Yacht Charter Company?

The idea is very common, but few if any yacht owners has been able to make a real profit on charter. They charter out their yachts for other reasons, like getting some income to offset the costs, or to keep the crew all year round. Some charter operations I know that is profitable are connected with shipyards or manufacturers who would use charter as a way of keeping up the production, but then they have less profit to that end...

Yes, if you divide all the costs to own and operate a yacht for charter with the true net income from the actual number of weeks you can charter it, it will most likely be a minus in front of the final figure.

AMG is absolutely correct. It is very difficult to achieve positive cash flow in the charter business. Very few do, but most don't.

Having been on both ends of the equation, I can share with you what I know to be true both as an owner, and as a charterer. Your mileage may vary.

We've chartered two boats in the past. An 86' for 10 days and a 118' for 14 days, both in the Caribbean. Great fun. Wonderful use of the boats, both of which were stunning.

Once we were then on the other end of the ownership table, (owned our own) we discussed chartering with a few different charter management companies. (mainly the company we worked with for the 86 and 118 charters we did)

After you run the numbers, you quickly learn that your expectations of profit are quickly realized (read: reduced). At best, you may offset the total cost of ownership of your boat. You will be a very rare case should you turn a profit over the long haul with a single boat.

You then need to ask yourself, if the boat is being used, there is the cost of use, the wear and tear of use, the time, travel, and 'hours' of use. Yes, all of which are built into the cost of the charter. And there are (or can be) people who simply don't treat things as though they own them. You as an owner will treat your boat differently than those that are enjoying it. So, you introduce a higher cost of maintenance and repair. Essentially, your boat will 'age' remarkably quicker, without you even stepping foot on it.

All of which we had a really hard time justifying having the boat out, without us on it, while perhaps slightly offsetting the total cost of ownership. IT just didn't make sense to us after we looked at the numbers.

Best case scenario- You may break even.

Best of luck to you.

~Q

One of the things to keep in mind when you create your cash flow model is down time. A boat new to the market is very much like a new rental property in a resort area. It will take a few years to achieve stablized occupancy. You will need to enter the boat in as many charter shows as your wallet can afford. Also, keep in mind the 20% fees that charter agents charge, off the top.
Let's assume you position the boat in the St. Maarten area and achieve one rental per month for each of three months. Three weeks of each month you, as the owner, are absorbing the costs of keeping the vessel in an area during peak season - higher dockage, fuel and food costs, and you receive 80% of the proceeds from any charter.

Of course, a Captain with a great following can help reduce your down time, if you can find and afford one.