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The Caribbean Charter Industry and the Economy

What do global economic woes mean for the Caribbean’s yacht charter industry for this summer and for the upcoming winter season? All At Sea asked a few of the major players for their perspectives on this issue as well as what their companies are doing proactively to keep the industry floating at high tide.

From October to December, says Dick Schoonover, who manages the clearinghouse CharterPort BVI in Tortola, British Virgin Islands, “Advanced bookings resembled the stock market. Stocks dropped and we were down by just that much. Then, in March, we had 57 bookings compared in 58 in 2008, just about the same. What is clear is that clients aren’t booking in advance. Our summer calendar was virtually empty as of the end of March.”

Crewed charter yachts that are doing well, says Erik Ackerson, executive director of the Virgin Islands Charteryacht League (VICL) based in St. Thomas, USVI, are those with faithful repeat customers. “New folks to charter are the ones feeling the pinch and are using creative ways to market, like offering added value such as tai chi, yoga, spa and beauty treatments.”

Yet, says Narendra ‘Seth’ Sethia, base manager for Barefoot Yacht Charters, headquartered in Blue Lagoon, St. Vincent & The Grenadines, “I don’t think that enhanced amenities or positioning are going to play a role. The problem is to persuade people to come here in the first place. If Dad finds that to take him, his wife and his two kids to the Grenadines will cost him $US 3,500 in air fares alone, that’s where our problem starts because Dad is not going to pursue this vacation idea any further. Thus, it doesn’t matter so much what we have at this end, i.e. amenities, facilities, positioning. We need to hook the customer first.”

Price discounts aren’t the way to go, says Charterport’s Schoonover. “I brow beat this into our yachts – no discounts, no specials, no value cutting. What’s going on is not a function of rates. Costs aren’t going down. In fact, they’re going up. One charter couple told me that their food costs were 30 percent higher this year than last.”

Nicola Massey, Tortola, BVI-based marketing manager for Horizon Yacht Charters, says, “Although we have not cut our rates, we are offering some limited special offers which have been very attractive to our guests.”

In the Grenadines, says Barefoot’s Sethia, “Our difficulties here in the lower Caribbean are exacerbated by the very high costs of air access, so we have always had to be extremely price-sensitive, even before the economic down-turn. The summer months are going to be far more difficult. We already offer free sailing days in Mid and Low seasons but will probably end up offering even more – either a percentage discount for a shorter charter, or perhaps something like ‘two weeks for the price of one’ for those who can afford the time.”

Sunsail, based in Clearwater, FL, is offering more affordable charter vacations through choice of yacht. “We’ve just announced the introduction of the new Sunsail 384 catamaran for 2009. This is an ideal entry-level cat, which will be affordable as well as comfortable and fast. It will be the first yacht in our fleet to feature solar panels, in line with our focus on green solutions for our yachting products, and arrives in the Caribbean next winter.”

Looking ahead, the VICL’s Ackerson says, “We’ve met with the governor who is signing an executive order to establish the VI Marine Economic Development Council. The Council will be federally-funded so we can go after grant money for a stronger marine services infrastructure. In addition, we plan to host next fall’s yacht show, now named the St. Thomas Yacht Show, between the Ft. Lauderdale and Antigua shows to encourage more megayachts and open up this market.”

The charter industry will survive as the Caribbean is recognized as a first class sailing destination, says Horizon Yacht’s Massey. However, “the charter industry needs to continue to work with Tourist Boards, ensure we constantly improve upon our standards, respond to demands in the market and make a lot of noise – exposure is crucial.”

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