Overview

Brief industry overview

The bareboat and crewed charter boat holiday industry is experiencing exciting growth both in Australia and throughout the world. From it’s origins in the Mediterranean and Caribbean in the early 70's, the charter industry has flourished with charter fleets operating on waterways throughout the world. Approximately 90% of the boats operating in the charter fleets around the world are not owned by the charter companies. They are owned by private individuals who operate their boats as a business to generate financial returns whilst also making use of their boat for holidays afloat in some of the worlds most beautiful cruising destinations. The purchase pathway for prospective charter boat owners has traditionally been a complicated one with decisions and questions such as: what type of boat? which operator? which area? what are the Tax issues? plus a myriad of other unknowns. All of this has historically created a less than smooth transition from the first thought of purchase through to the first charter with potential buyers not easily finding the answers they require to proceed with a purchase. In Australia the main locations where fleets of sailing and power boats are operated in charter fleets include:

• Queensland
  • The Whitsundays
• New South Wales
  • Sydney Harbour
  • Pittwater
• Victoria
  • Gippsland Lakes

Other locations with burgeoning charter fleets include Magnetic Island in North Queensland and the Fraser Island/Hervey Bay are in Central Queensland. Areas such as Brisbane (Moreton Bay) and Melbourne (Port Philip Bay) have a number of multi-function fleets where the operators are using the boats for sailing school work, corporate activities, short charters and day charters. Whilst there are many other popular and beautiful waterways in Australia where you might expect to find successful charter fleets operating the reality is that there are a few key operating parameters that determine if a location is able to support a successful charter fleet. These include, but are not limited to:

• Expansive waterways that are not exposed to any Oceanic Swell.
• Waterways that have “jagged style” shorelines with lots of bays and inlets on various sides of the waterway allowing the charterer safe haven regardless of the wind direction.
• Waterways that have destinations offering a variety of natural and man made attractions that are well spaced throughout the cruising area.
• Waterways that have reliable depths with minimal underwater hazards or alternatively have suitable buoyage. The most popular charter locations for overnight charter holidays are obviously in the warmer regions with the Whitsundays being the most popular Australian cruising destination.
• Waterways that are easily accessible for tourist with Airports, public transport and have adequate shore based infrastructure such as supermarkets, hotels etc..

(Areas that meet all of the other parameters except the depth requirements are becoming popular as charter destinations for the shallower draft Catamarans and are popular with houseboats).

The Boats.

The majority of boat charter companies represented by Charter Yacht Solutions are "bareboat" operators. Bareboat means that the customers rent the boat themselves and then sail off into the designated cruising area for a day or a week or longer.

We use the term boats. Generally, for bareboat charter the boat types used would include:

• Sailing Monohulls
• Sailing Catamarans
• Power Monhulls
• Power Catamarans

In the majority of cases the boats used for overnight bareboat charters range in size from 32 foot up to 50 foot and have anything from 2 cabins up to 6 cabins.

The other types of boat charter operation include "crewed charter" which is where the boats operated are supplied with a crew and the customers sit back and relax. Mostly, crewed boats are larger and will range in size from 40 foot up to 200 foot and again will be sail or power and monohull or multihull.

Another popular choice of boat charter is the trusty "houseboat". Houseboats are most common on the more protected and often shallower waterways. In Australia they are prevalent on the waterways of the Gold Coast and The Murray River.

Charter Yacht Solution can assist with inquiries about any of the boat types mentioned and help potential owners through the selection and purchase process.

In the major operating locations the majority of fleets consist of new or “near new” boats. Charter Companies strive to maintain a regular turnover of their operating fleet placing a number of new boats in their fleets each year and retiring older yachts. Growth in fleet sizes is not dramatic and is driven by customer demand for boating holidays with operators being very careful not to expand their fleet sizes too quickly as this can have a detrimental effect on the financial viability of the entire fleet.

Generally the boat owners will enter into management agreements with the Charter Fleet operator for periods of three to eight years with the average being approximately 5.5 years. The build quality, functionality, visual appeal and general suitability for operation of the boats being used in Fleets throughout the world is improving constantly. Important factors in selecting which boat to purchase for operation as a charter boat include:

• The attractive appeal of the boat to Charter Holiday customers.
• The functionality of the boat and its suitability for use in the operating location.
• The reputation of the brand.
• The resale potential of the boat at the end of its operation.
• The suitability of the boat in respect of the personal objectives of the owner who wishes to keep the yacht privately at the end of its charter life.
• The price of the boat and its potential to be a profitable charter boat.

Charter Companies

Owners of boats within the Australian Charter industry are generally involved in the industry for the purpose of carrying on a business. See our Taxation page, business models page and Financing page for more information on the exact business models. The relationship between the boat owner and the charter company operator is very close with both parties relying on the decision making of each other to ensure the success of their respective businesses. As well as the importance of selecting the right boat the other extremely important decision that the boat owner must make is which Charter Company to engage as the manager of their boat. Important factors to consider include:

• The location of the charter company and the suitability of the location for the successful operation of the boat.
• The shore based infrastructure
• The maintenance standards and overall quality of the existing fleet.
• The professional presentation of the operation
• The experience of the team
• That the operation has all necessary operating permits, licenses and meets any other standards required by the industry or Government.
• The marketing and selling activities and the bookings history.
• The general reputation of the operator.
• The business objectives of the operator.
• Does the owner personally feel comfortable with the specific operator and feel that they can work together closely for a number of years.

The respected charter companies are very conscious of the absolute importance of maintaining the boats throughout the contracted management period. The two obvious reasons for this are that firstly it is paramount in helping to attract charter holiday customers and secondly to ensure that the charter boat owner is happy with the management of their boat and agrees to leave the boat in that operators fleet.

Talk to us at “Charter Yacht Solutions” and we can help you to understand the industry in more detail and show you that owning a charter boat is a great opportunity as long as you choose the right boat, the right charter company and understand how it all works.