Super yachts: What are the benefits of ownership versus chartering?
On a super yacht, luxury reaches new heights. Cruising on open seas with lavish amenities and impeccable service offers an exclusive lifestyle. It’s not just about cruising the crystal-clear oceans, it’s a life of indulgence, exploration, and unmatched luxury.
Super yachts bring the freedom to navigate seas worldwide, and each destination becomes a unique chapter, introducing diverse cultures, landscapes, and experiences.
Beyond picturesque landscapes and gourmet dining, super yachts are ideal for celebrations. Milestone birthdays, anniversaries and cultural explorations find the perfect stage against the backdrop of the endless horizon. Amid grand celebrations, super yachts offer a sanctuary for precious family time. The open sea becomes a floating haven, providing comfort and opportunities for families to connect and create cherished memories.
PRIVATE V CHARTER
Private ownership of a super yacht is the ultimate luxury. Having total control of all aspects of the yacht allows the owner to take full advantages of the asset. A privately owned yacht has the advantage of no commercial pressures on time/location that exist with a commercially registered charter yacht. As the sole user, if the owner decides they wish to cruise a different area than first suggested, a quick call to the captain makes this a reality. Fancy cruising further west after the Caribbean season rather than heading back to the Mediterranean? No problem, just let the captain know!
Sole private use of your super yacht has the added advantage of knowing no one has been sleeping in your bed, used your knives and forks, or causing any damage to your pride and joy. Your boat, your choice!
Private ownership, however, is the most expensive way of owning a super yacht. A private vessel does not have the running cost contributions seen when chartering out your vessel.
Ownership of a charter yacht allows for a significant offset on the running costs of a vessel. A rough guide for the annual running costs of a yacht is five-to-six percent of the yacht’s value (when new). The price of charting a super yacht is roughly one percent of the value of the vessel per week. During a charter, the charter principal will be responsible for almost all costs, including, fuel, food, docking, pilotage fees and also a 10%+ tip for the crew. The total additional charge to the charter normally exceeds 30% of the price of the charter.
It is easy maths to see how significant chartering out a yacht can be to its running costs. The advantages to the crew are also significant, charter tips can often exceed wages on busy charter vessels. This lure will allow the Captain and Head of Departments to have their pick of the bunch when it comes to crewing, raising the overall standards on the vessel and therefore the experience of the charter guests and the owner.
Owning a charter vessel does put some restrictions on the ultimate beneficial owner’s (UBO) personal use of the vessel. A successful charter yacht will be booked almost a year in advance. To use their own yacht, the owner must book out ‘slots’ well in advance. It is unlikely the owner will be able to pop off for a spontaneous week on his/her yacht as they could on a private vessel. As the vessel is commercially registered, there has to be a contract for each use of the vessel. Essentially, the owner will have to charter the vessel from themselves.
Historically the vast majority of charters take place in the Western Mediterranean Sea or in the Caribbean. Unless the UBO is willing to sacrifice the charter income, he/she will be limited in which cruising grounds he/she can send the vessel to.
The final option for yachting is to charter a vessel. Prices for the period of time are high but when compared to the year-round expenses, these numbers seem like a steal.
As mentioned above, when chartering a vessel, all costs incurred during the charter period are additional to the price of chartering the vessel, these are rarely insignificant. Once the holiday of a lifetime is over, and the charges and tips are paid, the charterer can wash their hands of all responsibilities to the vessel, these include: crew wages and travel, further fuel and dockage fees, maintenance periods, certification and much more. Often, charter guests repeat annually on the same vessel as they see the benefits of chartering far outweigh the burden of year-round ownership of a super yacht.
All three options of embarking on a super yacht journey have their advantages and disadvantages. An informed decision would ultimately depend on not only finances but also getting the most out of your yacht and crew. If work or other commitments prevent the owner from using the vessel for 11 months of the year, they may well feel it’s worth putting their asset to work on the charter market; or perhaps alternatively chartering until the time is right to buy.
Rory Delves has spent the last nine years crewing some of the most magnificent and extravagant super yacht gracing our oceans. He has cruised all over the world including the Mediterranean, Caribbean, Indian Ocean, and southeast Asia.
Rory worked his way up the crew ladder and was Chief Officer between 2020 and 2023. At the end of 2023, he left the seas and is pursuing a career in yacht brokerage and aims to bring his wealth of knowledge into his new field.
