You rented a luxury yacht for several thousands of EUR (or even several tens of thousands of EUR) with the departure anytime in summer season 2020.
Due to the situation of the Corona Virus and basically the entire World being on the lockdown you start to worry about your yacht charter situation. Governments are closing borders. Planes are staying on the ground. Nobody really knows what will happen in the next 1 month, 2 months, 3 months, …
And you start to wonder:
- What should I do with my business, job, family?
- How long is this going to last?
- What about that luxury yacht I rented out?
There are 3 main points we would like to explain:
- What is the decision of the entire Yachting industry on this topic?
- Why this decision is taken?
- What this means for the client?
A client reaches out to us with an email, that is valid and normal and common sense and it goes something similar to this:
”Nobody knows what will happen. I do not with to travel under such circumstances. Please send me my deposit payment back and when things calm down, we book again.”
Let’s explore why below scenarios are so important and what would happen if it would go the owner way.
SCENARIO NO.1ALL THE CLIENTS REQUEST THE MONEY BACK
It is most easy to explain this from a micro perspective.
So let’s take one owner of a luxury yacht and name him John.
John is a successful yacht owner. He purchased the vessel for 3 mio euros and this is his season no.4. He put all his life savings to buy this yacht and also take a huge credit and gave his house as a guarantee.
He performs every year around 15 weeks and is charging let’s say on average 40.000 €/week for charter.
For this year, he already booked 12 weeks and the client paid more than 200.000 € worth of charters (deposit payments).
As John is a successful owner he know how important it is to have good crew.
So he has the most important parts of his crew together for the last 3 years. He keeps his superstar skipper, chef and a hostess on his salary for the entire year. In the dead season this is pure cost, however to be able to keep them, he has to do this – all to make the clients happy.
Beside the cost of the crew, there are also costs of the dry dock. There is an every year maintenance that needs to be done every year and this year also he took a special cost, to build a flybridge on this yacht, which will also cost him a lot of money.
John also has a credit at the bank as stated above and he did pay all his monthly fees to cover it.
Not to mention his family and kids, where he needs to put the food on the table as well.
He is a smart guy, so he does not overspend, but the fact is, that most of that 200.000 € deposit payments he received is already invested further – all with one main goal, to have super happy customers on board of his vessel.
And then Corona happens!
Clients are worried, so now the client requests these 200.000 € worth of deposit payments back.
The cruel facts are, that:
- John does not have this money anymore (at least not the full amount)
- He can not refund 5 groups, go bankrupt and leave the other groups ”without anything”
So the only thing he can do in this scenario is:
- Go bankrupt
- Leave the matter to the courts
And lets not only put gulet owners into this situation. Travel agencies (yacht brokers) are in a similar situation as well.
Our agency for example has around 300 luxury charters booked for season 2020 and we are standing well. We have funds to survive this situation if it lasts for several months, probably even up to a year.
However if we need to refund 300 groups for the entire summer, it would mean a problem for us as well. Big problem.
We did invest the money we earned from bookings as well to marketing, salaries, gulet inspections, customet support, etc, etc, … So to expect we can just refund 300 groups – is optimistic.
And this is considering ALL THE YACHT OWNERS would be willing to refund us, with all the deposit payments they received from us, which is ”by the fact stated above” not possible.
So agencies are more or less in the same situation as yacht owners.
SCENARIO NO.2 WE MOVE THE DATES FROM CLIENTS TO 2021 OR TO SOME OTHER DATE IN 2020
Gulet owners will have a terrible season.
Agencies will have a terrible season.
The client will have a whole mess with rescheduling the group, flight tickers ETC.
There will be a lot of bad temper and disapprovement.
But guess what:
- (Most) of the gulet owners will survive the season and will be able to continue their business
- (Most) of the agencies will survive the season as well, and be able to provide you with their support further on
- (Most) of the clients will not lose their deposit payments and will go on a cruise after all, probably with some extra goodies for when they arrive to their yachts (when this happens)
Why did I say (most) with each sentence?
Because some of the gulet owners were having money issues even before the Corona situation happened and will not be able to survive the season.
Same goes for several agencies in the business (just hope they transferred your deposit payments further on to the owner and the owner is okay – in this way you can still get your charter through).
When it comes to our agency, we are doing good business and working with legit gulet owners, where I do not expect any owner would not be able to deliver after reschedule to 2021 season.
