Yacht Charter Procurement Intelligence: A Deep Dive

Europe dominates the global yacht charter category, holding a significant portion of the global market share.

The global yacht charter category is anticipated to grow at a CAGR of 5.6% from 2023 to 2030. Growth of the category can be attributed to rising demand for recreational and competitive boating and sailing activities, growth in the number of High-Net-Worth Individuals (HNWI), increase in disposable income, growth of marine tourism, surge in expenditure on luxury vacations, and boost in demand from the corporate sector. For instance, corporate yacht charters are becoming increasingly popular among executives and companies for closing business deals or organizing important meetings in distinct locations and settings that are away from office distractions. Key factors restraining the category include elevated seasonal pricing, high taxation in certain regions, cautious consumer outlook due to geopolitical and macroeconomic uncertainty, and environmental apprehensions related to yachting activities. For instance, French Tax Authorities declared a bulletin involving changes to Value Added Tax (VAT) levied on yacht chartering activity, applicable to contracts signed after the 1st?of November 2020.

Key technologies driving the global yacht charter category include integration of smart control systems, state-of-the-art navigation systems, advanced entertainment systems, virtual reality (VR) and augmented reality (AR) experiences, andadvanced satellite TV and communication systems. For instance, modern luxury charter yachts in Miami are increasingly furnished with innovative smart control systems that enable visitors to easily manage numerous aspects of their cruise. These systems can be accessed by dedicated mobile applications provided onboard. Passengers can use these systems for various aspects such as climate control, navigation, and lighting adjustments. In another example,state-of-the-art navigation systems positioned in chartered yachts in the U.S. include components such as sonar, radar systems, and GPS to ensure a smooth and safe voyage. Real time marine traffic and weather updates are available to passengers via such systems. To illustrate further, advanced entertainment systems deployed in chartered yachts typically include immersive sound systems, flat-screen and high-definition TVs, gaming consoles, and extensive music libraries.

The yacht charter category?is fragmented and consists of a large number of global market players, turning the category to be competitive. Key players in the category set themselves apart by continuously upgrading yachts with latest technologies, adopting effective marketing strategies, having a strong online presence, and emphasizing customer satisfaction in order to enhance their service portfolio and to stay competitive. Moreover, key players are actively engaging in partnerships with travel agencies, luxury brands, and caretaker services. Additionally, key players are also focusing on improving the overall yachting experience for end-users by actively training crew members, improving components such as websites and online booking portals, and enhancing onboard connectivity in yachts. Buyers in the category possess high negotiating capability owing to an extensive supply base.

Order your copy of the Yacht Charter Procurement Intelligence Report, 2023 - 2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

Yacht acquisition costs, cost of crew members and staff, costs of provisioning food and beverages, fuel and dockage costs, maintenance and repair costs, and other costs such as insurance, sales and marketing, taxes, compliance, and contractual costs are the key components of this category. Yachts operated by a charter fleet or a charter service provider are usually privately owned. The service provider is responsible for advertising, listing, booking, and conducting interactions with end-users. Yacht hiring costs and costs of crew members and staff account for the largest share of the cost structure. A prominent pricing structure used in this category is fixed fee-for-service pricing which ensures that a service provider will receive the approved sum of money agreed in the contract and have a predetermined pricing for the services indicated. Alternatively, a variable pricing structure may be used based on the time duration, scope of services, and materials/resources utilized in providing the service. Additionally, a hybrid pricing model may also be used which comprises of a fixed fee (also known as base charter fee) and a variable fee which changes according to seasonality, charter agreements, and provisioning costs. The common types of charters based on contract type are bareboat, skippered, and crewed charters. For instance, a bareboat charter does not include a skipper and crew but offers solitude and freedom for end-users. A skippered charter includes a captain but excludes the crew and is suitable for end-users with no experience in sailing. On the other hand, a crewed charter includes a captain to navigate the yacht as well as a crew to prepare meals and beverages, which is appropriate for end-users having needs such as comfort, relaxation, and luxury.

Europe dominates the global yacht charter category, holding a significant portion of the global market share. Key driving factors for this region include robust growth of marine tourism, extensive range of tourist destinations, rise in upper-class and HNWIs, and a surge in the number of vessel permits being issued. For instance, countries such as Spain, France, Greece, and Croatia are key tourist destinations in Europe having a strong demand and supply in this category. North America accounts for the second largest share of the global category owing to a diverse presence of coastal regions and cruise destinations. Asia-Pacific is expected to be the fastest growing region during the forecasted period due to rapid urbanization, improved standard of living, rise in disposable income, and a growth in nautical tourism. Comparing the rates charged by various service providers, assessing the yacht capability based on size, type, and end-use, checking the experience level and reputation of service providers, and evaluating the type of contract (e.g., bareboat, skippered, and crewed) are some of the best sourcing practices considered in this category.