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?

78Isea&iISPRING-SUMMER 2012and crew turnover was high as crew switched from one yachtto another between seasons. As a consequence of the reces-sion, many yachts have laid off staff during the winter seasonand the resulting oversupply has meant that crew with jobs arehappy to have them and will stay in their positions for longer.Needless to say, service standards remain as high as ever. Demarchelier agrees, "Price is still up there as a key consid-eration, but crew, especially chefs, are of huge importance tothe charterer. Deck spaces and interior décor are other impor-tant factors for many." A DIFFERENT MARKET"With regards to the future of the charter industry there is littlemore that we can actively do to improve charter business aswe are dependent on external forces," admits Kiernan. "Oncecharterers regain confidence in the financial stability of theirbusinesses and the economy, we'll see a more significantupturn in the charter sector."Dawson says that it is sometimes hard to know which crisesmight affect the yachting market. "The first shock of the globalfinancial crises seems to be past us, but we are still sufferingfrom the aftermath, including confidence in the future," shesays. "The recent unrest in Greece, the Middle and Far East andthe effect on oil prices and stock markets all affect thecharter market."Dawson says that the enquiries pick-up in the early partof 2012 is largely due to a general increase in confidence, pri-marily from the US market. "We have seen a lot of interestin the Mediterranean this summer, and clients who stayedclose to home last year are now considering more distanttravel again, so the US market is travelling to theMediterranean for summer charters." Kiernan concludes, "Although we've noticed a recovery tosome degree, there is no question that the recession contin-ues to impact on the charter market. The key to the health of ourindustry overall is to find new charter clients. This will lead tonew owners and more business for everyone."Dawson agrees with Kiernan. "Attracting new clients to thecharter market is more important than ever in order to introducenew blood to the industry. Many of my clients have charteredthree or four times and then gone on to become an owner them-selves, and this is how the industry should work." Dawson does,however, go on to say that throughout the downturn the mainfocus has been to keep existing clients. "As brokers, we havehad to work harder to secure bookings from existing clients andas a result have become a lot more creative in our approach.Many of my clients are adventurous types and by finding a yachtin a new location I have been able to secure charter bookingsfor some very happy clients who may not otherwise havechartered this year." Demarchelier believes that there is always room for improve-ment and this especially rings true with the yacht charter indus-try. "In addition to catering to the existing yacht-savvy individ-uals (those who have chartered before), at Camper & Nicholsonswe are continually working on concepts to introduce luxury yachtcharter to all high net worth and ultra-high net-worth individu-als and their families, friends and colleagues," she says. Dawson backs this up, "There are still many people who areunaware of yacht charter and the considerable benefits it offerscompared to a hotel or villa holiday." She goes on to point outthat whether or not a client has been affected by the financialcrisis, many still perceive chartering a yacht as being the bestpossible way to ensure a successful, quality holiday. "For thosewho are having to work considerably harder during these times,a successful holiday is even more important than ever before,"she says. FUTURE FOCUS The charter market relies heavily on repeat clients and refer-rals. The majority of established brokerage houses have an80/20 split when it comes to repeat and new clients. But asDawson stressed, the market needs to attract new clients tofeed other sectors of the industry - from new build to bro-kerage and management. The outlook for many repeat clients changes with time asthey are able to move on to bigger yachts and so the repeatclients become new clients in the large-yacht sector.Dawson has a number of repeat charter clients and over theyears they have typically moved up to increasingly largeryachts. "There are certain clients with whom I have dealt forseveral years and the majority step up to bigger yachts eachtime they charter." Dawson has noticed that the age of herWhether or not a client has been affected by the financialcrisis, many still perceive chartering a yacht as being the best way to ensure a successful, quality holiday