Coronavirus and yachts – in summary.

The pandemic has had a profound effect on the charter market, causing it to grind to a halt. The challenge is the uncertainty. As we simply do not know when people can travel again, or what areas will be open for travel. What the yacht charter market needs is for the Mediterranean to be open by August latest – July would be wonderful. In this case, there will be a rush of people booking yachts last minute. However, if the Mediterranean remains closed it will be catastrophic for the industry. In this case, we can ‘hope’ for clients to consider other charter destinations outside of the Med season such as Asia, Caribbean, Bahamas etc. But the majority of annual super yacht charters do take place on the Med, from June – September.

Currently we are seeing some ‘unusual’ and unique charters take place. Where clients want to be on a yacht to isolate in luxury. There are super yachts ready to do it. Where crew have been tested and quarantined and they are ready to go to sea. The few customers entertaining this are certainly in the elite market, where we can make anything happen.

Before examining the primary topic of Coronavirus and Yachts, as an initial statement, it is important to note that the people suffering or experiencing the worst complications are mostly the elderly, and/or are people with underlying health conditions. Such as heart or lung problems. Over 90% of those infected recover easily and quickly. But for those who are susceptible, we must all take extra precautions. It is our duty to stay informed through reliable and reputable governmental sites. As opposed to sensational ‘bright light’ and ‘attention grabbing’ internet headlines.

Those who are ‘young’, fit and healthy have a very real responsibility to not unknowingly spread the virus, inadvertently affecting our neighbours, the sick, and all elderly family members. If we all follow the precautions and safety guidelines, we will mitigate the spread of the virus, and hopefully eradicate it altogether.

“Now that the virus has a foothold in so many countries, the threat of a pandemic has become very real.”— Tedros Adhanom Ghebreyesus, the World Health Organization’s director-general

Coronavirus and Yachts

 

My Experience of the Recent Impact of Covid-19 on the Yachting Industry

My world, in the yachting industry has been a roller-coaster these last few weeks due to Covid-19. It has directly affected client’s desires to travel and hire yachts, and understandably. The media have fabricated an over exaggerated level of fear. Causing stock markets to crumble, government bodies frantically scrambling to instigate safeguards (thank goodness) and pharmacies selling hand sanitiser faster than they can stock. This begs the question who wants to get forced into a quarantined one star hotel in the midst of their luxury yachting holiday? At this point we don’t know if this is simply another flu, if it is a short-term phase, or a long-term problem. People are trying to gauge the severity of this recent outbreak and forecast the future affects. They are naturally waiting to make summer plans until more concrete information is available. Now considering I own a business intrinsically linked to luxury travel, this has a direct and hard-hitting knock-on effect on my business, my long loyal clients, the yacht owners I represent, my employees and the yachting industry as a whole.

We have clients, who at this point in March, I am usually enjoying conversations about summer plans, Michelin restaurants, and the finer details involved in a truly unique and memorable charter experience. Usually in March clients wish they had booked sooner (when there were more choices of yachts). Today, nobody wants to commit. The team and I are constantly strategizing, negotiating, and taking every opportunity to impress clients. Every year since its inception in 2012, 212 Yachts has experienced positive year on year company growth. I have a spring in my step, looking forward to an exciting season and being part of organising the trip of a life time for clients! March and April are traditionally our best financial months, as the dwindling Winter bank accounts start to look healthy and replenished again as clients start booking their yachts. The last few weeks however, I have experienced a stark contrast to previous years. And I have been involved in conversations of a very different nature. My job right now for clients (and the job of the team), is to do my best to ensure contracts already signed pre covid-19 will not be compromised. (Easier said than done). And to be an honest, precautionary sounding board for others. We have to take this on a day at a time, and assess daily, as every factor outside of our control, continues to change.

 

Do Yacht Charter Contracts Cover the Coronavirus?

Regarding coronavirus and yachts, the current MYBA Yacht Charter Contract does not ‘protect’ the client in a case of a travel ban or a epidemic. However, clauses can potentially be included in new charter contracts. Each special additional clause would be on a case by case booking.

We have been keeping a very close eye on the coronavirus news here at 212 Yachts. We have also been liaising with other professional bodies within the yachting industry, to work on solutions for clients and yacht owners. Whilst three page addendum’s are at this moment circulating, it is my personal advise to remember a yacht charter company is not a solicitor/legal. Please ensure you are clear fully on all conditions, just in case. One of these solutions might be that we are able to add a special clause to all charter contracts. This could allow the charter to be cancelled penalty free should the coronavirus still be problematic by the date of the charter and deemed unsafe. The principal aim is to ensure that clients can safely and confidently make charter plans without the worry that they will lose out from this rather surreal situation that is out of everybody’s control! 

