Quantcast

With Summer Approaching, Coronavirus Is Sowing Confusion About Destinations in the Yacht Charter Market

Yacht brokerage firms are scrambling to reassure charter clients as coronavirus fears turn the Med's 2020 season into a big question mark.

Coronavirus Puts Yacht Charters on Hold Sasa Kadrijevic - stock.adobe.co

Leading yacht charter firms are reassuring worried clients about summer charter plans in the Mediterranean. That is especially true for Italy, a favorite charter destination that is now a coronavirus “Red Zone.”

“I have one client who cancelled his villa rental in Italy and chartered a yacht in the Bahamas,” says Jennifer Saia, president of B&B Charters, a boutique agency in Newport, R.I.

Most charter clients, however, are not as decisive as Saia’s customer, especially if they have already booked charters that can range from $250,000 to well over $1 million for a week on a preferred superyacht.

“There’s a lot of discussion and confusion at the moment,” says Saia. “Clients who committed to a charter are trying to find out if trip cancellation insurance will cover them or if the yacht owners will allow them to change the dates. It’s a big question mark that’s having a ripple effect across the charter sector.”

Coronavirus Creates Confusion in Yacht Charter Market

Yacht owners are taking extra precautions, including sanitizing yachts and monitoring crews.  Daviles - stock.adobe.com

With the winter season concluded in the Bahamas, Caribbean and parts of Asia, brokers in Europe and the U.S. are uncertain how the summer charter season may play out. It’s not clear when the Italian and French coasts of the Mediterranean, where the majority of charters take place, will be free of the coronavirus.

Some charter brokers are reporting clients are now looking at areas like Alaska or Scandinavia. Others are even considering chartering in traditional winter destinations.

“What is unique about the current situation is the substantial increase in inquiries for the Caribbean and Bahamas, as our clients are reconsidering a summer vacation in the Mediterranean,” says Heather Hatcher, charter management director for International Yacht Company, adding that charters in the Med account for 53 percent of IYC’s annual bookings.

“We don’t see mass panic or rash of cancellations, but I certainly can’t say that everything is normal,” Raphael Sauleau, CEO of Fraser Yachts in Monaco, told Robb Report. “The situation is changing every day, especially when you see a major charter destination like Italy being locked down. We’re trying to put our customers’ minds at ease as best we can.”

The next month will be critical to see how the summer 2020 charter season shapes up, Sauleau says, and that will depend on the progression of the coronavirus. “Our peak season is July and August, and a bit of September,” he says. “We’re still in March. We’ll obviously do everything we can to make sure a destination is safe, and the owners of the yachts are also proving to be flexible and understanding.”

Coronavirus creates confusion in yacht charter market

Yacht charters are viewed as safe vacations because of the privacy of the vessels.  Courtesy Yacht Marybelle

Saia says the Mediterranean Yacht Brokers Association (MYBA), the world’s largest yacht brokers’ group, is drafting an addendum to its standard charter contract to provide some provisions for the coronavirus, but it’s not clear if all yacht owners will agree to the terms.

Instead, many firms are promoting trip cancellation insurance, which would provide full or partial financial compensation for a cancelled charter. Northrop & Johnson is recommending a specific policy for clients, while also promoting the idea of an amendment to charter contracts that would allow a charter to be rebooked if there is a travel ban on a specific country in the summer.

“It will give you 12 months to re-charter the charter,” says Daniel Ziriakus, chief operating officer of Northrop & Johnson. “We’re also working actively with Net Jets to offer the possibility of private air travel so clients can have the option of avoiding commercial airports.”

The Ft. Lauderdale-based company has clients who are “holding off” on booking the charter until the situation is more transparent, Ziriakus says. “We’re seeing a high level of caution with some clients while others are thinking they might get a better deal if they wait,” he adds.

Virtually all charter firms are promoting private yachts as safe havens compared to cruise ships, hotels and other mass gathering points. They are also requiring that crews be tested for the virus and yachts be sanitized.

“There’s an extra level of watchfulness going on at the moment,” says Ziriakus. “The bottom line is that being on a private yacht is one of the safest things you can do as a vacation.”

Clients are now asking about chartering yachts in winter destinations like the Caribbean.  Vista Blue

“Each yacht is disinfected between groups on board, the air is purified on most yachts, and cleanliness standards are very high,” adds Stefanos Makrymichalos, CEO of IYC. “Some of the yachts use special air filters that control the spread of pathogens, and the Ozone generator can be taken room to room for extra sanitation.”

Before the coronavirus news broke in January, many brokers were seeing healthy year-over-year increases in charter bookings.  Burgess Yachts says its charter bookings are up 16 percent compared to the same period a year ago.

At the same time, Burgess is also receiving the same pushback from clients that the other firms report. “We have noticed clients asking more questions and enquiring about going farther afield like Norway or Alaska,” Burgess said in a statement to Robb Report. “We have also offered more flexibility in contracts.”

IYC’s Hatcher notes that there are two months before the summer charter season in the Med begins. “On average, an additional 30 percent of our bookings usually come within one month of the start,” she says. “We’re optimistic that the situation will be under control and there will be a recovery in bookings of yachts in the region.”

 

 

More Marine