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The Evolution of the USVI Charter Industry through the Eyes of a Charter Broker

WHADAYAMEAN there’s a charter yacht with a BATHTUB! You gotta be kidding! What will they think of next! The St. Thomas charter industry, showcased so successfully at Yacht Haven Grande during November’s 33rd annual Virgin Islands Charteryacht League show, was in its infancy in the early sixties.

The yachts were a hodge-podge, mostly old wooden boats that sailed beautifully but whose accommodations were sparse. Charter guests were mostly those from the hotels and, for a while, there was a "hot" little "charter wench trade" going on for the single charter skippers with the newly unhitched ladies in St. Thomas.

In the eighties, Ronald Reagan’s administration passed a law basically saying that people having a second home or business could write off their expenses—and this law changed the mostly owner-operated charter fleet to corporate-owned yachts. The boat builders got on the ball and Ted Irwin built his Irwin 52’s, moving the galley amidships, making bigger main salons, separate cabins, etc. These were the yachts that had bathtubs.

With this new evolution of charter yachts, so did the captains and crews evolve. The U. S. Coast Guard had long required skippers to have a captain’s license so that they could tell that a bow was the pointy end and the stern the square end. But what about double-enders? Hummm.
The Virgin Island Charteryacht League founded by Bob Smith in1969 improved the fleet and its business. Yachts had to be insured and have a brochure.

Competition between charter yachts really heated up, largely because of the corporate-owned yachts. The first big toy was the windsurfer advertised in the more expensive all-color brochures. About this time, fancy menus were included to show the guests that they weren’t gonna eat wieners and beans. More crews spruced up, wearing matching uniforms, particularly on the corporate-owned yachts. Scuba diving, largely the business of strictly dive boats, began to be included on the more expensive yachts.

Verna Ruan came to St. Thomas in 1971 to teach French and to work for Jim Long who started Caribbean Boating, the first boating magazine out of St. Thomas. She quit teaching after ten years to help Tom Stamp with his brokerage business. In 1982 Verna started her own charter business simply named Crewed Charters.

In the late 1970s Charlie Peet, a wealthy entrepreneur, started Charter Services, a second St. Thomas clearing house which rivaled Bob and Dorothy Smith’s Ocean Enterprises, the leader of the charter fleet. This competition helped to increased the charter business and bring more and better-suited yachts for chartering to St. Thomas. Business increased dramatically with Peet’s instigation of the Great Medical Getaway program which offered seminars aboard charter yachts and later ashore. Airlines were encouraged to offer discounts for these mass charter groups as were travel agents.

In 1982, Charlie’s wife Marty helped start a network with friends to share knowledge for marketing charters. Thus began the Charter Brokers Yacht Association or CYBA which became an excellent organization to help promote the charter business with laid-out procedures for attracting clients and booking yachts. Bigger and better yachts such as the Gulf Star 60s and the Irwin 65s increased the business so that the charter industry was booming. So were the bareboat fleets such as The Moorings started by Charlie and Ginny Cary out of Tortola.

Bob Smith had long encouraged the U.S. Virgin Islands Department of Tourism to help promote the charter business—such as advertising in prominent magazines. Sadly, the USVI government was willing to do only scant advertising. In 1986 disaster struck. A new tax reform law nixing the write-offs on second businesses drastically changed the charter fleet.

The corporate-owned yachts withdrew, leaving only yachts owned by a wealthy person who hired his crew or owner-operated yachts. The industry went into a decline for about fifteen years and charter-oriented businesses with them. The USVI government did not support the industry—there was no break on USVI taxes and little advertising even though charter guests spend at least one night and up to a day on island before or after a charter and thus bring in dollars. Much of the fleet migrated to the BVI and Tortola became the new yachting capital.

Recently it became essential to have bigger and better boat shows to attract more brokers to both the USVI and BVI. Today there are more regulations which are mostly good because they emphasize safety and how to handle guests properly in a general sense.  Megayachts with expensive overhead have sprung up, requiring mega facilities and purveyors. They have been going to islands other than the USVI until recently when the Yacht Haven Grande opened in St. Thomas—and more support businesses will be needed to accommodate them.The new USVI government is actively working toward strengthening the local charter yacht fleet and marine industry and this year the Department of Tourism became a major sponsor for the 2007 Fall VICL boat show.

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