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The Do’s and Don’ts of Chartering your Boat

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When I mentioned to my partner, Mike, that I was writing an article about setting up a charter business, he retorted: “Anyone who wants to buy a charter boat should a.) have his/her head examined, and/or, b.) have a lobotomy.”

Chartering your boat is at best a risky business.

Despite the obvious appeal of living and working on the water, not everyone who enjoys boating can survive it.

Almost six years ago, four of Mike’s survey/captain/consulting clients began charter businesses. Only one is still in business, AND they supplement their income by working with other yachts.

Mike’s been in the charter business on and off for decades on yachts ranging from elegant wooden motor yachts, to scallopers, to a floating restaurant. He ought to know better, but he’s doing it again. And, for the most part, we’re enjoying the hell out of it.

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Shortly after meeting six years ago on a yacht delivery (he was the paid captain; I was unpaid crew/provisioner), Mike and I dove headfirst into the charter business by purchasing our 1925 Elco motor yacht, Hermione. We had visions of chartering her extensively, but Hermione had other ideas. Each time we felt we were close enough with cosmetic and structural repairs to entertain paying guests aboard, she would break down requiring another visit to the yard.

In early 2011, after repairs were truly under control, we lost the boat in a spectacular fire at McCotters Marina in Washington, N.C. We had already booked a number of charters for the following summer.

Instead of taking our insurance money and counting our blessings, we spent that winter and spring scouring the east coast for another classic motor yacht. We purchased our beautiful Cygnus II, a custom-designed 1930 vessel that should have been way out of our price range, in Jacksonville, Fla.

Like any yacht, it needed modifications, but a year later, we find ourselves surprisingly successful in our niche charter business. We specialize in short cruises with cocktails and hors d’oeuvres. We also offer waterway cruises which we refer to as “boat and hotel cruises,” where guests travel aboard during the day and stay at nice hotels at night (we handle arrangements and luggage transfers).

Our venues change with the season: Winter charters in Vero Beach, Fla.; spring/fall charters in historic Beaufort, S.C.; and summer charters in the Thousand Islands along the Canadian border.

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A classic wooden yacht has a specific clientele.

They tend to be older folks for whom the word “recession” has only vague implications. Others are business people entertaining clients and families celebrating events. Since our summer cruises are in an area where people often get married on private islands, we also find ourselves in demand for wedding parties.

It’s not easy working on charter boats, and it can put a lot of stress on a relationship.

Overall, Mike and I do well together with charter responsibilities, but we thrive on challenging situations.

And quite honestly, while the captain has enormous responsibility, the mate does a tremendous amount of work between provisioning, cleaning and staging, food prep, service and cleanup.

We have found that our positive attitude and passion for sharing our love of classic yachting has been a huge asset in setting up our charter business. We love making the boat our business, but it’s definitely not for everyone.

Is Chartering Your Boat for you? The Do’s and Don’ts of Chartering your Boat
Is Chartering Your Boat for you?

The Do’s and Don’ts of Chartering your Boat

Based on our experience, I offer the following observations to anyone foolish enough to contemplate this type of misadventure:

  • Don’t enter a charter partnership. If for some reason you do decide to partner, make sure it’s with some-one who doesn’t expect to earn passive income from his or her investment.
  • If you don’t like all types of people, and don’t enjoy hospitality, don’t start a charter operation. No matter how much you like to entertain, you will find that chartering requires patience and protracted smiling.
  • If you are a husband/wife or partner team, do both of you share the same enthusiasm? Chartering is hard work. If you both like sailing, cruising and dock parties, that doesn’t mean you’ll enjoy the charter business. For one thing, when you charter, you don’t have time to cruise.
  • If you are natural neatniks, you’re way ahead of the game. On the other hand, if you like to leave stuff where it drops, you’re in for a big surprise, as charter guests aren’t into personal clutter.
  • Make sure you can survive for a year or so without income. It may take you that long to get the boat, set it up, and prepare for chartering. Poor weather for a season or a down economy can do in many operations.
  • Don’t give up everything you own right away if you plan to live aboard. Just store it. You may find that chartering isn’t for you.
  • Set up your charters as a business (usually an LLC), and make sure you have adequate insurance to cover liability and damage to the vessel.
  • Before you buy the boat, force yourself to write a business and marketing plan. If nothing else, this will help you with the IRS (assuming you are writing off your expenses), but it will also help you focus on what’s actual practical versus your yachting fantasies.
  • Buy a boat that you like, but make sure it’s one that can accommodate the type of yacht charter business you plan to run. If you plan on overnight guests, make sure you have adequate staterooms and functioning heads. If you plan on wining and dining, make sure you have adequate food prep, storage and refrigeration areas.
  • Know your boat’s limitations. Many boats, like ours, are only approved for six-pack charters. Mike has a 100-ton license, and we can accommodate up to 20 people for dockside events, but under way we take six guests. The exception is a bareboat demise charter contract, under which the charterer leases the yacht and then hires the crew as a separate entity.
  • Location. You need to charter in the right location for the niche you plan to fill. Obviously this differs from fishing to sailing to classic cruising.
  • Check out the competition. Make sure you take an honest look at the boats already chartering in the waters you’ve selected. If they are doing well, is there room for yet another yacht?
  • Check out all state, local and marina ordinances where you plan to charter. When we were setting up in Beaufort, S.C., we had to appear before the city council. By the time we finished dealing with the state, city and county governments, we didn’t have time to charter. We also had to pay the marina 10 percent of our gross. Be mindful of states’ taxes on boats that reside in their waters, even if only for a couple of months each year.
  • Decide what type of food service you want to offer your guests. We don’t sell liquor because of the tax laws. We give it to guests.
  • Make a marketing plan. Advertising in vacation guides and talking about the yacht with everyone we meet has also been essential.

We’d LOVE input from some of you charter boats out there!  Chime in on the comments below…

Jody and Mike just returned from a Classic Yacht Association meeting. For more information on their charter business, visit www.cygnusclassiccharters.com.

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  1. I have my 6 pack license but I have been too afraid to actually charter. As I have gained my courage and begin to prepare to launch my future charter business I continue to research. I came across you article and applaud you for your transparecy. I truly appreciate your honesty. Ty Tulio

  2. Your article was very helpful. I am in the “idea stage” of researching about having a party boat. Basically the boat could be rented for a certain number of passengers, BYOB, for this amount of time with a captain. Any direction or advice you could offer on something like this would be greatly appreciated. Thanks again for your informative article.
    Happy Sailing!

    • Dear Tracy – be careful of permits, liquor laws, and coast guard capacities. If dockside only, you are okay.
      The easiest way to do it, depending on the size of vessel and # of passengers, is to work a relationship with a good local caterer.

      I market our cruises, provision, cook, bartend, serve and run the boat, in addition to chatting with passengers. It’s a lot of work.

  3. What a great article and so true on many levels. We have been rebuilding our motorsailer for several years and she is now ready to charter. We want to take guests out for several nights to different exquisite bays in the Baja where there are plenty of charters. We don’t want to bareboat so will be full service. Can you give me ideas on provisioning for a 6 pack charter over several days?

  4. Thank you so much for this info. It just reconfirmed what I’ve slowly been doing to get ready to find the boat I want to use to charter. Your list looks like my check list. I’m already in the yachting industry working 80-90 hours a week. Running charters will be a break for me.


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