Owners' guide to yacht management companies
by Kenny Wooten
The cost of employing a management company can vary widely, depending on many factors including the yachts size and the level of services rendered. Of a dozen or so companies contacted, few chose to venture any specific fees for services, arguing each case is unique.
We can offer a fixed-fee charged quarterly, monthly, or annually, or we can charge all disbursements and external charges at cost with our fees being charged on a time-spent basis, says ICap Marines Stephen Brew. There is such a large variation, it is impossible to judge precisely how much time we would spend managing a particular yacht, no matter what size she is.
For example, how many times during the 12 months will the captain and crew change? Will there be any repairs undertaken over the winter? How active will the yacht be in charter? Is there a technical/crew manager involved in the day-to-day management. There could also be unexpected work such as insurance claims or legal disputes.
For a 45m commercial yacht actively chartering in the Mediterranean and Caribbean, we would expect the annual fees to amount to approximately £20,000 to £35,000, says Brew. With fewer crew, fewer suppliers involved and less machinery, a sailing yacht of similar size might cost less, he adds, but there is no hard-and-fast rule.
Another industry executive estimated full-service management for a 50m motor yacht might cost $10,000 or more per month.
Management of charters
For owners moving up in class, the decision to register and operate commercially and offer the yacht for charter can add layers of regulations and expense, despite the rewards charter revenue may bring.
A management company may, in the long run, be of value saving time, hassle, mistakes and unnecessary expense, especially for the first-time yacht owner.
Chartering is governed by a more complex set of regulations to safeguard crew, passengers and the environment than strictly private use, says Clive Harrison of Isle of Man-based Döhle Yachts. These regulations can pose significant liability on the owners of the yacht, the captain and crew.
In the same way that owning the yacht via a corporate structure protects the beneficial owners in regards to liability protection and taxation issues, having a suitably qualified management company in place, with clearly defined roles and functions, supports the operation of the yacht and assists in ensuring that the yacht is ready for charter at the required times and locations.
'Beware of the well-presented one-stop shop approach, as very few companies can actually deliver this in a meaningful way.
Robert Tobin, director, Döhle Private Clients'
Robert Tobin, director of Döhle Private Clients Ltd., cautions that obtaining references before committing to a management company or to any individual management services is vital.
Do ask for several references from other owners, captains, suppliers, industry leaders, etc., at the outset of discussions and specific to the service you are interested in, Tobin says. Ask for a breakdown of the individual services versus costs. Ask why certain services are suggested over others and be prepared to use multiple suppliers when necessary.
Beware of the well-presented one-stop shop approach, as very few companies can actually deliver this in a meaningful way. Using companies that are overstepping their true ability or capability is asking for trouble. The tendency for some companies to advertise services that they just dont have any experience in is easily identified when checking references.
The efficient and timely administration of a large and complex yacht operation involving taxation, financing, technical, crew, safety, security, complex corporate structuring, accounting/budgeting and suppliers etc., he adds, can undoubtedly, when delivered by knowledgeable and well-resourced experts, save the owner and captain enormous amounts of time and expense.
Beware of the well-presented ‘one-stop shop’ approach, as very few companies can actually deliver this in a meaningful way.
Robert Tobin, director, Döhle Private Clients