Sans Bateau
Well-Known Member
Here in Port Hamble, mid July FairView have about 16 new yachts tied up, should they not be out this time of year? 
Chartering looks bleak
- Thread starter Sans Bateau
- Start date
KellysEye
Well-Known Member
When LateSail set up in 1999 selling discounted late availabilty yacht charters the large companies bit their hands off. They were desperate to discount further through a third party. When the first Greek charter company signed up the word spread and twenty other Greek companies called in and signed up within a week.
They approached all the main UK companies who turned them down. I'm not surprised the UK charter companes are in trouble they have no idea about marketing only sailing and (not) selling at full price. The charter market is the same as airline tickets if you don't sell today you won't get the revenue tomorrow, hence their discounting.
They approached all the main UK companies who turned them down. I'm not surprised the UK charter companes are in trouble they have no idea about marketing only sailing and (not) selling at full price. The charter market is the same as airline tickets if you don't sell today you won't get the revenue tomorrow, hence their discounting.
capnsensible
Well-Known Member
'Discounting' means you are overpriced to start with in a lot of businesses.
Try this view:
http://www.businessweek.com/smallbiz/content/aug2009/sb20090814_425078.htm
Try this view:
http://www.businessweek.com/smallbiz/content/aug2009/sb20090814_425078.htm
Sailfree
Well-Known Member
Your comments are made with a complete lack of knowledge or experience of the UK charter market. It makes no sense to sell a charter today at a price that hardly covers wear and tear??
At present few owners of charter boats in the UK recover their costs. I changed from a 38' boat with good sailing qualities to a 43' deck saloon to try and catch more of the corporate market and get less wear on the boat. Keen sailors were chartering the 38' but taking it out in all weathers and consequently high wear and tear and insurance claims after a knockdown. The economic downturn effectively killed off the corporate market.
When I started chartering in 1998 it was just viable but the IR soon sorted that out and had I not already commission my most recent boat I would never dream of staying in the charter market. In spite of the weather my bookings are higher this year than last but I will still be effectively subsidising the running cost of the boat. The full bill for wear and tear will hit later either in resale value or repairs!! The UK charter company that my boat is with have had no new boats in the last 4yrs.
High overheads, berthing costs for a 43' is £11,000 at MDL in the Hamble, the IR and finally UK weather will ensure that chartering in the UK will soon have a declining number of available boats.
Even though I have my own boat for many years we have chartered in Greece and Croatia so that we can be more certain of the weather and a pleasurable holiday. Working ensure no flexibility when I take a holiday.
At present I will continue to charter until I retire and have more time to use the boat myself. So far this year we have not even managed to race our 16' Dinghy!!
Just bought lots of new rope to replace worn running rigging. Frankly I prefer my boat not to be used, have less wear and tear than reduce the charter charges.
The UK charter market only still exists because of dreamers with little idea of the actual costs. Fortunately most are professionally successful enough to be able to afford a new boat even if they lack the financial judgement to correctly evaluate the actual charter return v costs!
Its the old adage to get a small fortune out of sailing start with a big fortune!!
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Seajet
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I can think of a large charter outfit in the Solent who take the opposite approach, loads of marketing inc fancy stripes, sails with logos and 'corporate events', but the lot of them working together couldn't sail their way out of a wet paper bag, as experienced locals know; on sight of this lot approaching it's a case of "Red Alert - Shields Up, Stand By All Fenders " !
Resolution
Well-Known Member
Powerful words. Care to share with us your experience of chartering or related business?
KellysEye
Well-Known Member
>Your comments are made with a complete lack of knowledge or experience of the UK charter market. It makes no sense to sell a charter today at a price that hardly covers wear and tear?
The charter market is the same the world over. No charter company sells boats at a price that doesn't cover costs including wear and tear, repairs, marketing and admin costs. They have been kown to sell at break even to keep the cash flow going.
>Powerful words. Care to share with us your experience of chartering or related business?
Chartered two to three time a year for over 20 years, from the Seychelles, to the Bahamas, including most of Croatia, Greece and Turkey, Malta, Corsica and Sardinia and the Caribbean from Puerto Rico to Grenada.
I started a Web design company and came home one day saying effing clients you tell them what to do and a year later they say they wish they had done what I said because their competitor has done it. Jane said if you are so clever why not start a Web business, so we did.
Jane and I came up ith the concept of LateSail based on the business model of airline bucket shops. We had seen boats still on the dock when we returned so it was an obvious market.
We have no day to day involment with the company now and have sold/are selling most of our shares.
The charter market is the same the world over. No charter company sells boats at a price that doesn't cover costs including wear and tear, repairs, marketing and admin costs. They have been kown to sell at break even to keep the cash flow going.
>Powerful words. Care to share with us your experience of chartering or related business?