At 212 Yachts, our highest priority is ensuring an impeccable service and incredible experience on board luxury yachts. Added to this, we have a very real responsibility to ensure our client’s interests and well-being are best looked after. This part of the service is often not seen by clients. (And we do not want them to see it, this is after-all a luxury service). It’s the countless hours of work and due diligence that we do in the background that contribute most to our client’s satisfaction and luxury service. We work exceptionally hard to fully understand client’s wishes and requirements. So that we know in full confidence that the yacht we recommend will be covered.

Every luxury yacht available for charter is owned by a separate individual (a company structure). This means that we can’t always foresee what we are up against in case something goes wrong. Thankfully there are trusted charter contracts in place for exactly this reason. Developed over a number of years by top lawyers and MYBA (Worldwide Yachts Brokers Association). These charter contracts are the foundation of luxury yacht charter bookings, especially on commercial yachts. They clearly and fairly lay out the terms and conditions that both a charterer (the client) and an owner (the person/company who owns the yacht being contracted) are subject to and expected to adhere to. For example, when a yacht breaks down the day before a charter (yes the horror, and trust me, when this happens we jump into fight mode working around the clock to find a replacement solution to save our clients holiday) we can confidently refer to the contract for guidance on the resolution.

There have also been cases where a yacht that we have poured time and energy into, organising the finest of details and keenly liaising with clients and owners alike gets sold, a disaster for the charterer. Once again we turn to the MYBA contract guidelines to effectively manage the next steps. (While frantically finding the best possible solution and replacement yacht for our client so they can move forward quickly and with peace of mind). Our clients are always our principal aim. Making sure they are represented with the highest level of professionalism, we deal in solutions not problems. I could go on for hours about a host of fascinating and bizarre situations that I have witnessed throughout my career. The challenges and the success stories (and if you would like to discuss, get in touch) but getting back to the topic at hand, Coronavirus is a pandemic, one with which the charter contract cannot, at the current moment, provide a fix for.

“It’s temporary, but it’s a tornado-like headwind, so it’s going to be powerful for a period of time.” — Rick Rieder, the chief investment officer for global fixed income at BlackRock

Is a Yacht a Safe Place to be While There is Coronavirus?

Yacht chartering provides the perfect opportunity for a secluded getaway. With many people wishing to avoid public spaces, soaking in the sun and admiring stunning coastlines may well be the perfect way to not only enjoy the tranquillity and luxury service, but to avoid the general public, and in turn avoid covid-19. Super yacht clients can fly in on a helicopter directly to the super yacht or via a private jet, avoiding the crowds. Crew on board will also be subject to rigorous health measures and tests before your arrival. On board the yacht, with only your selected family and friends, it is possible to have a luxury, first class service provided, in an extremely hygienic environment.

 

What Precautions are Yacht Crew taking to Ensure They do not get Coronavirus?

It is not just the crew taking personal precautions. Their yacht management companies, charter reps, and yacht owners will be ensuring crew are doing everything possible to avoid cases of infection. All commercial yachts (the majority of luxury crewed travel yachts are registered as commercial and when chartered will be 99% of the timed done so with a MYBA charter contract) have strict procedures and protocols to follow.

Some of the precautions the Yachting industry are currently employing include:
  •  Ports and Marinas are making all yachts provide full crew information regarding the crew on board, their recent travel, their health and to declare all movements, before entering port.
    • Other ports (as of today Malta, and Italy), and we expect to see more – are insisting on yachts and their crew being put into self quarantine for 14 days on arrival. Now this is a good thing, but it will open up a whole new can of worms if a yacht cannot get to where it is booked to go.
    • Many yachts are planning on having crew checked for fevers / symptoms etc. at least weekly, or before each charter by an independent doctor (this is a request which can be made and potentially added to a charter contract on a case by case basis). These yachts will extend these checks to anyone who is coming on board.
    • All large commercial yachts will have records of all people coming on board, so that any potential concerns can be traced
    • Crew will be monitored if they are returning from travels and may have encountered the virus. We have already heard cases from super yachts where yacht owners are insisting some crew members returning from holidays, even with no symptoms, are put into a quarantine for 14 days before boarding the yacht.

Luxury crewed charter yachts, private or commercial crewed yachts are very possibly already the cleanest places you can find. Part of the luxury service is that yacht interiors are cleaned thoroughly daily. Now with fears of the virus, extra stringent top-to-bottom cleaning takes place on a regular basis to reduce the risk of infection.

We expect in the next few weeks, as the yachting industry comes together to find the best solutions and strict management processes are rolled out (already happening on many yachts). That the measures imposed on yacht crew to ensure excellent hygiene will increase. 

