Chartering a superyacht, what to do with the price.

[Teknav]

Hi! Be careful when you undercut the competition. I wouldn't be cutting my prices by 50%, because you will be working with a well established market; high end as it is. A 20% price cut, with added values not seen in other charters, would be the place to go. Cruise for a week, but you also can earn your Open Water SCUBA c-card, in the mean time... or learn about wines, or cooking seafood. The bottom line is to distinguish yourself from the competition, but don't significantly undercut them. Good luck! Mauritz

[Capt Phil]

Having captained a couple of them, the cost of maintenance, fuel, provisioning spares, food, drink (usually only top shelf), moorage, harbor and port fees as well as the 'normal' luxuries many guests expect, to say nothing of finance costs run the bill up pretty quick. Additionally, you need to have a reliable, competent crew, a skipper who is adept at managing the whole venture, including the staffing.
Folks who spend those kind of $ on chartering are used to the best and demand it. If you can't or won't deliver, they go elsewhere and word gets out quickly. I can recall several clients who were pissed at their former charter company and ended up with us.
Many are corporate entities who put together charter deals for good customers or as a perk for high performing staff. These folks who are on a 'perk' charter paid for by their company tend to be more demanding, less considerate of the crew and staff and could care less about slopping red wine on a white carpet. Frankly, you can't pay me enough to babysit these self indulgent children who expect you to wipe their rears as well as their noses.
Makes me happy I'm out of the business for good... Phil

[LuxuryYachts]

Hi there. Welcome to the world of super yacht chartering. Have you listed your yacht with a central yacht agent? That will protect you as well as the client's monies and open the market to all the yacht charter brokers out there. You can also compare your rates against similar boats that are offered in the market, too.

[LuxuryYachts]

Well said Bash!

[denverd0n]

Originally Posted by MarkJ

If rich people were fools they wouldn't be rich.

Mostly true. Of course, there are the suddenly rich celebrities and sports figures who are amazingly foolish with their money at times. But anyone who thinks that Warren Buffett doesn't watch his pennies, just because he happens to be a billionaire, doesn't understand how people like him get to be people like him.

[denverd0n]

Originally Posted by Super-Yacht

...we are now suggesting to them to put it out much lower to see if we will get more weeks filled...

Getting more weeks filled is a good idea, but might I suggest that what you want to do instead of going MUCH lower is to lower the price just a little bit. Maybe from $50k per week to $40k per week. See how that affects your bookings. Then you can lower it a little bit more and see what that does.

The bottom line is that it is always easier to lower the price to the customer than it is to raise it. You don't want to lower it too much, find that you are getting over-booked, and then try to raise it. You will have lowered expectations across the board, and there can be resistance to bringing it back up. This may be what the brokers are leery of.

[LuxuryYachts]

So very true. I have a friend that is a pilot for a billionaire and the guy went to buy rugs at Walmart to put in his G4...

[Capt Phil]

As long as you have a good handle on both your fixed and variable costs, profit, as well as long term maintenance outlays, these should be driving your price point as much as brokers opinions. It's a business for goodness sakes and the normal financial factors should play a big part in what you are charging for your product or service. Brokers are driven by a different motivation overshadowed by profit in their pocket, little or no capital investment and what will the competitive market bear. Biggest issue I had with these birds was rebooking groups who knowingly trashed the boat and had little if any concern about anything but their own hedonistic desires.
The most successful charter owners I knew were usually Corporations who had a built-in clientelle, high % repeat business and steady dependable crew with low turnover. There were a few private owners who owned a larger yacht, formed a company and occasionally chartered out through a broker or on their own as a way to defray maintenance and operating costs.
When I worked in the business as a skipper, it was the private owner who seemed happier if not more financially stable... they were certainly easier to work with than brokers who seemed more interested in what was in it for them than the owners. Just an observation... Phil

[nimblemotors]

Originally Posted by Teknav

Hi! Be careful when you undercut the competition. I wouldn't be cutting my prices by 50%, because you will be working with a well established market; high end as it is. A 20% price cut, with added values not seen in other charters, would be the place to go. Cruise for a week, but you also can earn your Open Water SCUBA c-card, in the mean time... or learn about wines, or cooking seafood. The bottom line is to distinguish yourself from the competition, but don't significantly undercut them. Good luck! Mauritz

I agree, not lower the price, but add perks.