76Isea&iISPRING-SUMMER 2012Although most owners are willing to negotiate to securebookings, Kiernan believes that the majority do not want todevalue their product any more than it already has been. "Yachtowners and managers have adjusted their rates to the newmarket and, having done so, they are holding firm to arespectable value."On the retail side of the charter business, Dawson believesthat the level of negotiation for 2012 appears to be less than2011, however Dawson says she still tries to negotiate a char-ter rate on behalf of the charterer. "It depends on various fac-tors, such as the dates and length of the charter, the number ofcurrent bookings, the popularity of the yacht, plus the owner'sdesire and need for charter time for themselves," she says. "Owners are definitely aware of the need to negotiate. Theyappreciate that although the market is recovering there are farmore yachts being offered for charter than ever before and theyacknowledge that competition is fierce at every level," Kiernansays. "However, we are not seeing the massive discounts wehave experienced in the past. It is now more a question of com-mercial gestures or special offers, and charterers seem to behappy with that." CRUISING GROUNDSFor the last few decades at least, yachting has focused on thetraditional cruising grounds of the Côte d'Azur, Corsica, Sardiniaand Italy's Amalfi Coast and it seems that 2012 will be no dif-ferent. Trying to encourage clients, both owners and charterers,away from these traditional yachting destinations is challeng-ing, but several brokerage houses continue to promote newcruising grounds. "Last winter we had a number of yachts cruising to lesser-established cruising territories, such as the Indian Ocean andAustralasia. We promoted these heavily and we did make head-way but it was hard work," says Kiernan. "The majority of clientswant the ultimate yachting experience at their destination, witheverything from beaches and secluded coves to top restaurants,bars and boutiques. The lesser-visited cruising grounds do offersomething different but only a handful of clients are willing totravel further for the experience." Kiernan goes on to explainthat many of the yachts that explored further afield for the lastwinter season have returned to the Mediterranean in anticipa-tion of a busy summer. Demarchelier says that they have seen a lot of enquiries forthe Eastern Mediterranean for summer 2012 charters. "We havereceived considerable interest for the Adriatic and Aegean; moreso than in previous years. But the Amalfi Coast is also as popularas ever." Dawson concurs, "From my experience so far this year,there are the normal enquiries for the South of France, but alsoquite a lot for Croatia and the Adriatic and southern Italy."
SPRING-SUMMER 2012I sea&iI77chartermarketDawson believes that tax/VAT changes in France and Italycould affect the popularity of the Western Mediterranean."If Italy stays on its current tack with VAT at 6.3%, which is asimilar rate to that imposed on charter fees in Greece and theBahamas, then the Western Mediterranean will remain pop-ular, however if they opt for a full VAT rate of 19-20%, the mar-ket could see Croatia, Greece and Turkey benefiting to thedetriment of France and Italy." Demarchelier agrees. "We have noticed that the perceptionof the Western Mediterranean, including VAT on charter rates,is not being well received and we feel this fear is promptingclients to consider other destinations." Kiernan says, "France and Italy remain ever-popular destina-tions, but we are seeing increasingly more interest in Croatia,Greece and Turkey than we have in previous years. This may,in part, be due to a greater number of fantastic yachts head-ing to the East Mediterranean."The Baltic and South Pacific are also getting more attention,as savvy charterers are looking for something new and differ-ent, and owners are meeting their demands and taking theiryachts further afield," Kiernan adds.In the western hemisphere, the Southern Caribbean - par-ticularly St Lucia and the Grenadines - is gaining appeal asan option for summer cruising, and New England remains an oldfavourite for a proportion of the American market.""The Bahamas, New England, the Adriatic and the WesternMediterranean remain popular," says Dawson. "A lot of our fam-ily charters are booked up for June. It is the perfect time beforethe rates jump to summer highs, and when the popular cruis-ing areas are less crowded." THE LONG AND THE SHORT OF ITFor the majority of brokerage houses, the average number ofweeks being booked for charters remains fairly static. As pre-viously mentioned, owners have had to be more adaptable withregard to rates, but they have also had to be a lot more flexi-ble about the duration of charters. Whereas before the creditcrunch many of the larger, more popular yachts would imposea two-week minimum for charters during peak periods, nowmany owners are willing, if not keen, to accept offers for shorterperiods of time. However, in general, the majority of charters remain betweenseven to 14 days. "It is significant that owners are now willingto accept one-week bookings in the prime July and Augustperiod, when they used to be able to insist on ten to 14-daysminimum at that time," says Demarchelier. "The average char-ter is now much shorter than it used to be."Kiernan says that although he has not noticed a significantchange in the duration of charters, either from the previous fewyears or from before the economic downturn, he has found thatowners will no longer consider anything under the standardone-week minimum during peak periods, which they may haveconsidered during the downturn. A very small number of superyachts are chartered for along period. Demarchelier has had a handful of enquires forcharters of between six to nine weeks, "This is certainly morethan we have had in the past 24 months so perhaps the tideis changing," Dawson hopes. "Longer charters were few andfar between in 2009, but demand for them did steadily risein 2010 and 2011, and it's a trend that appears to be holdingin 2012."TOP PRIORITIESAside from style, availability and price, which are usually aclient's key criteria when first enquiring about a yacht, the mostcommon preliminary question that a client will ask is the num-ber of staterooms and the amenities on board. However, thereare several other important considerations to take into accountwhen deciding which yacht to charter. Dawson stresses to her clients the importance of a yacht'screw. "Most clients do place great significance on the crew butit may not be their first question. I believe that the crew is asimportant, if not more so, than the yacht itself," she says. "Itis the duty of the charter broker to ensure that the crew has agood reputation and will suit the charter party. Client input iscritical in order to establish what they expect, and a charter bro-ker's knowledge of the crew is equally important to ensure agood fit of personalities. I have had a number of clients requestreferences for crew and I am more than happy to provide thesewhen available." Prior to the economic downturn, experienced crew were insuch demand that they could pick and choose their yacht,France and Italy remain ever-popular destinations, but we are seeing increasingly more interest in Croatia, Greece and Turkey than we have in previous years?