 

I want to book a yacht for a corporate event but am concerned the event will be cancelled due to Coronavirus?

This is a very real concern. After all, corporate clients renting yachts for events, are doing so to have a presence at the event, to host meetings on board, entertain clients etc. Therefore, in order to justify hiring a yacht you need the event to take place. We have seen MIPIM (a large property event in Cannes) postponed, and other global events cancelled. Corporations are taking a substantial financial hit. By not being refunded the charter fee, losing money on flights, travel arrangements, etc. It is therefore no surprise that corporate event bookings are tedious and being treated very cautiously. Understandably so as corporations struggle with the risk of losing money. We do however try to safeguard against clients suffering financial loss as best we can and always negotiate termination cases as best we can on their behalf.

We have recently negotiated several contracts for our clients chartering during the Cannes LIONS, the Cannes Film Festival and the Monaco Grand Prix. These included a clause to mitigate financial loss in the event of the corporate event being cancelled due to the Coronavirus. The clause specifically addresses the situation and our client’s concerns, in an effort to protect them in the unfortunate case that the corporate event is cancelled. Please inquire with us for further information.

 

Is there a clause in the yacht charter contract that protects me in case of cancellation of the yacht due to Corona Virus?

The current MYBA (Med Yacht Brokers Association) charter contract. Which is recognised globally as the most reliable and trustworthy yacht charter contract, does not cater for a case like cancellation due to a pandemic, nor specifically the Corona Virus. It has never had to. However since the coronavirus has had a direct knock on affect to clients wishing to book a yacht, yachting companies are coming together and scrambling with lawyers to find a suitable and ‘fair’ clause to add to the contract. With the aim to protect both the yacht charter clients and also the yacht owner and his crew. It will be based on a case by case basis as each yacht owner is different.

 

What if I book my luxury yacht and travel restrictions mean I cannot get to the yacht?

Before coronavirus, it would have been an unfortunate case of ‘tough luck’. However, at time of writing Trump has banned flights to and from the EU for at least the next 30 days. The risk of not being able to travel is now a very real concern. Special clauses added to the yacht charter contract regarding coronavirus and yachts can be used to solve, or mitigate risks. As always with luxury yachts, each yacht has a different and unique owner. This yacht owner has to accept the suggested clause. Therefore it is paramount that the yacht charter broker / agent you are working with, truly has your best interests at heart.

An example of a clause which both a client and a yacht owner have agreed, today, which we are organising for Croatia, includes:

In the event that the charterer or vessel is prevented from travelling to the port of embarkation due to Croatian  government, and/or World Health Organisation travel restrictions in regards to the COVID-19 virus, the charter will either be moved to a mutually agreeable port or postponed to mutually agreeable dates and ports within 6 months of the contracted charter with full funds transferred to the owning company as per the original agreement.  The owner and charterer will have 14 days following postponement to agree new dates and ports which may then be altered by mutual consent / addendum if required. 

In case the above is not possible and the charterer prefers to cancel the charter completely but only due to Croatian government,  and/or World Health organisation travel restrictions, the Charterer shall be entitled to cancel this Agreement  no later than 3 weeks before the charter begins and to immediate repayment without interest of all payments made by him under the terms of this Agreement. No penalty will be required and paid, nor by the Charterer neither by the Owner; the Broker and the Stakeholder shall not be entitled to commissions”.

  • 212 Yachts is not a legal adviser and encourages, especially in these uncertain times, for our charter clients to be confident and informed of the contracts they agree for their yacht vacation.

 

Is there an insurance for yacht charter cancellation and Coronavirus?

For luxury, commercial, crewed yacht charters (ie for Private rental) at time of writing there is not currently a known insurance which specifically covers charter cancellation due specifically to covid-19. I have seen a number of companies advertise insurance for coronavirus and yachts in the last few weeks (trying to take advantage of worrying times). But to my disappointment, on investigation, these current covers would be worthless, and / or, already being pulled from the market.

 

Other questions?

Please pop us an email at info@212-yachts.com or call the 212 Yachts team for any questions regarding coronavirus and yachts.

 

Jenny Caird

Written by Jenny Caird

Irish born Jenny Caird is the founder and CEO of 212 Yachts (and charter expert), applying her passion for customer service, with incredible client satisfaction, to create an ambitious, highly reputable, and respected business. Whatever your query is, Jenny offers solutions with a smile. With her motivation and dedication to ensuring the yacht owners and clients 212 Yachts work with are 'wowed', Jenny and her team add the extra degree in yachting.


Get in touch, we will contact you as fast as possible