When it comes to chartering (renting) sailing and motor yachts, beginners often have the usual reflex in other areas to search for themselves and not hire agents so as not to “overpay.”

To prevent our students from making such mistakes, at the end of the IYT Bareboat Skipper course, we give a separate voluminous lecture about the structure of the charter market, insurance, and other legal and organizational aspects. And for those who did not study with us, the founder of Seanation, Alexander Babitsky, wrote this article.

It's about why borrowing boats directly from charter companies is often a bad idea, why working with a trusted broker (!), on the contrary, is a good idea, what is wrong with aggregators, and much more.

This text will focus on renting small (<24m) sailing yachts (primarily) and motor yachts (especially secondarily). 

Section one: market participants

1. Customers
   Skippers are licensed, with enough skill and courage to take control of the boat. All others are just people who want to spend time on a yacht — rent it and hire a skipper.
2. Charter companies (CAs), often referred to as fleets
   ‍These are firms that manage yachts: they rent them out, maintain them, and do everything to keep the boats alive and customers happy. It does not always own all the yachts of a single charter company. As a rule, part of the fleet is actually owned, another part is under management, and a third is leased. But for other market participants, this does not really matter; boats are boats.
3. Charter brokers
   ‍Intermediaries between a charter company and its end customers — skippers. The word “intermediary” has a negative connotation in Russian and is associated with a meaningless character who parasitizes both market participants. In the yachting situation, this is fundamentally wrong, as in most cases, it is the charter broker who makes the deal between these participants possible. But more on that later.

And now, it should be noted that brokers can be divided into several types:‍

a) A private broker is a person who has somehow created his own customer base and takes orders.

b) An agency is a company with or without a physical office, specializing, as a rule, in various types of yacht services: charter brokerage, charter/yacht brokerage, etc.

c) An aggregator site is the same agency that has designed its own search page on the Internet and receives orders that have already been formed and sometimes paid. The format is familiar to all of us when it comes to hotels and air tickets. But unlike the ticket purchase case, where the buyer knows exactly which airline they will fly, most aggregators will not show the client which charter company operates a particular boat before payment. And after payment, it'll be too late to resist. This is one of the most critical problems faced by aggregators, but it is not the only one.

GDS or Global Distribution System — special systems where charter operators place all their charter offers. The schedule is also kept there, and you can see the prices and availability of boats in different weeks. GDS are B2B systems; only charter companies and brokers have access to them. It would seem that a market participant is not very important to the end customer. But no, it very much is!

It is the GDS that equalizes the capabilities of all charter brokers, as they are all connected to all GDS by default. In other words, all charter brokers offer customers a choice of the same charter yachts at very similar prices. Brokers simply do not and cannot have any “additional” sources of information about boats on the market. Therefore, choosing a broker only matters in terms of your liking and their services, but nothing more.

Section two: interaction between market participants

It's about everything but money.

You should start with the main thing — the client's desire to charter a boat. About such a boat on such and such date, in about a certain region, for about that kind of money. Following this desire, the skipper has several options, depending on how well he formulates his tasks.

The client knows exactly where, when, and from which charter company he wants to rent a yacht

‍Moreover, he knows that this charter company has the right yacht for him. In this extremely concise case, the best solution at first glance would be to contact the charter company directly and place an order. But then you'll have to dive into the fascinating world of the charter market.

Most charter companies have absolutely horrible websites that don't allow you to place an order, let alone pay for it. In most cases, the skipper will write his booking request by email and receive an answer and invoice for payment — only a few charter companies around the world accept card payments. The whole further process will also be very analog: emails, Excel, Word, and swift transfers. Everything is in the best traditions of the early 2000s. On the other hand, the skipper will feel that he did not let the nasty intermediary (broker) get rich, and maybe even saved money (most likely not).

