Editor's Note: Charter broker Tim Nelson, who specializes in booking yachts 100 feet and larger through Seven Seas Yacht Charters (a CharterWave sponsor), attended the December 2008 charter yacht show on St. Maarten. Nelson shared his insights with CharterWave Editor Kim Kavin. Excerpts appear below.
How was this year’s St. Maarten charter yacht show different from shows of years past?
I thought it was the best show so far. There were a good number of boats there, thirty-plus boats. Even the Taste of St. Maarten event was better than in years past, and the yacht hops were very good. All the management companies that had boats in the show this year did a good job.
How does the St. Maarten show differ from the charter yacht show in Antigua, which ran on overlapping dates this year?
St. Maarten was pretty much all powerboats, with most of them being motoryachts over 100 feet. In Antigua, there is a combination of motoryachts and sailing yachts, with fewer motoryachts overall.
I was at the Antigua show, and the brokers were talking about business being down as much as 60 percent from last year. Was the talk in St. Maarten similar?
My business is up 40 percent over my previous record year. I’ve had a huge year, and I’ve heard other brokers say the same thing. So no, all the talk was not bad.
Having said that, I can tell you that starting in mid-October, it seems that business dropped off for me. For some brokers, it seems to have started back in July. I’m going to have a great year, fortunately, but like everybody else’s telephone, my phone is not ringing right now as much as it normally would be at this time of year. So I think that’s what brokers are talking about on the docks, more than the year overall. I think people are trying to gauge what next year will be like, and right now, it doesn’t look too good.
Do you see the entire crewed charter industry being down, or only certain segments?
It seems to me that it’s the really big boats that are hurting right now, the ones that came over to the Caribbean from the Mediterranean. The 120- and 130-footers are still fairly well booked up, but when you get up to the 180-footers or so, they’re the boats that seem to be missing out on the bookings.
I’m seeing it with my clients, my biggest clients, that they feel like the economy is shaky and they want to wait. If you were worth $100 million, and you just lost $30 million in the stock market, you feel not as well off even though you still have $70 million in the bank. It’s the uncertainty about the market’s future that seems to be affecting the largest yachts right now, not the actual amount of money that people have.
The idea that the biggest yachts are taking the hardest hit is surprising to me, given that during the Mediterranean season just a few months ago, it was the biggest boats that continued to book while the global economic crisis left the 120- and 130-footers sitting idle.
Right now, there are 26 boats over 150 feet still available for Christmas and New Year’s bookings. In years past, virtually all of them would have been booked by this time. And these are some nice boats. My clients would have booked these boats.
Boats from 100 to 140 feet for the holidays in the Caribbean, I’m showing 10 boats still available. And there are a lot more of those size boats out there to start with, compared to the bigger boats. That tells me that there are a lot more bigger boats still available, and that’s unusual from years past.
And the biggest boats that are booking, their owners are making deals. It used to be that for the holidays, you paid a premium price plus a 10-day or two-week minimum. This year is the first time in 10 years that I’ve heard owners dropping the minimums, dropping the premiums, and discounting the normal rates on top of that.
Why do you think the market has shifted this way, with the largest, most expensive yachts now feeling the economic crisis most acutely?
I’m not sure it’s a new phenomenon, in a way. During the September 11 terrorist attacks in the United States in 2001, at least at our company, the bareboat people just kept on going. They had their vacation dates scheduled, they had taken time off from their employers, and they just went on their charter vacations.
The bigger clients, on the other hand, the ones booking the more expensive crewed yachts, they slowed down. These are the kinds of people who may own their own business and can be flexible about when to travel. It’s not necessarily about dollars in the bank.
That’s what we may be seeing now, and why the bigger clients may be waiting. The guys at lower levels, they work for a living and don’t have as much flexibility on their travel plans. The guys who book the biggest boats, they have the luxury of being able to wait and see how the market shakes out, so they can take their vacations later.
Do you think there is a perception issue right now, too? I’m hearing that with companies going bankrupt and so many jobs being lost, luxury is becoming a bad word.
Yes, there is that idea that people don’t want to be seen as booking too big a yacht at a time when other people are hurting financially. I am absolutely seeing that too.
In some cases, it’s a simple matter of business. Clients who own companies that are laying off workers probably feel it's not really setting a good example for their family to go out and book a large yacht for the holidays.
Which charter yachts caught your eye at the St. Maarten show?
It’s tough to say which ones were the best because, overall, the quality of all the boats at the show was great.
A standout to me was the 295-foot Nero. It’s unique, it’s large, and the owner was there and gave tours himself. He was like a kid in a candy store. He has a background in electronics, so the boat’s audiovisual system is super. He also paid attention to soundproofing because he wants to be able to turn up the music on this system. And he wants to charter, so he was enthusiastic, and that was contagious.
The 190-foot Lady Sheridan was also very nice, and would be one of my favorites in the entire show. They were part of a progressive wine tasting that management company Burgess Yachts did a really good job of putting on. We were all there as a group for appetizers, and then we split into two groups and went to dinner on the newly refitted, 156-foot Va Bene or the brand-new, 132-foot Miss Rose, and then everyone went to the 173-foot Noble House as a group again for dessert. The sommelier for the event was excellent.
The 157-foot Azzurra II had a refit. They redid their upper deck. It has a really nice bar and five or six captains’ chairs, and I really liked what they did with the boat. Will Keiser is still the captain, and as always, he and his crew did a really good job at their cocktail party during the yacht hop.
The 146-foot Party Girl, that boat is very nice as well, and the crew are outstanding. They have a good group, and they know how to charter.
Did you notice any trends leading into the winter charter season?
These large swim platforms that are built into the yachts, a lot of the platforms themselves now lower directly into the water, and that’s something that I think is becoming more common in general.
It used to be that to get to the water or into a tender, the charter guest had to climb down a ladder on the boat’s stern. Then the builders started tacking on these little swim platforms to the backs of the yachts, but they were still hard to get to. Then they started building actual swim platforms into the hulls, with steps that were easier to walk down. Now, it’s the swim platforms themselves that go straight into the water.
It’s much more user-friendly for charter clients, and it’s a lot safer for guests getting on and off the boats. The crew can adjust the height of the swim platform to the sea conditions, it’s easier to board the tenders, and you can have a private little teak beach with your lounge chair right there in the water. These things are terrific, and I expect that they will continue to be a popular trend.
If you have additional questions, you can contact Tim Nelson at Seven Seas Yacht Charters.