Cheap charter business?

[melandnick]

Hi All!

It’s been a while as Mel and I are just finishing our Caribbean cruise and will be back in the UK in a couple of weeks.
So I have a question and would very much like input (positive or negative).
We would like to come back to start a business and thought that a budget charter operation on or near the Solent, renting out small (22’ to 25’) and elderly yachts to people who would not normally spend the large sums required to charter a shiny Bavaria etc.
The boats would be well set up and tidy, Corribees, Achilles or the like with nice new upholstery, basic instrumentation, cooker etc....enough for a pleasant week of sailing and onboard camping rather than luxury chartering. The price would be less than a b+b and would give sailors a chance to experience a little of the cruising lifestyle, practice, make up some miles or simply potter about and catch a few mackerel.
I don’t know if this “rent a wreck” approach has been tried before in the UK but would love to know.
It seems a shame that the general public views sailing as the sport of the wealthy and it would be nice to be instrumental in introducing or encouraging sailing to as many people as possible.
Good idea or bad?

Thanks
Nick

 

[Bajansailor]

It sounds like an excellent idea in theory, but I think in practice you will find huge obstacles to overcome re getting these 'wrecks' coded as small commercial sailing yachts.
I hope I am wrong, but I am sure that Tranona will confirm / elaborate on this.

BTW, I hope you visited Barbados at some stage on your Caribbean cruise?

 

[sailorgirl]

We had similar thoughts when we arrived back in the UK ten years ago but based on a classic Baltic Trader gaff schooner. After six months of business planning, looking for a suitable boat etc the bank decided they could lend us a couple of million but not the few thousands or so we felt we needed - in other words we could set up a Sunsail-style charter business which would mean we'd never get afloat ourselves but couldn't be owner skippers of a single, allbeit large, charter boat unless we could fund the entire business ourselves.

In the end I looked for contract IT-marketing work to tide us over and fairly quickly we both found ourselves back behind the desks we'd vowed never to sit behind again.

Good luck with your venture though as I suspect there could be a demand.

 

[Doug_Stormforce]

It sounds like a nice idea. However a fleet of good condition yachts costs more to run than a B&b. IMHO if your target is to under cut or even match a B&B the numbers simply do not stack up.

 

[DownWest]

http://iroise-sailing.com/ Not the same thing, but an association of like minded people in older boats. In French, but you get the idea.
DW

 

[Deleted member 36384]

Jus do the numbers, the arithmetic should state that its not that good a business plan.

 

[rhinorhino]

Hi All!

It’s been a while as Mel and I are just finishing our Caribbean cruise and will be back in the UK in a couple of weeks.
So I have a question and would very much like input (positive or negative).
We would like to come back to start a business and thought that a budget charter operation on or near the Solent, renting out small (22’ to 25’) and elderly yachts to people who would not normally spend the large sums required to charter a shiny Bavaria etc.
The boats would be well set up and tidy, Corribees, Achilles or the like with nice new upholstery, basic instrumentation, cooker etc....enough for a pleasant week of sailing and onboard camping rather than luxury chartering. The price would be less than a b+b and would give sailors a chance to experience a little of the cruising lifestyle, practice, make up some miles or simply potter about and catch a few mackerel.
I don’t know if this “rent a wreck” approach has been tried before in the UK but would love to know.
It seems a shame that the general public views sailing as the sport of the wealthy and it would be nice to be instrumental in introducing or encouraging sailing to as many people as possible.
Good idea or bad?

Thanks
Nick

Probably a bad idea, for a number of reasons.

Mooring costs in the Solent are extremely high, you would need a sizable number of berths all together with car parking for customers and on-shore storage, costs for a 25' boat are not significantly less than that of a 36', the charter fee is. Port Solent quote £3,500 (ish) for 25' and £5,200 for 36'.
Fixed costs, staff, advertising, Sea-Start etc do not decrease because you are chartering a smaller boat.
Coding difficulties with a smaller older boat.
Insurance costs.
Likely high maintenance bills for older boats, cheap charter does not translate into cheap sails, radios etc.
Insufficient cash flow to replace the fleet.
Charter bookings in the Solent are mostly (not exclusively) weekends so the fleet will not be chartered most of the time.
Basically the numbers do not add up, at B&B prices say £50/night, a boat might generate say 100 days charter a year, a total that offers only slim pickings.
There are lots of Charter businesses in the Solent, if it worked they would have done it already, if by some chance they hadn't thought of it and it did work they would jump in and swamp you.
Years ago, I looked at this idea, inspired by rent a wreck car rental but the numbers don't add up as a business plan.

 

[Long John Silver]

Don't Sunsail already do that?

 

[photodog]

In a nutshell all your fixed costs, staff costs, and day tomday maintanence will be the same as for larger boats... There may be some savings on the boats... But in fact a lot of charter oeprators dont operate their own boats.. But the price per berth for hiring the boats will probably be more than for a 36 or 40 footer...

