Features of earning on renting your yacht
Denis Korablev
  • 02.11.2021
  • 2,284

Features of earning on renting your yacht

In Russia, a yacht is associated with successful and rich people, it is perceived as something more than an expensive toy. In England, the proverb is widespread: "A yacht is a hole in the water, surrounded by a tree, where money should be thrown." Partly true, but that doesn't stop anyone; it is known that the British acquire almost 50% of all yachts in Europe. The global yacht market in 2019 was estimated at $ 43 billion, and according to experts, it will grow by 5% annually by 2026.

Ten years ago, an exotic vacation on a yacht was available only to people with great financial capabilities. Today, middle-class people can also afford this pleasure. Spending a week on a yacht with access to the sea will cost about 700 euros per person, which is quite comparable to staying in a hotel, and there will be many times more impressions! Many large enterprises have at least once been involved in organizing a sea voyage for important clients, and sometimes business regattas with the involvement of partners.

In Russia, there is a division of commercial yachting into 2 types: for external tourism, to relax abroad and for internal. The main problem of the Russian yacht rental market is the underdeveloped infrastructure. For the owner, the maintenance of a yacht is expensive, especially for an elite one. Soon he realizes that there is neither time nor desire to cut the waves under sail every day; periodically the ship is forced to stand idle. The most resourceful realized that the yacht is a good investment asset. It is difficult to get passive income from it, but making money on tourist-tenants using the "tailwind" is great.

Yachts with a length of 50 feet are willingly rented for weddings, anniversaries, photo shoots, and important negotiations. The cost varies from 15,000 to 100,000 rubles / hour, provided that the minimum order time is 3 hours. In Europe, the cost of renting a sailing yacht is from 1.500 euros per week.

Charter companies report that 14,000 yachts are rented in the Mediterranean alone and almost 70% of them are privately owned. According to a survey of participants in the commercial sailing boat rental market, during the first five years of operation, the owner can expect to receive an income equal to 15-20% of the purchase price of the boat, and later it will decline significantly. Then it is worth repairing the yacht, which will require money, and try to sell it. If we manage to take 60-70% of the initial price, then the deal can be called successful.

The owner's net profit (for 5 years) will be about 25% of the money spent on the purchase. However, it will take a lot of effort to make the theoretical calculations a reality.

Choosing a yacht

They usually rest in companies (6-8 people), so it is better to consider purchasing a yacht with a length of 40 to 50 feet. These models are versatile, they are rented to participate in regattas, as well as for sea cruises. Most popular Dufour, Hanse, Bavaria Cruiser, Beneteau Oceanis. The cost of purchasing such a vessel will be roughly between 150,000 and 200,000 euros.

When thinking about purchasing a new yacht, you can act through friends working in a charter company; manufacturers often provide them with substantial bonuses, reducing the price by 40 or even 70%. Probably, you will receive at least part of the discount if you voice your immediate intention to transfer the sailing vessel for temporary use and back it up by signing an agreement. Some charter companies advise to make a joint purchase, then the owner receives 50% of the yacht rental, and the company pays the costs of maintenance, insurance, parking and others.

If you are planning to buy a yacht "hand-held", use the services of a surveyor. For a fee, an appraiser will provide you with a detailed report on the condition of the vessel, indicating defects that you might not have noticed. Make a list of the flaws, analyze the time and money spent on fixing them, and start bargaining persistently and systematically. Chances are, an owner looking to sell a boat will compromise and you will receive a reasonable discount.

The owner of the yacht will be able to receive 3-5% of the profit if it "works" for 23 weeks (minimum period) per year. Only reputable charter companies with a good reputation will be able to fulfill this condition. Small companies are not able to provide a continuous flow of tenants and are trying to shift all risks onto the shoulders of the owners.

On the Mediterranean coast, the largest and most reliable charter companies are:

  • Greek Istion Yachting, Nomicos;
  • Croatian Croatia Yachting;
  • Spanish Alboran Charter;
  • Italian Sailing Race Service.

Enterprises that have additional bases have a significant advantage, for example, in the Canary Islands or the Caribbean. The Spanish company, for example, bases yachts in Cuba, Tenerife, which attracts tenants.

