Yacht Charter Process [Complete Guide]

A superyacht charter is the most glamorous method of vacationing. Whether you choose to cruise to the Amalfi Coast, snorkel the blue waters of the Caribbean, or enjoy the best lobster rolls Maine has to offer, a charter will always provide a unique luxury experience catered to you…with a full crew to wait on you day and night as you enjoy fine foods and libations. Where do you start, what are the costs, and what should you expect?

This is the third in a series of papers produced by the Denison Superyacht Team about large yachts and their ownership and operation. The focus of this paper is the large yacht charter market, which includes yachts greater than 24 meters in length and with a full-time crew. We will look at the process from the perspectives of both the yacht owner and the yacht charterer.   

Charter Yacht Owner

When buying a yacht, the possibility to recover some of the operating costs by offering it for charter may be a consideration for many yacht owners. A yacht owner may choose to charter his or her yacht for the following reasons:

• • Added Revenue
• • Tax Advantages
• • Yacht Stays Professionally Maintained
• • Captain + Crew Honed to Service Perfection

Qualifying a Yacht for Charter – Once a yacht owner decides to list his yacht for charter, the yacht must first be accepted as viable for charter by the flag state. To qualify, the yacht must meet standards of construction, maintenance, and operation that are required by the flag state safety codes and include not only the physical elements of the yacht but, depending on the tonnage and requirements of specific flags, softer items such as crew employment terms, security plans, and more. Furthermore, the approval of the yacht’s insurer should be sought. Only after these initial steps are complete can the yacht owner take the next steps to listing the yacht as available to the charter market.

Listing the Yacht on the Charter Market – The yacht owner will contract a service provider to represent the yacht in the “wholesale charter” market. Here, we run into some of the jargon that can be a distraction in this world. The “wholesale” charter service, also known as “charter management” or sometimes “charter marketing”, is the service that the owner needs here.

Learn More About:

• • Flag State Certificates
• • Charter Management Agent Responsibilities

Yacht Charter Client

Not everyone wants to own a yacht for themselves, but some still will choose to enjoy the benefits of the yachting environment on an occasional basis. What better way to have an unforgettable getaway without the capital investment on the platform itself? How do these clients find a suitable yacht, and ensure themselves that the service, location, and facilities of the yacht will meet their expectations?

Finding a Charter Broker – These clients enter the “retail charter” market and need to find a charter broker to represent them. The charter brokers represent the chartering clientele and it is their business to know the market and be familiar with the yacht locations and the crew. Armed with this knowledge, the broker will be able to identify a suitable yacht (or candidate yachts) for any client’s needs.

Charter Broker Finds a Charter Yacht – When discussing the market with their broker, the charter client should have in mind certain preferences such as the size of boat, budget, the number of people in their charter party, charter destinations, and vacation dates. The charter broker will then advise on suitable yachts. Clients should remember that in the majority of cases for charters on “foreign flag” yachts (Cayman Islands, Marshall Islands, etc.), there is often a statutory limit of 12 guests.

Learn More About:

• • Retail Charter vs. Wholesale Charter
• • Charter Broker Responsibilities

Charter Contracts

Signing the Contract – After the charter broker and their client have identified a suitable yacht, the broker will communicate with the charter management agent to confirm the yacht’s availability, amenities, location, and other matters. This exchange may also include the captain or crew of the yacht. Once a price is agreed upon, a contract will be put in place and signed by stakeholders on both sides.

Preparing for Charter – With the contract in place and the monies being transferred as required by the contract, the preparation process for the crew will begin. The captain, chef, and charter management agent will likely prepare a preference sheet to be sent through the charter broker to the client. This sheet allows the luxury process to be refined to include any food allergies, preferences for wine, possibly details on guided shore excursions, and more. 

Learn More About:

• • Charter Price Negotiation
• • APA (Advanced Provisioning Allowance) Fees
• • Taxes
• • Charter Itineraries + Excursions

Charter Delivery

The charter will start on the date and time and at the location identified in the charter contract. The client should expect their broker to check in with them to ensure that all has gone smoothly with boarding, and the captain and crew will look after them throughout the charter. There are countless options when it comes to activities on the water and at the coast of all continents to even try to fully expand on how a charter will go. However, the client should expect that they will receive better than five-star service throughout the trip.

Tipping + After the Charter

Tipping – Surely it is not necessary to have a whole section on the topic of tipping, but it can be a controversial one and the amounts concerned can be significant. Some yacht owners will, in discussion with their captain and wholesale charter management agent, establish a tipping policy which—while perhaps not part of the contract—will be communicated through the charter broker to the client.

After the Charter – The charter will end at the date and time and at the location defined in the contract, and the crew will assist the client with their onward transfers. At that point, the remaining balance of the charter fee will be transferred to the owner. The client should expect to be asked for feedback on elements of the charter, such as if the service and experience were what they expected. This information will be used to improve and develop the yacht’s next charter offering.

Learn More About:

• • Gratuity Etiquette
• • Post-Charter APA Accounting Report

Looking for more details?

Receive the complete Yacht Charter Process Guide including:

• • Charter Preference Sheet + Itinerary
• • Charter Contract Details
• • Maritime Labour Regulations

---

This should not be considered a complete guide. For a better understanding of the Yacht Charter Process, contact Ben Farnborough.¹