The skipper (client) more or less knows where, when, and what kind of boat he would like

There is no need for advice on the waters — the skipper has already been there. He just wants to book a yacht in an extremely quick and easy format. Charter aggregators have been created for this case. They don't tell, advise, or consult anything, giving them the opportunity to make their own decisions based on the inputs on the screen and their experience. As I wrote above, which charter company drives your chosen boat will, in most cases, remain a mystery to you until payment is made, and this is extremely inconvenient in many cases. For example, the skipper had already traveled to Greece and was dissatisfied with a charter company’s service, codenamed “X.” There can be many reasons for this: meticulously counting the staff down to the forks on the checkout, nitpicking about the condition of the boat and trying to shake it off “to the fullest” for any scratch, refusing to meet the needs of household matters (for example, giving out an extra blanket or fixing something). In order not to run into these same unpleasant charters again, he will either have to avoid using aggregators at all or write to support, asking them to clarify whether this particular charter company is running this yacht. Communicating with support kills all the advantages of using aggregators, as their main advantage is full automation. However, several aggregators have begun to show charter company names in search results — finally.

Nevertheless, yacht aggregators, unfortunately, remain very far from their older brothers with tickets and hotels in terms of usability. And the reason for this is charter companies and their work with GDS. The fact is that it is almost impossible to achieve full booking automation since different GDS are poorly, or not, synchronized with each other, and many charter companies use more than one platform.

Bottom line: two different brokers may try to book the same boat with the same charter company plus/minus simultaneously in different GDS. Both will succeed, but after a while, one of the customers will receive an email stating that his paid order (yes, because the aggregator asks you to pay immediately) was canceled due to the boat's inaccessibility. Then, dull correspondence with support will begin with alternative boats, dates, charter companies, and waters — the aggregator's task is not to return your money under any circumstances. Such cases are not as rare as they might seem. Therefore, the booking process on aggregator sites is automatic only until you deposit money. Then all high technology is canceled, and you quietly wait for the booking confirmation and fill out the crew lists in Excel, receiving and sending them by mail.‍

The skipper generally knows what he wants out of a vacation, but he is quite flexible and would be happy to discuss options

This is the case specifically for a broker with a human face. A private owner or an entire company does not matter. The main thing is to speak (write) to the client at the other end in a polite and competent manner. Let me remind you that all brokers see GDS for all boats available; exclusives are extremely rare, and in most cases, you don't need them. Therefore, you should choose a broker according to the following criteria:

• comfortable communication
• suitable payment methods and terms
• trust built by previous experience, feedback from other customers, or overall image

You can go to a good broker with absolutely no specifics or a minimum of them: they will explain that the “a/c” icon without the generator icon will only keep you cool when parked in the marina. They'll suggest that a Turkish cruise will be a charter starting in Gocek, as beginning in Marmaris is only suitable for relatively long trips. And that a boat made in 2010 in Greece and a similar boat in Norway are not the same thing at all. The broker will warn you against booking at not-so-good charter companies and explain why it is sometimes worth overpaying a little. And he'll do it all, so you return to him next time. And now, it's time to move on to the section on money and the motivation of market participants.

Section three: money and motivation

Pricing first

As you already understand, all boat prices are in one place — at GDS. There are also brokerage fees ranging from 10 to 20 percent in the standard version. These fees are paid to brokers by the charter company for each booking. The client does not pay anything in excess of the charter price; only the charter company bears the broker's costs. At the same time, no decent charter company will ever dump, charging prices lower than those offered by brokers on B2 °C resources or their own websites. It is obvious that brokers will not work with such charter companies. Therefore, in most cases, when booking directly with a charter company, the skipper will pay at least the same amount as when booking through a broker; it will simply be the fleet, not the broker, who will make money from it. Yes, you can ask for a discount. But a charter company is not really interested in direct customers, and here's why.

Most end customers — skippers — change the waters of their travels. Of course, there are fanatical fans of Greece, but they also cheat on it from time to time with its neighbors. Most people alternate countries so as not to get bored. And not so many charter companies can be called international; that is, they have bases in different countries. To be precise, there are only a few such companies. All the others can be called local or regional, with bases within the same waters or even with one single base.

And for such companies, hundreds and thousands of brokers are the business engines, not just a few individual clients. After all, such a client will come 1-2 times and will not return, and a broker may be offended if he finds out about dumping from the charter company. Therefore, when booking directly, the client usually pays in full, in which case both the charter company is good, and the brokers are not offended.

Of course, there are exceptions, friendships, and regular customers. But there are no rules without exceptions, and the rules are described above.

What about discounts when buying a charter from a broker?

They're much better. After all, the broker is interested in every client, as it offers not only one area of water but the entire yacht charter market. Therefore, God himself told the broker to share part of his commission with the client so that he would evolve from new to permanent.

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