Charter Broker License Requirements

[MilkDud]

I'm planning a charter later this year in the USVI and I was wondering what the licensing or bond requirements are for a charter broker or boat owner?

[contrail]

Originally Posted by MilkDud

I'm planning a charter later this year in the USVI and I was wondering what the licensing or bond requirements are for a charter broker or boat owner?

Legally, none. However it's not the Wild West, either; here is how the crewed segment of the business works. Most boats have a Central Agent, otherwise known as a Clearing House. A Clearing House will generally represent somewhere between ten and seventy different boats. It is responsible for vetting those boats and each Clearing House will have it's own set of requirements, some stricter than others. The Clearing House is also responsible for holding the funds. In the USVI and BVI, half the funds are released to the boat a week or ten days before the charter, and the balance is released on the day the charter begins. It's different in different parts of the world.

The Clearing Houses generally have been around for awhile and have earned their reputations, good or bad. They are well known to the boats and the brokers. Currently, the two major Clearing Houses in the BVI have longstanding solid reputations. There are a couple in the USVI including one that is pretty shaky, however.

The brokers do not have licenses. The ones handling boats in the USVI and the BVI come from all over the world, but the vast majority are from the US. However, the Clearing Houses vet them, too, and some Clearing Houses are quite strict in the requirements they expect brokers to meet. There are some bad apples, but mostly they are pretty good. The brokers have different associations in different parts of the world. The major one in the Caribbean is CYBA, the Charter Yacht Brokers Association. It's been around for awhile, has rules and regulations, including a Code of Ethics (which it does enforce). It has an excellent online course on becoming a Charter Broker, and it takes awhile to become a CYBA member.

The boats are well known to their Clearing Houses and to the brokers. The brokers familiarize themselves with the boats at the annual charter boat shows. These are not consumer shows. At these shows, the brokers visit boats and interview crew, checking out the ones new to the charter fleet, and checking in with the established boats to find out what's new. The good brokers ask lots of detailed questions of the boats, their goal being to have the information to pick the right boat for the right client. The good ones succeed at this. The shows can be quite spectacular as the boats are all prepped to the max.

The organizers of the various shows may have tighter or looser requirements for brokers to meet, in order to attend. The biggest and oldest of the shows for the types of boats that most folks charter is the Tortola Boat Show, held on Tortola every November. It is held by the Charter Yacht Society of the BVI, (Charter Yacht Society BVI) and generally features 70 + boats and 100 - 120 brokers. The CYS has requirements that must be met by both brokers and boats. It's the very pro-active trade association of the BVI based privately owned and operated charter boats, generally the cream of the crop for the area. The CYS holds seminars for both boats and brokers entering the industry. It's been around for almost 35 years.

Both the USVI and the BVI have regulations pertaining to charter yachts. Some relate to work permits and residency, some are safety compliance oriented, the BVI's regulations being somewhat stricter than the USVI's. There are boats that operate "under the radar" same as anywhere else, but you will rarely find a broker that recommends these, and for good reason.

With the exception of the regulations mentioned in the previous paragraph, it's a largely self regulated industry, the procedures having evolved over decades. And it works fairly well, as long as you use recognized brokers (CYBA member ship is a good place to start), and boats with a recognized Clearing House.

The process generally is that the client contacts one or more brokers who help identify appropriate yachts from which to choose. You can pretty quickly figure out which brokers are prompt and professional and which ones aren't! Do yourself a favor and use a "pro". When you pick a yacht, the broker will place a "hold" on your dates, with the boat's Clearing House, and you figure out logistics, flights, etc, and make up your mind. When all that is done, you and the boat both sign a contract and you make a deposit, generally either 25 or 50%, depending upon how far in advance you are booking. There will be a schedule for paying the balance, and everything should be paid 30 days in advance of the charter. You will be put in touch with the crew, who will communicate with you the better to prepare for a great vacation. Either the broker or the boat will send you a "preference sheet" that will identify culinary desires - and the chefs are really top notch - itineraries, desired activities, and so forth. You will probably speak with the crew one or more times on the phone so that everyone is on the same page with regard to planning and expectations. The next step is that you arrive and have a great vacation. At the end, don't forget that the standard tip for the crew is 15 - 20 %, depending upon the level of satisfaction and service. Sometimes the crew deserves less, or even nothing, in which case tip accordingly, and sometimes the crew gets more, sometimes a lot more. But don't plan on stiffing the crew if they do a good job. It's not the way the business works - even if it is different where YOU come from. It's a competitive business, and, like it or not, the pricing depends upon the crew making the lions' share of their income from tips. Might change, someday, but that is the way it is.

After a charter, the crew and the broker will probably both be very interested in your feedback. Both parties are anxious to have satisfied guests, and eager to improve where improvement is necessary.

Your post did not specify a crewed yacht, but that's the answer I have given. For bareboats, you can either go directly to the companies - some of the small ones work even harder than the large ones - or you can go to a broker. These will likely be the same brokers or brokerages that handle crewed yachts, so you can use some of the guidelines I have outlined, above. You will find some online reviews for the various companies, whether they are in the USVI or the BVI. Check them! Bear in mind that the charter companies are really management companies....they don't own the boats. Each boat is owned by an absentee individual and the charter companies each have different business models. Some models tend to encourage more maintenance and some less, but no company wants to spend lots of time solving problems during charters, so the boats are generally in pretty good shape. Some companies specialize in newer boats and some in older boats, but bear in mind that some of the older boats are among the best maintained. But there is "sizzle" to the latest models, and those are the ones that cost the most.

There is some homework to be done when it comes to booking a charter, but in the USVI and the BVI the business is pretty mature. No, there aren't licenses, (other than licenses for the captains and some other roles) but it's a pretty well organized and self regulated segment. That's why it's the charter capital of the world. Great sailing conditions, too. I hope this post helps you book your upcoming charter.

Full disclosure: I operate a BVI based charter boat, have been a member of the CYS for years (served on the Board for years), and attend the Tortola Boat Show on an annual basis. Which you might have guessed!

Good luck with your charter...you should have a great time.

[MilkDud]

Contrail, thanks for the detailed response, very helpful.

[GordMay]

Greetings and welcome aboard the CF, MilkDud.

[captstu]

If the boats without registration and those found nor seaworthy were required to move, a big part do the problem would go away.

Then, if, popular areas required pump out licenses that towns sold for - say - $25/month and provided mandatory weekly pump outs, that would help some more.

Let's try that first before we kill the industry and my hobby.