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What's an average yacht program look like?

Discussion in 'General Yachting Discussion' started by Gulfer, Jan 27, 2020.

  1. SATPHONE

    SATPHONE New Member

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    Gulfer, I was provided this document last year on a WP112 currently in charter and for sale. I have no idea how accurate this is, so don't shoot the messenger.

    Attached Files:

  2. Ken Bracewell

    Ken Bracewell Senior Member

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    More realistically - halve the charter expectations and double the expenses.
  3. Gulfer

    Gulfer New Member

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    Ken, agreed.

    Not shooting, just quickly looking at it. The crew salaries seem low, Look at the food item, $15k for 40 weeks of food for 4 crew members. That works out to $13 a day.

    So, you underpay your employees give them a $13 daily food allowance and have them Charter 14 weeks a year. Sorry.. Belly Laughing. Not sure the crew would stick around.
  4. Capt Ralph

    Capt Ralph Senior Member

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    Yes, the insurance is way low, must of been quarterly.
    18 year old numbers are still low.
    That $400K broker must have put this together.
  5. FlyingGolfer

    FlyingGolfer Member

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  6. captaintilt

    captaintilt Senior Member

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    Great stories and advice on this thread. Sounds like quite the refit and glad to see that boats are at least getting used.
  7. Gulfer

    Gulfer New Member

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    Oh, one thing in that document above. The revenue I believe should be 20% less, as you have to pay commission to the brokers who handle the charters.

    So, Chartering came up twice in this thread. Once as a chartering vs. buying, now now Chartering to offset the costs..

    Not to open another can of worms, but....

    Does anyone out there have experience Chartering their boat?

    Currently, our boat is completely a private boat. No Chartering. However, during our REFIT we made a number of outfitting changes to bring it 'charter' standards. Arg!

    We like to charter maybe 2 to 4 times a year. No more.

    Why? Offsetting some expenses is obviously positive, but was not the driving factor. Sustainability was. As I looked into the future and figured there will be times we can't use the boat for several months, either due to work or family obligations, or simply because we want to go Europe. For me, not using the boat is the most stressful part of ownership, as you're not getting the joy and you're still getting the bills. If for whatever reason, a dry spell happens, I don't want my first reaction is; we're not using it. Let's sell it.

    Another side benefit of chartering a little extra money for the Crew via tips.

    The negative side as I see it and would love feedback. The scheduling of the boat has to be coordinated with a broker. If I tell them it's available in the month a May and they book a charter. Then my plans change. I'm sort of SOL. That worries me.

    The frustrating side was outfitting, we had to spend about $25k to 50k of various items to bring the boat up to "Charter Standards". I'm sure most will make our experience better, but some just felt ridiculous.

    The emotional side: OK Mr. Charter Guest; you're getting a good deal. If it's good enough for me, it should be good enough for you. I know, I know. The marketplace sees this a bit differently, as you're competing different boats.
  8. olderboater

    olderboater Senior Member

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    Well, let's analyze that. First, that is clearly a charter only boat as there are no expenses shown for owner cruising, no meals for owners or fuel or anything, so that's part one, can't use the boat yourself and hit those numbers.

    Second, must be flagged other than in US and with non US crew or simply the crew is willing to work cheap anticipating another $14,000 each in tips. Must be foreign though with no payroll taxes and no medical insurance showing. Apparently no satellite for phones, internet or television as I sure don't see where they could have buried the cost. Similarly no diving for bottom cleaning, no customs or clearing fees, no training or licensing for crew. No brokerage commission.

    Chartering 14 weeks in a 17 year old boat remarkable, not many achieve that. Much less at those top of the market prices for a boat that age.

    I've also never seen a 112' charter with only a crew of 4. 5 is the standard and typically the other is an engineer.

    So reduce the revenue, increase the expenses, and you have the numbers for a charter only boat. You might be break even before considering depreciation. Of course now to toss in the reason it's for sale. Demand on it down, costs about to rise, and far better to take $4.5 million or so than try to keep chartering. If it's charter future was bright and profitable, it wouldn't be for sale. Of course the selling price is pure fantasy as Westport 112's of that age generally are around $3 million, so $2.7 after brokers commission.

    A lot of numbers on that sheet of paper. Ask to see the tax return when one shows you numbers like that. Then they'll tell you they didn't report all the income or something and you know they're either lying to the tax authorities or you or both. When we buy small retail stores we don't even look at financials, show us your tax return and your sales tax returns only.
  9. escutcheon

    escutcheon New Member

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    New poster here, found this thread too much fun to pass up on.

    Hi Mapism, interesting viewpoint. When a boat sells no one asks for the amount of fuel burnt. Correct or not, sale values are driven by engine hours. Even in the mega and superyacht categories. In the DDC MTU manual service intervals are listed by hours. You are correct that with more or less load(fuel consumed) the intervals can be stretched or shortened. 100% load 100% corresponding operating time. 70% load 70% corresponding operating time. 10% load 20% corresponding operating time. The intervals are also a cover their ass by manufacturers. If engines seem to have an increased likelyhood to fail at 9,000 hours, they will call for an 8,000 rebuild to be safe.

    I find the only truly useful metrics for determining engine condition and lifespan to be oil samples, thorough preventative maintenance, and borescoping.

    High performance marine diesels in a 34m Westport run better and longer at high loads according to the techs I have discussed this with. Loaded at 85% and up, with both turbos open, breathing, engine temps up, and them running how they were engineered to be run; they stay cleaner and more reliable. You can easily cruise slower here and there as needed without issue.

    When a high performance marine diesel is run primarily at low rpm (below proper operating temperatures); cylinders will get deposits, scoring, leading to blowby past the rings, and the eventual cylinder glazing, then failure. When the engine is then asked to run hard the deficiencies are magnified, and chances of failure increase.

    Given the choice: I would bet my $ on engines run at a healthy load, and that have been PROPERLY maintained, borescoped frequently, and had oil samples taken constantly.

    Another big factor is fuel. Running high quality fuel through a fuel polisher will be really good for their lifespan. I view a fuel polisher as mandatory on power yachts.
    Last edited: Jan 30, 2020
  10. Pascal

    Pascal Senior Member

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    Maybe so with MTU but Cat service intervals are in hours or fuel burned whichever comes first

    When a boat is run at hull speed, engines will be running at operating temperature and won’t have any issues. Below that, near idle, yes they may be running cooler that they should

    every engine surveyor I ve talked too never had an issue with hull speed running especially if run up to speed after a long run. They also always look at average load and fuel burned to compare with hours and they all agree that hull speed running offset high hours as there is a lot less wear and tear

    about budget, I don’t think owner provisioning should be part of the operating budget as these expenses would incurred ashore / off the boat anyway.
  11. olderboater

    olderboater Senior Member

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    Clearly an individual preference. We include them for a couple of reasons. First, we spend far more on meals and entertainment when cruising. We seldom eat out at home but average eating out 3 to 4 times a week when cruising.

    Second, they're paid for out of "cruising funds", out of the boat money, in our case.

    Agree that they are not all incremental costs but with most people they are significantly more than normal. Now, some cook and eat the same meals and don't go for entertainment. Some even save on food when cruising vs. at home. I prefer to have the amounts out there and accounted for and then I can decide whether all or part is incremental.