Planning to charter a yacht in Croatia? Think twice before chartering with a company who offers heavy discounts, especially in peak-season.
We recently wrote about the rise in sojourn tax which will take effect in 2018 and the international backlash this has received. Now I want to turn your gaze in another direction – dramatically reduced prices.
Surely this is a positive thing, correct? Not always.
The summer of 2018 has been Croatia’s busiest yet, every aspect of tourism felt the effects of increased numbers, the nautical sector is no exception. The sailing and charter industry has absolutely boomed over recent years with an increase in fleets, charter companies and international flagged yachts visiting Croatian waters. Again, this is not always a positive thing – 2017 saw a rise in illegal yacht charter, marinas and even selling berths.
One thing I never thought I would comment on, would be reduced rates and discounts for charter yachts; however, the illegal yacht charter drew my attention to this. International yachts were discovered chartering in Croatia without the required papers and permits and, they were, of course, reducing their costs dramatically in an attempt to undercut the market.
Thankfully, authorities monitored this situation closely and even detained and expelled several yachts this season; though it is still not the end of this story.
My point is, in regards to chartering, I saw how harmful reduced prices could be to local yacht owners. During the summer, I also saw heavily discounted rates by some charter companies – a whopping 20 - 40% during peak-season as well as the usual September/October rates.
It reminds me of large commercial chain stories; who move into an area offering cheaper prices than everyone else, undercutting the market and driving the smaller, boutique stores out of business.
It is common practice for charter companies to offer on average 15 – 30% for charters during the off-season, which is the months of April/May even into early June, and September/October. Discounts in off-season make sense, there is less demand and the weather is less desirable, so it is a way of enticing people out.
However, alarm-bells start to go off when a charter company offers up to 40% in July and August which is peak-season in Croatia and typically when yacht charter prices increase due to demand.
I can see only a few reasons for doing this:
- Demand for charter yachts has decreased
- The company over-expanded (i.e. too many yachts in its fleet) and now needs to recover costs
- The company is essentially a large corporation trying to dominate the market
- Last-minute cancellations
After the summer of smashed-records, I doubt that #1 is the likely cause and #4 does happen, but it makes no excuses for month-long discounts. One company I saw offered a staggering 30% - 40% discount from the 29th July – 2nd September and 20 – 25% for the months of September and October. In comparison, the majority of others offer 15 – 30% during the months of September and October.
After speaking to a few local charter companies and agents, they all agreed that this was outrageous. When I asked them if they would follow suit, they said they had no intention of offering such discounts during peak-season, that they pride themselves on offering quality boats, crew and service, which such price-cuts do not allow. However, it does pose a threat to smaller local companies who run the risk of being passed over by people in search of a bargain.
When I put this forward to local companies and agents, I was told:
“While it has the potential to affect our business, we have no intention of lowering our standards and instead will rely on the strong reputation of quality we have built over the years.”
“Lowering the prices is a negative for the industry as a whole, it sets clients’ expectations of prices unreasonably and, if they charter a boat with lower standards because of these prices, they will have a bad experience and most likely not return.”
Another ‘interesting’ discount I saw was a company who offer, in capitals, “SKIPPER OR HOSTESS FREE OF CHARGE aboard Lagoon 52 for all future bookings for 2017.” Maybe it is because I was a hostess and my husband is a skipper but this just doesn’t sit right with me. It’s not just a discount, it is offering a person for free – which to me, undervalues the role of that person – ‘rent a boat, get a person to cook, clean and navigate for free’… Maybe what they meant to say was “Skipper or Hostess INCLUDED in the price”, so this is either a very poor choice of wording or a terrible discount – let’s hope it’s the former.
Here's the thing, just like a large store that has the power to offer highly discounted items, it can happen in the charter world, it is all part of market competition; however, my purpose in writing this was to draw your attention to it so perhaps you will think twice before booking a yacht with hefty discounts because I find it hard to believe that a level of quality in service and product can be retained if prices are so low. If the price is really your deciding factor, then there is not much I can say but if you are after a great sailing experience, do your research and don’t be too easily tempted by shiny lights (discounts), not all that glitters is gold.
Credit: Romulic & Stojcic
