Profit or passion? What it really costs to run a charter yacht

Can you make money owning a charter boat? Is it profitable to own a yacht? Much has been written about what makes a great yacht for charter, but does the perfect boat translate into profit? And is it even possible for income to offset running costs?  BOAT reveals the truth about charter yacht profits – and the one yacht that breaks even.

A popular-size yacht like this in one of the world’s top charter destinations can break even or make money if the owner prioritises charter over their own personal use. In superyachting, this is the rare exception, not the rule. Most owners buy yachts for their own enjoyment, with charter of secondary importance, and when they do choose to charter a boat their motivation is not purely financial.

“It is an opportunity to help offset operating costs and a way to keep the vessel moving, not to mention a way to keep the crew motivated,” says Kellie Shoemaker, head of charter management in Fraser’s US office.

In fact, in the past it was thought that making a profit was impossible. Cecil Wright partner Liz Cox, who has been in the business for more than 30 years, remembers the first time she heard of such a thing. It was the early 2000s, and the owner of Leander G, after enjoying his yacht, put it on the charter market with the intention of making money. “I believe it was one of the first charter yachts that did turn a profit,” Cox says.

For Hill Robinson’s head of charter management Nicolas Fry, it was the rebuilt explorer Legend that convinced him. “I was at Camper & Nicholsons at the time. It was the first time I was dealing with an owner who was not really using his boat for himself or for his family, and he was making money with it. I realised that, yes, you can make some money, but you really need to think of the yacht as a business, not as a boat that you want to use, plus do some charter.”

Cox has seen sailing yachts become hugely popular in recent years in the Caribbean, with charterers drawn by the winter trade winds that guarantee a good sail, “whereas the motor yachts have really been more about the Christmas and New Year period”, she says.

They charter for less than a motor yacht though, and while running costs can be slightly lower than a motor yacht’s, the refit period can even things out due to the rigging and sail maintenance. Historically, sailing yacht crew were paid less than motor yacht crew due to different expectations of formality on board, but for charter yachts at least, this is changing. “The salaries aren’t massively different anymore, because you have to attract the high calibre of crew needed for a successful charter reputation,” Cox says.

The yacht’s age of 27 years affects its charter rate but not its desirability – reputation is the bigger factor there. “Generally there is a difference in charter price between a brand-new boat and an older boat, but it doesn’t mean that the experience will be better on the brand-new boat,” Fry says. “Experienced charterers might prefer to be on a boat where the crew has been there for a long time.”

Cox agrees, using the 13-year-old Abeking & Rasmussen Arience as an example. “We could fill her calendar two, three times over in the season, because of her reputation and because the owner has a good budget to maintain the interior. The moment a boat looks tired, then she will start to lose her reputation. If you have an owner who loves and invests in their boat, and employs crew who also care and love the boat, then age is not a consideration, so long as the owner is keeping up with the toys and activities.”

Imagine the charter market like a triangle, Cox says, with those who can afford a 30-metre at the bottom and those who can pay €1.5 million a week at the top.

“While the client base for boats over 80 metres is undoubtedly smaller than the 50- to 60-metre segment, the options in the 80-metre-plus range are also a fraction of what is available,” points out Chris Callahan, charter and sales broker at Moran Yacht & Ship.

“From a charter management standpoint, on the larger end of the market, we would consider eight to 10 weeks of charter successful, as it would allow for a good balance of owner’s use versus charter,” says Callahan. “In the 60-metre market, eight to 12 weeks is normal.” He adds that “normal” is contingent “on the boat, its location and the owner’s motivation”.

Cox’s company, Cecil Wright, manages one of the world’s largest charter yachts, Kismet. Just delivered in April 2024, the yacht chartered for a total of 45 days last year. “Bearing in mind that she wasn’t available straight away (for the 2024 summer season), we would be looking for about six weeks over the whole of the summer period to allow for owner usage, and then two to three weeks in the Caribbean, again, depending on the owner’s calendar,” Cox says.

At this size range, multi-week charters are common, she says. “A lot of people will do a two-week charter or more when they’re taking something the size of Kismet.”

This hypothetical yacht was dreamt up by Fry and his team, after surveying captains, brokers and clients. Hill Robinson launched the concept at the 2024 Monaco Yacht Show as “The Perfect Charter Yacht”.

“The idea was to create a brief for designing and building the most profitable charter yacht,” Fry says.

The survey revealed that the ideal size is between 50 and 60 metres. “We decided that 60 metres is more suitable. You want to have 12 guests on board, and you also need a good amount of crew. Generally, for the 60-metre boat, we are thinking 14 crew, which gives more than a one-to-one crew-to-guest ratio,” Fry says.

