Some yachts are requesting two- and three-week minimum bookings in the Med, which hasn’t happened since the 2008 crash.
Owners of leading charter yachts 130 feet (39.62 meters) and larger are doing something in the Mediterranean this summer that we haven’t seen since before the economic crash in 2008: They’re requesting two- and three-week minimum bookings for prime cruising dates in July and August.
“This hasn’t happened in years,” said one American charter broker who asked to remain anonymous. “Since the crash, these boats have been making deal after deal to get charters. This year, the boats that can take 10 or 12 guests, that are newer models with good amenities, they have bookings on the calendar. They’re going like hotcakes. It’s the first summer in a long time that I’m having trouble finding available boats for my clients. And the boats that are in demand, they can sense the market changing. That’s why they’re requesting these minimums again.”
The trend seems to be taking hold among even the largest charter yachts, with reports of the 241-foot (73.51-meter) Nobiskrug Mogambo and the 255-foot (77.72-meter) Abeking & Rasmussen Amaryllis both listed for charter with the multi-week minimums this summer. Each of those yachts has a weekly base rate approaching or exceeding $1 million, making the math eye-popping for a multi-week booking.
Now, that’s not to say that yacht owners are insisting on the minimums in order to close charter deals. In fact, several charter brokers told me that even when yachts make the request, the owners often are willing to negotiate with clients who book multiple weeks.
That could be because the majority of clients booking right now are not typically those who commit to multi-week charters. Fraser Yachts Worldwide recently reported that much of this summer’s Mediterranean charter business is being driven by clients from the United States, where the stock market is hitting all-time highs and the economy is showing signs of rebounding. The good news is that U.S. clients are once again booking charters, but the bad news for yacht owners seeking two- or three-week minimums is that Americans don’t typically take that many weeks off in a row for vacation. Longer charters are more typical of clients from Europe or Russia, where, by most accounts, charter spending remains tight.
“Someone described the European economy to me the other day as being like the U.S. three years ago,” says Katie Wray of Worth Avenue Yachts. “They’re in the middle of turmoil, and they are just trying to get their stability back.”
Wray says that while some yacht owners are requesting longer charters for prime dates, she also continues to see owners willing to work with her on giving clients deals.
“I can’t say that I’ve been seeing the strict minimums for the Med yet,” she says. “Some of the ones I’ve booked have either negotiated a low-season rate for high season, or taken U.S. dollars instead of euro.”
That currency switch is a discount to the charter client of about 30 percent at the current conversion rate, and it is in keeping with the kinds of discounts that have been publicly advertised for charter yachts in the Mediterranean since the 2008 crash. After five years of receiving such deals, clients certainly will have a hard time returning to the pre-recession mentality when yacht owners could say, “Two-week minimum, at my price: Take it or leave it.”
Then again, charter clients may soon have no choice. One broker told me that while researching yachts during April for a New Year’s charter in the Caribbean, she was surprised to see a number of top charter boats already booked well in advance. That, too, is a change from recent years, when most bookings have come in at the last minute.
“The owners aren’t holding tight on these minimums yet, but they are in a position where they may be able to change back to that,” the broker told me. “If there are only one or two great charter yachts left with availability by the time New Year’s gets here, then those owners are going to be in a really different position for negotiating than they have been in the past few years.”