|Chartering with an Eye on the Yacht Sales Market|
|Written by Kim Kavin|
|Monday, 16 July 2012 07:51|
I rarely write about the yacht brokerage market here on CharterWave. This is a website about yachts that are available for charter, not about yachts that are available for sale.
However, the just-published newsletter from Ocean Independence contains some sales-market information that I believe is important to anyone booking a charter yacht. Let me explain.
It's always been true that, at any given time, a decent percentage of the world's charter yachts are also listed for sale. That doesn't mean the yacht owners are actively, or even eagerly, looking to sell their yachts. Sometimes they are, and sometimes they have the boat listed for sale just in case the right buyer comes along. In the meantime, they accept bookings from charter clients. Usually, everybody wins.
The yacht brokerage market, like just about every other market, took a hit starting in late 2008 with the beginning of the global economic recession. Suddenly far more yacht owners wanted, or needed, to sell their boats. The market became flooded, and prices dropped. As a result, all of the sudden, charter clients had to be aware of whether or not their chosen vacation boat was for sale. Nobody wanted to book a charter and then end up having the boat sell to a new owner before the vacation could take place.
This situation has appeared to stabilize bit by bit the past few years, with the sales market calming down as prices adjusted to the new economic realities. However, the current newsletter from Ocean Independence--which controls the largest fleet of crewed charter yachts in the world--suggests that sales market machinations are once again becoming noteworthy.
According to Ocean Independence, there were a record number of price reductions for yachts on the brokerage market during the month of April. Usually, the company says, about 40 yachts change their asking prices in any given month. During April, that number shot up to more than 75. The number of yacht owners willing to take less money in a sales deal essentially doubled. The yacht brokerage market, Ocean Independence says, is once again in "full readjustment mode."
The company does not comment on whether this is likely a one-time blip or the beginning of another prolonged situation for the yachting industry. My personal take is that when you combine this information with the absolute flood of offers out there right now for deals and discounts on charter yachts, as well as the fact that charter brokers say everything is open to negotiation these days, it's reasonable to conclude that we are looking at either the continuation of an unstable yachting market or the beginning of a new dip in the already-weakened market.
Only time will tell, of course, but for now, smart charter clients will hedge their bets by asking about the sales status of any yacht that they book for a vacation. Ideally, you want to charter a yacht that is not for sale at all. If you are booking a yacht that is for sale, then ask your reputable charter broker for an assessment of how actively the owner is trying to sell. How many price reductions have there been? How many of those reductions have been recent?
Plenty of for-sale yachts provide excellent charter vacations, and good charter brokers will help you negotiate contracts that protect your vacation investment no matter what. This new information from Ocean Independence, though, is a noteworthy reminder that these days it's important for charter clients to be aware of what is happening on the sales side of the industry.