Something more viable may be to set up a specialist firm chartering small boats that are owned by others... So, find a number of moorings... With a deep water landing stage... And then find 10 or so owners with small boats who want to charter... And go in that way... But dont go into a marina.. Go to someplace like wicormarine and get a good big tender to ferry charterers about...
So keeping your moorings cheap, dont own the boats, and then here is the kicker...

Yu charge a small premium... Yu target owners of high quality very nice small boats and you give excellent personal service concentrating on the traditional apsects of the experience...

Dont go budget... Its small boats, but that doesnt mean cheap. People want something special...

So think Hr 29, small plastic gaffers, first 27.7, rustler 24, immaculate small classic boats...

 

[PhillM]

I have not done the numbers so cannot comment on profitability but I DO think its a good idea and there is a market.

I never planned to buy a boat. Was just going to get my day skipper and then charter. I changed my mind when:

1) I realised that I needed to get experence on a boat that I could handle virtually alone - because while I have family with me they dont have any experence.

2) Cost of a weekend charter - four weekends = owning my own boat.

Perhaps the sail-time fractional ownership business model would be a better way to go? Currently these all aim at new larger boats. Perhaps there is space in the market for smaller, older boats at a much lower monthly cost?

As I say, I have not done the numbers but I think you could be on to somthing by providing access to a familier, easily handled boat at a reasonable price.

 

[capnsensible]

I can tell you a bit about it from my own experience of doing the same for a couple of years when Haslar Marina first opened.

We had our own boat, plus operated as managing agents for up to ten other yachts, none over 33 feet and all not new.

This was the early days of the code of practice and we very quickly learnt how to go about it to high standard but without costing the earth. Practice!

Cheap prices and high turnover was the aim. We got plenty of charters but it was hard work for not a lot of reward. It was a life of constant cleaning and maintenance with small chance of sailing. Really enjoyed it for a while, but it did wear off a bit.

Eventually, we followed the route of new bigger yachts like the rest of the herd. Made far more money, but the fun bit went.

Left and went cruising!!

 

[maxi77]

I think the cost of coding has pretty well done for this market. I used to charter things like Centaurs and other 25ft boats when I was a lot younger and they were easy to find. Now finding anything less than 30ft seems difficult in the UK.

 

[snowleopard]

Been there, done that. I owned 3 Sonatas which were chartered out of Dartmouth. It was a good way of losing money.

The biggest problem was that it was run through an agent and he put little effort into marketing it so the revenue was low but the fixed overheads didn't stop when they were sitting idle.

What really killed it was a change in the coding rules so that the boats were no longer allowed to go more than IIRC 15 miles from base which meant Salcombe one way and Torbay the other.

In the end I smartened them up a bit and sold them individually, making enough on the sale to recoup my losses on the running costs. The experience was always intended to be a dip-a-toe-in-the-water exercise to see if it was a good idea to get out of IT and move into a boat business. In the end I decided to keep going in my trade and use the proceeds to build a boat and go cruising at no one's beck and call. It turned out to be the right decision.

One other hint - the agent told me that it was next to impossible to charter a boat that didn't have a well-known name. Punters would always choose a Beneteau over say a Chesapeake Oyster which might be vastly superior but they wouldn't risk a boat they'd never heard of.

 

[Sailfree]

I have had 3 boats on charter from new in the Solent. I know of others that finally sold their boats as once they got to 6-7 yrs the maintenance costs get too high.

I wish you luck but suspect the fixed costs in the Solent and the coding/maintenance costs would be too much.

Might work from a cheaper base and for holidays hence longer charters but english weather might kill that!!

If I was starting again now -I would not enter the charter business.

 

[DaveS]

You've had lots of experienced advice which I certainly can't compete with, but I would make one suggestion: why base your business on the Solent? You'll get all the downside of high costs and crowding and a limited range of places to go. If it was me, I'd go for a Clyde base: sheltered water, good scenery and perfectly sized for a week: lots of places to go without ever being too far away from base. Good transport links too, and the natives are friendly.

 

[Tranona]

Hi All!

It’s been a while as Mel and I are just finishing our Caribbean cruise and will be back in the UK in a couple of weeks.
So I have a question and would very much like input (positive or negative).
We would like to come back to start a business and thought that a budget charter operation on or near the Solent, renting out small (22’ to 25’) and elderly yachts to people who would not normally spend the large sums required to charter a shiny Bavaria etc.
The boats would be well set up and tidy, Corribees, Achilles or the like with nice new upholstery, basic instrumentation, cooker etc....enough for a pleasant week of sailing and onboard camping rather than luxury chartering. The price would be less than a b+b and would give sailors a chance to experience a little of the cruising lifestyle, practice, make up some miles or simply potter about and catch a few mackerel.
I don’t know if this “rent a wreck” approach has been tried before in the UK but would love to know.
It seems a shame that the general public views sailing as the sport of the wealthy and it would be nice to be instrumental in introducing or encouraging sailing to as many people as possible.
Good idea or bad?