Charting a course

The Mediterranean is a wonderful territory for the yacht charter market, suitable in all respects. In the Caribbean and Southeast Asia, there is no reason to stable profits due to logistics difficulties. The most popular sailing holidays are in Spain, Greece, Montenegro, Croatia, as these countries combine good infrastructure with transport accessibility.

When choosing the basing conditions, one should take into account whether they correspond to the types of activities of the developed business plan. The above countries are suitable for sea recreation (family or corporate), and navigational training requires a complex water area with islets, a sufficient number of harbors, and deployed ship traffic. If the main goal is regattas, then it is more logical to choose the base on the islands of the Mediterranean Sea (for example, in Mallorca), then it will not be difficult to reach the place where the race is planned.

Turkey, until recently, was also popular with tourists, but after several terrorist attacks in the country, the charter industry suffered significant damage. Half of the yachts that were based in Turkey left the waters and changed their berths.

For yacht owners, the main problem is the extension of the tourist period. Usually yachts "work" no more than six months, a massive influx of tourists is observed only from May to October. Many owners are trying to take their ships to the Atlantic for the fall / winter season. Some companies, in order to continue the season, ferry their sailing fleet to the Caribbean Islands or form teams from amateur athletes to participate in long regattas. Thanks to this, in a calendar year, yachts can provide profit to their owners for ten months.

Looking for customers

The next question is extremely important - it is the occupancy rate of the vessel. The yacht market is now quite saturated, it is becoming more and more difficult to attract new clients. Small companies are competing, whose goal is to raise at least a little money in order to compensate for their yacht maintenance costs.

Regular customers provide stable profits, but keeping them requires some ingenuity and some flexibility, changing the direction of the lease: boat trips, training at a navigation school, solving organizational issues for participation in races. Experts advise to develop a sales system in order to generate regular profits, and constantly offer the same customers something new.

The most difficult thing is to organize a regatta, since it will bring good money only if at least ten yachts participate. You need to thoroughly immerse yourself in logistics, although it seems to an uninitiated person that everything is simple: money has been paid, people have arrived, distributed among the yachts and - chic, brilliance, beauty!

In fact, to create a constant flow of customers, you will have to work hard and hard on land and sea, and on the Internet. Nowadays, almost every company has its own website, maintains a blog, creates communities; this is interesting, but difficult enough. Only a serious approach to business will provide profit!

Listening to expert advice

Decide from the start if you can handle the project in person? It will not work to combine commercial yachting with any main job; it is better to immediately invite a manager. A responsible team will provide the maximum profit for a startup, and it is quite difficult to organize it. According to our experts, everything will be fine if we can find sailors with excellent technical skills willing to be at sea, far from family, for a long time. And if not, then it will be safer to invest free capital in real estate; at least it will not disappear into the depths of the sea and does not require additional investments of tens of thousands of rubles every year.

It is much easier to register a company in the country where the yacht is planned to be based. There are differences in the taxation of companies in the EU countries, but the tax burden on yacht owners is almost the same. Malta and Croatia provide tax incentives for charter companies; which allows the VAT to be reduced to 13-15%. True, you will have to pay more than one thousand euros for registration services, but later, when buying a yacht, you can save on taxes.

When doing business planning, you need to reflect the estimated costs in full. If you plan to rent a yacht for a cruise vacation, then you need to lay 5% of the initial cost for minor repairs and maintenance during the year; to participate in races - this amount should be increased to 10%.

Assess in advance all the risks of scaling your business. Even if everything goes according to plan and the profit suits you, think three times, is it worth buying a second and subsequent yachts? As the specialists of 2yachts note, when buying a second yacht there are 4 times more problems. You can expand if you are 200% sure that everything is really ready for this. Many companies lose profitability at this stage. Often, the profit that one ship brings is "eaten up" by the content of the second.

You should develop a specific plan for attracting customers, preferably regular ones. The promotion system needs to be developed, even if this yacht is the only one. Good results are obtained by SEO specialists in search engines and social networks, and corporate sales are just a fairy tale!