Where to Start? Charter Business...

[LeavingTO]

Long first post, I’m sure it will be one of many. Firstly, I’d like to say I’ve searched the whole forum and really enjoyed learning from you guys. I’ve re-read this post a few times, sorry if it sounds a little like a business plan!

My wife & I are seriously considering starting a bespoke charter company. We have a million questions and a huge learning curve ahead of us but we’re young, motivated and hey, even if it doesn’t work out we’ll have spent the next few years sailing.

As an introduction here’s some background:

Us: Living in Toronto, Canada. We’re both 31, no kids. I’m actually a Brit working towards my permanent residency in Canada. We both have EU passports.

Sailing: Me - sailing since I was a child. My dad had a couple of boats when I was growing up, 29’ & 44’ sloops. I’ve done lots & lots of cruising on the south coast of the UK, passage making in the Baltic and some day sailing in the Med. I’ve crossed the Bay of Biscay three times – including once on a yacht delivery from the UK to Canary Islands. I think of myself as a good sailor and I know a few people who always turn first to me when they need extra crew. Small issue - I have no (sailing) qualifications (yet)! Actually, I have RYA Competent Crew.

S/O – Did her ASA ‘Skippers’ ticket a few years ago, sailed for 1 – 2 weeks every year for the last few years. Caribbean only.

The Boat: Still not 100% confirmed, likely to be a Lagoon 440, certainly a cat around 45-55’.

The opportunity: My background is in travel / hospitality. I’ve worked for 7 years in ski resorts providing luxury ski holidays for groups of 8-14 people. The ‘chalet holiday’ is a very similar proposition to a crewed ‘all inclusive’ yacht charter, I was responsible for breakfast & dinner (another meal is no problem) and looked after every aspect of the guests stay. The main difference is that guests were out skiing all day, but then so was I!

My father-in-law is about to buy a boat; he wants it all sorted for this coming season in the Caribbean. The idea of a small charter company was born by him simultaneously to myself & my wife. The in-laws are ‘semi-retired’ and were planning on spending 4-5 months on their new boat in during the winter. While thinking through different options for the hurricane season the idea came about that he would be happy for the boat to be brought to Europe to be chartered (he gets to cross the Atlantic in it and gets a few weeks of Euro cruising to boot).

Firstly with regard to our sailing experience / qualifications - the boat (hopefully) will be all sorted for November of this year. We’ll then be on the boat from then until May 2010 when we’d join ARC Europe for the transatlantic crossing. During this time we’d do any of the formal qualification that we might need to do (actually it would be possible to do them on the cat in the Caribbean (ASA only?) or back in the UK with the RYA depending on what we need).

The cat would then be arriving in Europe in June. We would plan to sail straight to our chartering destination and spend 3-4 weeks familiarising ourselves with the area before taking on out first guests. I understand that this aspect will be a challenge in terms of our guests – our limited experience of the area. However we are being realistic – our initial pricing will reflect this weakness – and it is likely that our first few weeks will be made up of family and friends (not that we are relying on them for future income just to allow us to cut our teeth!).

We have no expectations in terms of how many weeks we could sell in 2010. One or two weeks could make it worthwhile in terms of covering costs. This summer would be our learning curve. We’re in the enviable position that we wouldn’t have any payments to make on the boat, the costs would almost solely be our living expenses (plus any insurance costs etc with regard to the business – marketing etc).

We’d then take the boat back to the Caribbean for the winter and *possibly* do another week or two charter when the in-laws weren’t on the boat. By summer 2011 we would hope our marketing plan would mean we would make some proper bookings and hopefully the first step to profitability.

The basic reason for this post is just not knowing where to start. The boat currently hasn’t been purchased and we’ve never worked on Charter boats.


1) Who can run charter operations in the Mediterranean? In particular the northern Med, as we both speak good French. Ie. Can a Canadian based / registered charter company operate there? I’m guessing UK based companies can operate there due EU agreements?

2) If we have to be a UK registered charter company to operate in the Med, does our boat have to be UK registered? I’m guessing for insurance purposes they would want the boat to be MCA coded but does that mean it has to be UK registered?

3) What qualifications would we need? I guess this is really at the discretion of the insurance company?

4) Things we’ve missed - I know we can do the sailing side of things (tickets pending), I know we can do the business side of things (sales, marketing etc). The unknown is the market itself and any rules, regulations & restrictions regarding this sort of business in the Mediterranean.


Other stuff we know: this could put some stress & strain on the family, especially the in-laws and their new toy but they were considering using a charter company anyway, at least this way they know who’s looking after the boat. FIL is happy the boat isn’t on the hard for 6 months and even happier if my wife & I can start a viable business.

I know that a lot of you will already have some, if not all, of the information that I am looking for. I’m asking for your help as I know I can find it eventually but I’m sure you’ll all agree we have a lot of stuff to work out so if you can shed any light on any aspect of the project, please chime in!

Edit just to say, I've also posted this on a UK forum, to check it's in the right section of the board? And to say thanks...

[GordMay]

Greetings and welcome aboard CF LeavingTO.

Maggie & I left TO in the early 70's, so have some appreciation for your screen name.

Notwithstanding, your “chartering” plan seems to preclude your “residency” (Ca) plan.

Your questions are very specifically technical, and whilst I don’t doubt our members willingness (& ability) to help you, I suspect you may need professional advice beyond the scope of what will inevitably be offered here.

