Offering your luxury yacht for charter allows you to generate revenue from charters while still cruising aboard at your leisure. Northrop & Johnson’s impressive charter fleet comprises the world’s most opulent luxury yachts, overseen by experienced professionals dedicated to ensuring maximum bookings and exposure for your luxury yacht.
What are the benefits of putting your yacht on the charter market? How much does it cost? What are the steps you need to take to make it happen and ultimately successful? Northrop & Johnson’s Head of Video Production and founder of famed YouTube Channel “Yachts for Sale,” David Seal sits down with Northrop & Johnson Senior Charter Manager Adam Fitzmaurice to compile a complete guide on how to charter out your yacht.
“Why should somebody put their yacht on the charter market?” asks Seal.
“There’s a lot of benefits to chartering out your yacht,” explains Fitzmaurice. “The first one is purely a business decision to help offset some of your operating costs. From a day-to-day operational perspective, there’s a lot of advantages; boats like to be used and moved.”
In addition to keeping the gears of your yacht moving during charters, having guests aboard also will help keep the yacht’s crew sharp…and likely happy charters often mean tips. Lastly, putting your yacht on the charter market means revenue for you.
“[Speaking of crew], do you think [they] enjoy being on a charter yacht?” asks Seal
“As ex-crew myself, I loved chartering. I think you get that day-to-day challenge; you meet new people and new families. You get to see the vessel being used in a whole different way, different locations that the guests enjoy. You get to use the toys yourself and really showcase what the vessel can do,” answers Fitzmaurice.
Yacht compliance code
There are a few things to consider when deciding to set your yacht up for charter. The first step is to think about whether this is something your vessel can even do. For some yachts to charter, they must be moved into commercial status, but your broker will work with you to decide what is best for you and what is necessary to do for legal reasons. The insurance and flag state requirements can be worked out with help of the captain or yacht operations manager if the vessel has one.
“The main driving factor for the rules that you need to follow is flag state,” states Fitzmaurice. “So depending on who you’re flagged [with], the first step is to invite them aboard, and they’ll do what they a call a pre-survey. They’ll come and check on the [potential commercial compliance] the yacht…then there’s a financial evaluation. Is it worth the investment to bring the vessel up to commercial code? Once you get over the paperwork side, then you get into the fun bit.”
Success relies on the team
Once your yacht is in the clear to be used for charter, the next step is to find a charter manager. Your Northrop & Johnson charter manager is the facilitator of your yacht’s success in the charter industry. A strong relationship between you, your charter manager and the captain is paramount for a seamless charter experience.
“We’re in the relationship industry. Whatever element of yachting you’re in, it’s all about the relationship. We very much look to build a rapport with our clients. It’s essential that everyone understands successful charter management relies on a successful team. I’m a great believer in that relationship between the charter manager, the owner and the captain being very strong and understanding where we’re all coming from,” explains Fitzmaurice.
“Can you give me some examples of [what you mean when you say] understanding where we’re coming from?” asks Seal.
“If we’re trying to be a very busy charter yacht, how are we placed in the market? What’s our commercial aspiration? Are we sitting price-wise in the middle, or are we going to sit at the top? By having these high commercial aspirations, perhaps we need to be less strict on certain requirements,” answers Fitzmaurice.
Your N&J charter manager will guide you through curating a charter program that best fits your needs and meets your goals. Some owners are happy to have a lot of kids, even dogs on occasion, while others are more selective with who they allow onboard. Charter managers have those detailed conversations with charter yacht owners to fully understand what they want to get out of this process.
“The foundation of Northrop & Johnson has always been about families, family charters and family experiences. We always try to put ourselves in the owner’s shoes,” states Fitzmaurice.
Marketing your yacht
Offering your yacht for charter allows for worldwide recognition on the charter market. Your Northrop & Johnson charter manager can assist in curating a brand for your yacht and maintaining a stellar reputation.
“Call it a product, or a program or a brand because essentially that’s what it is. You’ve got to have a product you’re incredibly proud of,” states Fitzmaurice.
Another fantastic benefit of chartering your luxury yacht is crew satisfaction. Chartering helps keep your crew on the ball, utilizing their skills for different groups of people with different wants, needs and standards when you’re not aboard.
Seal asks, “what about the crew? In your experience, how much impact does that have on a successful charter?”
“Crew is the most important element in chartering, hands down. The crew make the trip. The more dynamic, fun and hard-working, the better. I always think if I was on vacation and I knew my children are being entertained by some fun crew, and the people serving me and around me are enjoying themselves and have a real passion for what they do, it truly is the most important element of a successful charter program,” answers Fitzmaurice.
Crew that provide endless hours of entertainment and bespoke, five-star white-glove service to charter guests make it worth the investment. Good crew go above and beyond; they host themed dinners, barbeques and operate all water toys for guests. Employing a fun, energetic crew who can cater to a multitude of different types of guests will set your yacht apart from others in the charter fleet.
“What kind of costs can the owner expect once the charter program starts?” asks Seal.
“Here at Northrop & Johnson, we’re proud to say we offer all [videography and photography] in-house, and after that, the only real costs are when business is booked. The costs associated are quite simple: 20% commission paid on gross charter fee (15% to booking broker and 5% to charter management), upkeep of the crew [and] investing in the newest trends in toys. Apart from that, there are really no day-to-day charter management costs,” states Fitzmaurice.
Northrop & Johnson works hard to maintain strong relationships with brokers in other houses, ensuring the success of your yacht is the top priority.
“It’s about what’s best for the yacht, the owner and the crew when booking charters,” states Fitzmaurice.
As a world-leading luxury yacht brokerage, Northrop & Johnson delivers professional services in luxury yacht sales and purchasing, private yacht charter, new yacht construction, charter management, crew placement and more. For all your luxury yachting needs and beyond, contact Northrop & Johnson today.