Coronavirus and the yacht charter market: So, what do we do now? (Part 2/2)

This Article is part two (2) of a series of two (2):
Part 1: What have we learned from the past?
Part 2: How is the industry and market reacting to the issue?

Considering buying a yacht for charter?
Make sure to also read the: How to make the most of yacht charter investment during Covid-19

Introduction:

The global yacht charter market, like all sectors of the economy, is feeling the effects of the coronavirus pandemic.

We are here help clear up the confusion and put the current unfolding events in perspective and gather what we have learned over the past 30 years dealing with issues on the international yachting market.

We will be sending our regular newsletters to keep you well-informed of developments, but first let’s look at what immediate Information we have at hand and what Advice you can expect from us:

Yacht-Match is here to answer all of your questions

Yacht-Match is here to answer all your questions as we navigate these challenging times together.  We will continue to strive to make sense of what is a formidable challenge for all of us in the industry and for you as a prospective customer for charter ownership.

We remain true to our Core Values and would like to reassure our consultancy clients and prospective customers that we will continue to work closely with you, providing expert advice, professional consultancy services and unbiased information. We are here to propose solutions and show you what opportunities lie ahead, ensuring what is best for you!
Take advantage of our unmatched industry expertise and impartiality!

FAQ: a working document for you to explore

Be part of a live discussion group and working document on how we are addressing the issues that you may face as a potential charter boat owner.

See the FAQ page here!

Live Webinars

We are planning two sessions where we will host a live Q&A on:
1) “Issues facing the yachting industry and the affects on the charter market”
2) “How to make the most of yacht charter investment during COVID-19″

Join in and learn from questions and answers being addressed in our live webinars hosted by the co-founders Dirk Agter & Viktor van Savooyen.

Sign up for the Webinar here!

Part (2/2)

How is the industry and market reacting to the issue?

The leading industry news outlet IBI is closely monitoring the global boating market response to the COVID-19.
Yacht-Match collaborates with partners worldwide who will play an active part in contributing to these channels and publications. We will support our charter operators by facilitating online matchmaking with charter agents.

Several aid packages and financial stimulation are directly being inserted into the industry and are being greeted with a sigh of relief, as IBI writes after it was announced that in the United States of America an ear-marked financial aid package would reach the domestic boat building industry:
“The biggest component of the measure, which has the National Marine Manufacturers Association (NMMA) “extremely pleased” with the package, is US$350bn to small businesses to keep employees on the payroll and support operational expenses. Boatbuilding qualifies at less than 1,000 employees.”

IBI also states that businesses should be confident this is the first of several financial packages that will come from the federal government.

Boat shows are being cancelled

Boat shows are being cancelled and most of our colleagues are unable to travel for the time being. To accommodate clients seeking information on chartering and the yacht charter business, Yacht-Match is opening new channels of communication which include the above FAQ and Live Webinars. Yacht-Match is currently acquiring image and video permission to host a future ONLINE BOAT SHOW.

As boat shows have been cancelled, with no show nor any type of follow up events, the industry is lacking the initiative that the bigger museums started many years ago with online tours and downloadable material.
Some shipyards, including the well-known Fountaine Pajot and Dufour Yachts took immediate action with a futile attempt to create an online boat show, inviting their audience to explore the website and the 360-views and images of the catamarans series.
Some other shipyards, like the Beneteau Group, including their new catamaran project Excess catamarans, where forced to cancel their yearly sea trial event in Port Ginesta, Spain.

Both local and international boat shows are being cancelled calling for other means of interaction. New digital platforms and live tours are created as an response.

We (the dealerships/agencies/brokers) are still receiving invitations from many of the shipyards to visit their launch sites (commission sites) for guide viewings and sea trials in late May and early June. With the current travel restrictions, we believe that the events won’t be successful.

Shipyards have called out for government aid

Most shipyards will have delays (suppliers being late with delivery) and several of the production line shipyards are temporarily suspending their production, while others like the well-known blue ocean cruising performance catamaran brand Outremer and its neighbour, the ultra-bespoke Gunboat, have applied a different practice where they have changed their routines and practices allowing their workers to work in shift and with a slower pace and with less risk of the production halls being overcrowded.
The same goes for German shipyards, namely Bavaria Yachts, whom stated last week that they will continue their production and applied a set of new practices to their production line ensuring both the safety of their workers and maintain a steady output to keep up with 2019 demands with some minor delays for 2020 and 2021.
Its French counterparts, the Beneteau Group and Dufour Yachts & Fountaine Pajot, are all suspending their production.
Italian shipyards have all halted their production and only marine repair companies in the marine sector and certain suppliers will remain open past today.
Most Polish boatbuilders continue to operate under increasingly stiff restrictions.

Shipyards and boatbuilders are calling our for government aid during the corona/covid-19 crisis.

The conclusion is that the smaller custom and semi-custom shipyards are cooping somewhat better with dramatic impact that new governmental policies and restrictions have on their production. German production efficiency is again proving to be useful not only in producing low cost & JIT during an unhindered market condition, but also during times of dramatic change in policy and working conditions.

The charter operators have changed the payment policies to help the charter guests

The unprecedented event of COVID-19 has become a huge threat to the tourism industry and some governments have been quick to react to protect businesses. Governments have fast-tracked law changes and the global charter companies, such as Dream Yacht Charter (DYC) are applying it as soon as it is ratified. 
These law changes in some countries mean customers cannot claim a refund during the Coronavirus pandemic period, instead they are allowed the opportunity to reschedule. This has been voted for recently by governments in France and Italy, and Germany isn’t far behind.

Most of the global charter companies and the independent local charter operators are applying their new booking and payments policies by allowing a smaller down-payment (10-15% instead of 40-50%) for reserving the charter week and offering free-of-charge changes to their charter guest bookings within 2020 and a minor charge for clients wishing to re-schedule the bookings to 2021.
Most notable among the big global charter operators is Dream Yacht Charter (DYC), with +1200 boats in their fleet, and with regional charter agencies around the world, several merges with local charter operators, a sizeable market share in the yachts sales business and a formidable leasing structure facilitating their charter ownership programs. Risks are in other words high and spread out through the industry affecting several parties and their interest. The charter business is arguable the most vulnerable part of the international boating industry.

The industry is watching attentively for how Dream Yacht Charter will respond and recover from the crippling affect that corona virus has on the whole charter business and its big global players.
The response from DYC will set the tone for how competing companies in the same sector, such as Navigare Yachting, Moorings and Sunsail, who are scaling their business model on the same principals, will fair against its biggest rival.

Founder and President Loic Bonnet is taking active measures to make sure the survival and continuous growth of his mega charter business empire Dream Yacht Charter.

Just recently, Loïc Bonnet,  founder of DYC, announced via email, a suspension of payments to people in the DYC guaranteed income ownership program for 6 months with an extension to their contract for 6 months in return.
“The second priority is to ensure the sustainability of our businesses. We have, as I am sure you have, been working tirelessly to guarantee the functioning of our businesses for the coming months so that we can recover quickly after the pandemic restrictions are lifted. We have drastically reduced our costs, secured a government loan and you can be confident that we will successfully see this through until September…..”

Considering an investment and becoming an owner of a boat in a charter program or ownership?

Make sure to read our next article on how to discover opportunities amidst the Covid-19

Read it here: “How to make the most of yacht charter investment during Covid-19”

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