Chartered two to three time a year for over 20 years, from the Seychelles, to the Bahamas, including most of Croatia, Greece and Turkey, Malta, Corsica and Sardinia and the Caribbean from Puerto Rico to Grenada.
I started a Web design company and came home one day saying effing clients you tell them what to do and a year later they say they wish they had done what I said because their competitor has done it. Jane said if you are so clever why not start a Web business, so we did.
Jane and I came up ith the concept of LateSail based on the business model of airline bucket shops. We had seen boats still on the dock when we returned so it was an obvious market.
We have no day to day involment with the company now and have sold/are selling most of our shares.
Sailfree
Well-Known Member
KellysEye;3652714The charter market is the same the world over. No charter company sells boats at a price that doesn't cover costs including wear and tear said:
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KellysEye
Well-Known Member
>In the UK the charter companies rarely own any boats
Sunsail and the Moorings and many large Greek companies don't own most of their boats, they are privately owned.
>It is not the same the world over and your brief resume of chartering demostrates that you have no experience of the UK charter market as I stated.
I would suggest again it is the same the world over because Sunsail and the Moorings have fleets all over the world. I don't have experience of chartering in the UK and don't need to have experience to make the comments I have because of the above. But I did contact the companies and was staggered by the lack of business acumen.
Clearly you haven't chartered abroad or seen the company ads for boat purchase schemes by the big companies.
> As such their cost is not wear and tear but staff, office and advertising.
You said it was, now you are saying it isn't.
>costs incl wear & tear.
Then you said it is. Please make your mind up.
Sunsail and the Moorings and many large Greek companies don't own most of their boats, they are privately owned.
>It is not the same the world over and your brief resume of chartering demostrates that you have no experience of the UK charter market as I stated.
I would suggest again it is the same the world over because Sunsail and the Moorings have fleets all over the world. I don't have experience of chartering in the UK and don't need to have experience to make the comments I have because of the above. But I did contact the companies and was staggered by the lack of business acumen.
Clearly you haven't chartered abroad or seen the company ads for boat purchase schemes by the big companies.
> As such their cost is not wear and tear but staff, office and advertising.
You said it was, now you are saying it isn't.
>costs incl wear & tear.
Then you said it is. Please make your mind up.
prv
Well-Known Member
The first quote referred to the charter company's costs. The second referred to the boat owner's costs.
I don't know which of you is right, and I don't really care, but the least you can do is argue each other's points accurately.
Pete
KellysEye
Well-Known Member
>The first quote referred to the charter company's costs. The second referred to the boat owner's costs.
To be precise wear and tear is a cost that goes on a balance sheet (company) or tax return (personal) and is tax deductible. Both the same really.
To be precise wear and tear is a cost that goes on a balance sheet (company) or tax return (personal) and is tax deductible. Both the same really.
prv
Well-Known Member
I have no idea what that's supposed to mean, and I don't really want to be drawn into your argument. I was just trying to correct your apparent misunderstanding of Sailfree's post.
He referred to one group (charter agencies) who do not have to pay for wear and tear, and another group (owners of the boats they arrange charters of) who do have to pay for wear and tear. You took the fact that "not paying" and "paying" appeared in consecutive sentences and used this to imply that he was confused, while ignoring the fact that they referred to two different groups. I don't know whether you did that on purpose or by accident, but either way your implication was incorrect.
I'm out.
Pete
Sailfree
Well-Known Member
Be careful. I only did my accounts in accordance with a chartered accountants advice. It finally cost me £10,000 when the IR did a "limited" enquiry. A "full" enquiry I was insured against and the IR are aware of this so they make it as difficult and financially punishing to the individual to fight against their position - hence my comment that the IR finally finished any profitability.
As a company wear & tear is easier to claim as an individual you cannot dislodge the IR attitude that you are a rich bugger who could only afford a large boat by avoiding paying the correct income tax and now you are trying to finance your boat owner pleasure by pretending to put it out for charter.
Its no use going into details as we will get bogged down with thats not fair or thats not legal but just accept the above comment as the IR attude and you won't go far wrong in how they treat you in the UK. As I previously stated there will be a diminishing supply of UK charter boats due to lack of profitability in the UK and reducing the charter rates will not help that. Do you think Fairview do not have already priced it down to the minimum to be worthwhile!!
Sorry the above info does not fit in with your late sail web idea but just consider that perhaps the UK charter companies all did know their business better than you and hence their unanimous reply. You can't be right all the time!
PVR is correct in his clarification. Chartering in the UK wear and tear is the boat owners cost against the 60% charter income. Try to back claim for a new engine though when it has been worn out through previous years charter use can be difficult if you can't show a profit that year to charge it against.
I repeat charter boat ownership does not stack up in the UK and reducing the charter fees just results in the loss/subsidy from the owner becoming bigger.
