Fractional Yacht Ownership
I came across a boat at the St. Maarten charter show that was part of a fractional ownership fleet. That means that instead of having one owner, the boat had multiple owners, just like a timeshare on land.
The couple running the boat spent a great deal of time trying to convince me that fractional ownership is going to end the charter industry as we know it, because everybody will want to own a piece of a yacht instead of just renting them by the week through charter.
I’ve heard this sales pitch before, and I still ain’t buyin’. The money just doesn’t make sense. In this case, the fractional owners had each paid somewhere in the neighborhood of $350,000 for their ownership stake, which entitled them to four weeks a year on the yacht. Now, that same yacht was chartering for $32,000 a week. You could charter the same yacht–with 25-percent typical expenses included–for a total of $160,000 a year. And you’d never have to worry about paying a penny on maintenance.
“But you won’t own anything when the charters are over,” the couple asserted when I pointed out this basic equation. They also pointed out that after two years, the fractional owners would be at the break-even point (assuming they used all their weeks onboard and didn’t have any unforeseen engine breakdowns or hull cracks).
My reply was simple: “Why would I want to own a fraction of a maintenance problem at any price when I can enjoy this same exact boat–and many more all over the world–for less money through charter? Why would I want to limit myself to visiting just one yacht in a location determined by more people than just me?”
Like I said, I’m still not ready to believe fractional ownership is any real competition for charter yacht vacations. It’s out there, and you should know it’s an option, but think twice before you sign on the dotted line. Charter does a much better job of preserving your options and, in most cases, your savings account.