Best of luck!

[LeavingTO]

Thanks Gord - actually not bothered about the PR stuff, esp if the charter thing takes off!

Still trying to find a UK based forum where people may have some experience of running charter companies...

[GordMay]

Check out Jack Tyler’s s/v “Whoosh” pages for a lot of excellent (& important) technical information about cruising Europe, including modifications required to boats set up for North American electrical, propane, and etc.
Goto “Cruising Europe” at:
➥ Whoosh

[anjou]

Have you searched the RYA for any info re qualifications and insurances?

[Vasco]

The winter is the peak of the charter season in the Caribbean. If the boat is out of service (your in-laws cruising 4-5 months) then how do you expect to make a living? The crewed charter business is very difficult for an inexperienced couple to break into never mind getting bookings. Hate to throw cold water on your idea but your "business plan" will not work. No agent would list your boat for charter in the Caribbean if it's only available for a week or two!

[newjersey]

I have a 1978 Pacemaker 46
do you think that this vesselr would be OK for a charter agency?

[LeavingTO]

Originally Posted by Vasco

The winter is the peak of the charter season in the Caribbean. If the boat is out of service (your in-laws cruising 4-5 months) then how do you expect to make a living? The crewed charter business is very difficult for an inexperienced couple to break into never mind getting bookings. Hate to throw cold water on your idea but your "business plan" will not work. No agent would list your boat for charter in the Caribbean if it's only available for a week or two!

The income would be generated in Europe during the summer? Leaving me to ski during the winter... (the winter is actually, currently, my only source of income.)

This is more a project to keep the money coming in during the summer, and of course, me out of trouble.

The "*possibly* one or two weeks" comment in the Caribbean was the fact that the boat will be there and it may throw a little more money in the coffers... The point is, we are concentrating on the European summer market...

[LeavingTO]

Looking at this from a different perspective :-

Who regulates charter yachts in Canada? No immediate joy at CYAs website...

[LeavingTO]

Haha. This is becoming a BLOG! Sorry, I can stop if you want but I thought I might as well answer my own question. Transport Canada is the regulatory body.

So for my FIL to have his boat registered in Canada the boat would need to come back here for inspection. He's not going to want to bring the boat up here. So ignoring my desire to start the charter business, how does he go about owning / registering a boat in his name that would be predominantly kept in the Caribbean?

If he buys an ex-charter boat the boat must have already been approved for charter use. Perhaps this is a route I need to investigate further...

[captain58sailin]

I am sure that you have already considered the personnel documentation, someone will need to have a master's license of some form or another be it Canadian or UK etc..., I understand that the UK actually has some type of "Yachtmaster" designation with one of their tickets. As far as the business goes, customer care is the #1 consideration for chartering, people can overlook a lot if they are being cared for properly, would not lower my price or admit weakness in an area to the client. You are providing a service and if the service is good, then there is no reason to make apologies. 4 weeks in an area sans clientele is plenty to explore your area and get familiar, don't over look "local knowledge" as an asset for the journey, meaning don't be afraid to talk with the locals and see what you can learn, you don't need to broadcast your agenda, just be an interested in the area, person. Do have an agenda for exploring your area of operation and cover as much of it as reasonably possible. Make sure you have plenty of goodies for your passengers to snack on during the trip. The personal attention to detail will keep your customers coming back for more.

[Vasco]

Originally Posted by LeavingTO

So for my FIL to have his boat registered in Canada the boat would need to come back here for inspection. He's not going to want to bring the boat up here. So ignoring my desire to start the charter business, how does he go about owning / registering a boat in his name that would be predominantly kept in the Caribbean?

If he buys an ex-charter boat the boat must have already been approved for charter use. Perhaps this is a route I need to investigate further...

The boat can be registered without being brought into Canada. I registered my boat without bringing it back. It's the same process as registering any boat in Canada except,with the boat not being in Canada, no Canadian taxes are payable. Just go to the Transport site or call Don Powers who, I think, is still the Registrar in Toronto. To run crewed charters in Canada requires inspection.

Most of the charter boats for sale in the Caribbean are ex bareboat charter vessels and don't require any special inspection or documentation.

[LeavingTO]

captain58sailin - There is so much detail that I haven't gone in to but you are right about the pricing - I was thinking more in terms of being 'competitive' until we are well established. Whatever. Pricing policy is a long way from here.

Customer service has been my core business since I left school. I've looked after everyone from all walks of life - including some minor royalty! Thanks for the tips.

vasco - thanks, I must have been reading the parts specific to commercial vessels needing to be inspected.

Going to speak to the French Embassy to see if they can shed any information w/ regards to who / what can operate charter trips in French waters.

The question then is one of insurance. Is it possible to get insurance without the boat being inspected for commercial use?

[GordMay]

Yes, Don Powers & Renée Bethea are Registrar of Ships in Toronto:
4900 Yonge Street, North York, ON, M2N 6A5

Don Powers.
Tel: (416) 973-8142
Email: don.powers@tc.gc.ca

Renée Bethea
(416) 973-8145
renee.bethea@tc.gc.ca

[edsailing]

In Europe tickets vary, if the boat is uk registered, you will need a commercially endorsed ticket, typically Yachtmaster, you need to check out the detail with the RYA. The boat will need to be coded for the type of chartering you are doing - this is achieved through survey and will dictate the number of passengers and equipment that has to be carried.