Thanks
Nick

Bad idea! No market. People who charter boats want a big comfortable boat they can't afford to buy and can take a big enough crew to share the cost. As others have already said you will be killed by coding requirements and the cost of berthing/maintenance and marketing.

Think about it from a potential client point of view. Would you pay, say £500 a week for a 40 year old boat that will take two or maybe 3 people, or would you pay £1500 a week for a newish 36 footer that will comfortably take 5/6 people and be capable of "proper" cruising? If you want old boat sailing you can buy such boats for a few thousand, keep on a cheap drying mooring and get all the use you can manage. Alternatively there are many other opportunities for non boat owners to get experience or occasional use with clubs and syndicates.

 

[melandnick]

Hi and thanks for the posts.
It is unfortunately not practical for us to look into the costs until we get home but once back it will be an interesting exercise to draw up a business plan.

Bajansailor: Sorry, went straight to Grenada otherwise would have said “Hi”. Friends that stopped at Barbados said good things so.....next time.
Sailorgirl: Shame your idea didn’t pan out. Wonder if the banks would still be so happy to part with big sums for a large charter business.
Doug: True, but initially a lot less to buy than a fleet of B+Bs. By the way, we did First aid, VHF and sea survival courses with you guys before we left and were very impressed and would recommend to anyone......any room for competition in your sector 
Downwest: Interesting site.
Old boots: Working on it.
Rhinorhino: Thanks for the detailed response. Sounds like a lot of points against but I suspect that by moving venue, using moorings etc the costs could be kept under control. I think the first thing we need to understand is how coding will affect us and I am about to ask that in a separate post. I agree that it’s unlikely that we will make a fortune at this type of business but a living would be OK. The alternative is heading back to London and money and the comfort trap....not a happy thought.
Long john: I recon you are right LOL
Photodog: Hadn’t thought of this idea so will give it some consideration. Cheaper venue may well be the way forward though.
PhillM: We agree with you Phill but will know better once we have crunched the figures on our return to UK.
Capnsensible: Thanks for the benefit of your experience. From what you say it is feasible and though I understand that it will take a lot of the pleasure out of sailing for us it is still preferable to three and a half hours a day on the train heading to brain death in London.
Maxi77: Thanks, we need to understand exactly what the coding requirements are. I agree that finding suitable boats will not be easy but a couple of years ago we looked for a friend and found that there are still some lovely small boats about.
Snowleapard: Thanks for the reply. Hopefully your biggest problem should be sorted by marketing direct with a decent web site. One would then hope that word of mouth would add to business eventually. Coding sounds like the biggest potential stumbling block.
Sailfree: Thanks, we will look at other areas and see if that’s going to balance the books.
DaveS: Thanks Dave but the Clyde is a bit far from home for us but there are certainly plenty of alternatives to the Solent on the South coast.
Tranona: I hear what you are saying but personally, having chartered a small boat with others, I disagree. I would much prefer to charter a small boat with Mel than share on a bigger boat and I suppose we are chasing a niche market and need to work out if it is big enough and if so then how we could structure the business so we can make a living.

Thanks to all who responded and please keep the comments coming. We will be back in the UK very soon and will have some time to look at the numbers. It may be that it doesn’t add up in which case please feel free to suggest a watery alternative.

Thanks
Nick

 

[colhel]

You've had lots of experienced advice which I certainly can't compete with, but I would make one suggestion: why base your business on the Solent? You'll get all the downside of high costs and crowding and a limited range of places to go. If it was me, I'd go for a Clyde base: sheltered water, good scenery and perfectly sized for a week: lots of places to go without ever being too far away from base. Good transport links too, and the natives are friendly.

I like this idea, as a boat owner on the South Coast, trying a new cruising area without having to transport the boat is quite appealing

 

[DaveS]

I like this idea, as a boat owner on the South Coast, trying a new cruising area without having to transport the boat is quite appealing

Well, that was part of my thinking. There's such a large population of boats kept on the South Coast with owners who, after a few years, must have been everywhere there is to go in the area several times over so that an attractive fresh venue must have appeal. (This point does not apply only to the South Coast; I moved away from the Forth after a few years for just this reason.) I think the point about smaller boats easily handled by a couple makes sense too.

 

[rhinorhino]

Moorings, may not cut costs as much as you think, you will need a large rib /work-boat with reliable crew, shore facilities for landing as well as maintenance etc. and it will multiply the amount of work out of all proportion.
Transfers to from a rib to a small yacht are also fraught with hazards.
But mainly, charters will hate it, they will all arrive back at the same time on a Sunday afternoon and they will not want to wait an hour while you unload another party.
Also, no shore power and no water makes cleaning and routine maintenance on the boat very difficult. Even at the bottom of the market charters expect certain things, hence the popularity of marinas over moorings.