing I’d add, regarding the idea of a yacht sitting idle because it is “overpriced”: That’s okay with some yacht owners. Private yachts are not hotels in Disney World. Owners don’t want anybody and everybody getting onboard for a charter. Many yacht owners are as diligent in vetting potential charter clients as the clients themselves are in vetting the yacht. Many yacht owners don’t need charter income. They offer their yacht to keep the crew busy and the yacht in good working order.

If I’m being honest, then I must admit that these points of mine sound awfully similar to what travel agents used to say about hotel and airfare bookings in the days before Expedia.com. And certainly, this reader’s opinions will be shared by many people who enjoy the ease of booking their own vacations online. The Web is changing the way all of us think about doing everything, including selecting charter yachts for vacation.