In other countries the extended charter period makes it a different market.
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lustyd
Well-Known Member
Just to clarify, the IR changed the rules to stop people fraudulently claiming parts for "charter boats" which were in actual fact private boats with charter adverts on the internet. I suspect that if your boat still genuinely gets used enough to be a genuine charter boat which is run as a business then taxation will be easier. In order to do this, discounting would help because the boat would be used more often and therefore look much less like a tax dodge.
toad_oftoadhall
Well-Known Member
I was told four charters a year to different parties is considered enough by HMRC.
lustyd
Well-Known Member
lustyd
Well-Known Member
Here in Port Hamble, mid July FairView have about 16 new yachts tied up, should they not be out this time of year?
Fair view is at the higher end of the charter market (i.e. expensive). I'm curious to know whether the rest of them are also doing badly.
Sailfree
Well-Known Member
I get plenty of charters but I don't want the cheap ones. I don't want to advertise on here but most people who want one of the better quality boats know and go to the company I am with and get a better equipped boat that is clean and better prepared. There is competition but the charter company decided to trade on its quality boats rather than "bare" boats and bucket shop prices.
Problem comes with costs v income as after a few years the IR look very hard at whether you are trying to make a profit and frankly those that just have a website and a few charters will not get away with it for long. The IR have purges on certain sectors of the industry. Charter boats were in 2004/5 Dentistry in 2005/6 etc and it will come round again.
Real problem comes when boat is older and needs more spending on it and that is disproportionate to Income. IR can just state it is not a viable business and disallow losses. IR will do that if they suspect it a private boat pretending to be available for charter. There may be the odd one still getting away with a couple of charters but even that is uneconomic if you add up the cost of the coding resurvey, annual liferaft service, lifejacket service and gas safe certificate. I suspect they must be also cutting a few other corners as charter coding imposes its own extra boat ownership costs.
In normal economic times my charter company would now be "speaking" to me about "its time to get a new boat" but as there are no/few? idiots now buying new boats to put out to charter they are happy to keep mine but maintenance costs are increasing and engine /batteries will be soon. Sails and new upholstery was a couple of years ago.
Problem comes to those that are genuinely trying to run a business in difficult economic times. As I stated I targeted in 2004 the Corporate market that has since disappeared. I sold the 38' to a person who has kept it on the charter fleet and it has done well with keen sailors that enjoy going out in bad weather. I have to put my recent charter decisions into the same hat as keeping my ISA's of Euro shares and buying Euros for next Xmas family holiday at €1.20. So if I ever offer business advice - do the opposite!!
Sailfree
Well-Known Member
Fairview are also victims of their position. At Port Hamble a 40' I expect to cost circa £9k to berth. At 60% to the boat costs ratio (40% office/staff/advertising) you have to turn over £15k just to break even on the berthing. Annual coding costs, extra charter insurance and I think you get the picture.
Obviously cheaper to charter outside the Solent but its supply and demand wherever you are and the solent used to be V attractive to city workers with a fast train down on Friday afternoon for a weekend charter.
maxy
Well-Known Member
We run a charter company based in the Med and I hear what you're saying about costs and age. We believe a new yacht has a 'golden period' of 5-7 years depending on type.
All our owners are more than covering costs and netting considerably more than putting the money on deposit.
As for new yachts, a third of our fleet are new this year, so there is money and good investment potential for those that approach it professionally.
Coding is a pain from a cost and competitive point of view against foreign yachts, but it is also good from a charterer's peace of mind perspective. There are many poorly managed and maintained yachts in the Med, who suffer a lack of respect from clients on their yachts because of their condition, and so they deteriorate more. Those same clients won't come back, so the operators start to discount and cut maintenance to bring in the money, a terminal downward spiral begins.
Our owners, are owners and rightly expect their pride and joy to be in perfect condition when they come to use their boats. It does disappoint me when I read on forums (not just here) about how hard individual can 'hit them for discount' as the charter company will be desperate for the money. How would they feel if they put their hand in their pocket to buy a yacht. Is the industry struggling in the global situation? Not us, we already have over 50% of our annual bookings in now, and without slashing the price, the rest will come in through the season. We are already experiencing clients who cannot find a yacht for June and September and we are only in mid Feb. Many agents (as opposed to operators) only have price as a weapon in their arsenal, and give the wrong impression about availability in order to attract clients. We avoid using agents, as they are mostly inept, lazy and only interested in their commission not in the clients quality of holiday. So don't be surprised when a good operator will not discount, it should be up to a standard not down to a price, after all why would you want to be disappointed with your hard earned holiday time.
As I read on another forum, 'it's getting difficult to find the operators with all the internet agents' true, but they are out there.
Have a good sailing season.
Kevin