Even if this would happen for a couple of groups (I doubt this would happen), our agency will be able to cover there groups these groups and put them on the same or better yachts next year, so there is extra safety from our end as well. For our groups, 99.9% groups should be fine and their deposit payments safe.
On the other hand, we could also put you in direct contact with yacht owners, who will confirm to you that your deposit payments are safe in their hands, so if your agency would not survive this (not possible), you could still make direct agreements with them for the second payment and still have your charter.
But to get back to SCENARIO NO.2 – RE SCHEDULING YOUR DATES
Nobody will be happy about this. But you will have your holidays in the end. And they will be spectacular.
If all the people ask for a refund, there is a very legit chance you lose your holidays and deposit payment.
What about a middle scenario? Refund just a couple of groups?
In all these scenarious, we like to be one thing – HUMAN.
To be honest, the entire yachting industry at this moment shares the same view – no refunds – no exceptions.
We understand some clients have a really hard time dealing with this decision and the reasons can be very legit.
- Some groups are from all over the world and are doing this only one time every 10 years
- Some groups already have holidays booked for 2021 and not re-schedule as it will kill that plan then
- Some groups wanted to do this as one of the last gatherings with their bellowed grandparents for example, that are in good health but more than 90 years old and have no idea what will be the status like next year
- Some groups can not cancel their flight tickets
- Some groups connected their travel date with a special celebration, like a weeding or something similar
We understand it all and it makes us crazy (an an agency and as a human being), to have to deal with this.
But an alternative is even more grim.
We also like to do everything we can to be as flexible as possible:
- Moving the dates for 2 years
- Moving the date to this year earlier or later in the season and moving again if needs be
- If some owner has more vessels, upgrading or downgrading the vessel to a smaller or a bigger one
- Trying to be as flexible as possible – even if it is ultra hard to think of some crazy solutions that would work for everyone
Sometimes we have on the plate 2 things that smell bad.
And then you just take the one that smells a little less bad.
I still think that moving the date is a much, much better alternative, then losing the full deposit payment.
And this brings us to the answer of the main question.
OK, I understand all this! But still – just refund me, and get everyone else to re-schedule
I have to say we are all in this together and even if in reality a couple of groups could get a refund and nobody would notice and have any problems with this, it is really unfair to all the other groups that needed to take sacrifice in order to make this work.
So the general decision is final.
We will wait closer to your departure date.
If everything will be okey – your yacht will be waiting there for you (and I can imagine it will be a holiday you will need after this quarantine).
If there will still be an issue, then at that point we will do everything we can, to reschedule your dates for later this year or for the 2021 season.
WHAT ABOUT THE CLIENTS, THAT WILL INSIST AND WILL NOT WISH TO RE-SCHEDULE
In these case the client has a couple of options:
- Go to court and ask for a refund there: nobody knows when the courts will start operating, and with the yachting industry all being one in this terms, also not sure if a client could win in court when it comes to the Corona case. Lots of brokers in the market are saying, courts will support agencies in this matter – but this is a guess only. However even if the client would win after a couple of years, there is no guarantee that the agency being used will survive this, so it is a lottery to go this way.
- Go to social media and other online sources and write bad things about the agency or yacht owner there: this is always a very legit option a client can take, but when agencies and yacht owners will need to choose between going bankrupt and having to defend themselves online (with the help with of the entire yachting industry behind them) – I think in most cases the decision will not be so hard to take.
- Wait out the situation: meaning the client just cancels the booking and if the owner did manage to reschedule other groups and will be okay when it comes to his future season – expect a full refund if all is well at that point. Nobody is keeping the money because he is evil or he wishes to use the situation to blackmail clients. So if the option to refund the client will be there (toward the end of the season), I am sure even the clients that just canceled the trip might get a refund. But this is playing a lottery.
The good news, what is going on right now is not World War, it is a virus. And all viruses have one common thing. They all end/vanish at some point. This is not a LONG TERM CRISIS. We think in a couple of weeks/months, things will calm down and life will get back to normal. And one thing everyone will need is A HOLIDAY!
I know I am the first in line waiting for this to stop and if there is one point I do like about this situation, is that it will be easier for me to find a free date on one of the yachts and take my family there to unwind a bit – and do some good old brainstorming with yacht owners, how to still use this situation in a way to improve our services and satisfaction of our clients ”long term”. It was taken to protect the client and safe the yachting industry.
Thank you for understanding & patience.
And most of all – STAY HEALTHY!
Without our health nothing really matters anymore.