Drawn by Dölker + Voges, the concept includes a spa, a pool hovering above a big beach platform, fold-down terraces and flexible accommodation that could be reconfigured to suit different parties.

Charter income was calculated based on five weeks high season and three weeks low season in summer, plus two weeks high season and two weeks low season in winter. Maintenance costs will be low initially during the shipyard’s warranty period, and the rates reflect the premium that new yachts can charge.

New yachts like this tend to attract charterers who are moving up in size, Cox adds. “Those clients are looking for the latest modern amenities, big beach clubs, all the watersports activities, inflatable water parks, massage rooms, etc.”

Maximising income potential

Charter rates, in general, are determined by the market, comparing a yacht to others of the same size, brand, year of build, number of cabins, number of crew etc. Getting the price right is key to getting inquiries, Fry says. Too high and you won’t get as many, too low and clients may wonder what’s wrong with the yacht.

The captain and the crew don’t influence the rate, yet they can make or break the programme. “An experienced crew creates the foundation for a programme’s success. The brand of a boat and the amenities offered are certainly important, however an all-star crew can make up for areas where a particular boat might fall short,” Callahan says.

“Crew is really the number-one key selling point,” Fry agrees. “To have a well-known captain is very important. Captains generally are leading the way; when you have a good captain on board, you’ll find the rest of the crew will be good as well. A good chef with great references – someone who has been working in a Michelin-style restaurant or won an award at a chef competition – is also a plus.”

Despite how crucial crew are to a yacht’s success, the industry’s high turnover means a yacht’s rate won’t be tied to them. “If we base a charter rate on the name of the captain, in six months, we may have to [change the rate] because the captain is gone,” Fry explains.

The yacht’s pedigree is also important. “The most successful yachts I’ve represented on the charter market were more or less all good Northern European brands. I think the reason for that is these yachts don’t become old fashioned, even after 30 or 40 years. The design is timeless and still appealing to many clients,” Fry says.

Classic yachts are a shining example of this. “Istros (a restored 1954 Feadship) came on the charter market, I think, in February with us, and by the end of April, her season was full,” Cox says. “There is a specific type of client that just loves classic yachts, people who like a slower pace of life, maybe a bit more family oriented.”

An older yacht may require more care and maintenance, adding to its overall running cost, but spending this money will benefit the owner in the long run, says Callahan. “One way an owner can manage operational costs without compromising the charter experience is to put a good planned maintenance programme in place. That might sound conflicting, however spending time and money in the yard for maintenance and regular service will reduce the likelihood of costly breakdowns of equipment, especially during a charter where there could be commercial implications as well as reputational damage for the charter programme.”

In terms of increasing costs, Callahan says, “insurance is leading the way in a year-over-year increase in certain vessel size ranges.” Crew salaries haven’t taken any big leaps in the last couple of years but the overall cost of employing crew has risen due to rotational positions becoming more common. “But ultimately, I think this improves both the owner and charter guests’ experience on board,” Callahan says.

Finally, just like in real estate, success comes down to location, location, location. In yachting this means the boat’s physical location needs to be close to charter hotspots to eliminate delivery fees, Callahan says.

Then, once the first charter is booked, the calendar should be filled with an eye towards minimising downtime. “It makes sense that if you’re finishing in Saint-Tropez, for example, that you start your next charter in Saint-Tropez,” says Cox. “Whereas if you start your next charter in Sardinia, then you’re losing two to three days just on relocation. We try to minimise the zigzagging as much as possible.”

The good news is this careful scheduling is much easier today than it was in the days when charter superyachts never made money. Back then, Cox says, she had to courier four versions of the contract to the client, central agent, broker and owning company for physical signatures, then everyone had to receive the fully executed copies before the money would be wire transferred – at the pace of banks of yesteryear. “It could take almost three weeks after an agreement to get a signed contract, whereas now it can literally be done in three hours,” Cox says.

A profitable charter superyacht is still a unicorn, but it’s more attainable than ever before. It starts with a commercial mindset. “When you think about charter as a business, you think differently,” says Fry. “You give priority to the bookings in high season. You choose your crew differently, and you offer the yacht in a different way, in a more commercially minded way.”

Add in a stellar captain and chef, a competitive tender and toy package and a meticulous maintenance and refit programme that keeps the yacht looking fresh, and watch the repeat bookings roll in.

First published in the April 2025 issue of BOAT International. Get this magazine sent straight to your door, or subscribe and never miss an issue. For more expert superyacht tips and essential yachting advice, explore our latest yacht advice guides.