Beginner’s Guide to Starting a Yacht Charter Business in the United Kingdom
While often seen as a lucrative investment, a yacht is often more than just a one-time expense. Similar to cars, it requires fuel, maintenance, certifications, and licenses, as well as several add-on expenses. To offset the expensive cost of a boat when unused, you can consider starting a yacht charter business
There is no doubt that owning a yacht costs a fortune. After all, it was touted as one of the “Sports of Kings” for about two centuries. Historically, a yacht was a small swift sea vessel designed for capturing pirates and smugglers in the 14th century. Once popular only among merchants, yachting gradually earned its place as a status symbol among the elite.
Many people think that buying a yacht is a splurge. However, most buyers are purchasing a boat to pursue their passion. People buy a yacht for sailing, boat racing, fishing, traveling, cruising, having a vacation, etc.
Raising the Sails of Success
Basically, a yacht charter business involves hiring out a motorboat or a sailboat for a defined rate and purpose. While smaller or personal boats can be rented for hours or a day, most yachts are chartered longer. Chartered vessels also have amenities and may come with a pre-provisioned skipper and crew.
In general, there are 3 ways to charter your yacht –bareboat, crewed, or cabin. As the name implies, bareboat charter is merely renting out your boat to a charterer with a skipper license. Crewed charters are provisioned with a captain and a staff experienced in sailing and navigation. Finally, a cabin charter offers to hire out only one cabin instead of the entire yacht.
As an owner of a yacht charter business, you can even join the crew or offer skippered charters. In case this is overwhelming, a corporate service provider like 3E Accounting can help.
Making Opportunities Work for You
Currently, the global yachting industry is expected to reach $84.7 billion by 2027. In the United Kingdom alone, boat sales grew by 9% in 2020. Superyacht booking has doubled and has a turnover of almost £700 million. So the perfect time to start a yacht charter business is now.
Essentials on Starting a Yacht Charter Business
Ready to commercialise your passion for yachting? Here are the steps in starting a Yacht Charter Business in the United Kingdom.
Have a Boat
Most people who enter a charter business will have their own vehicle or vessel. However, starting a yacht charter business does not necessarily mean that you need to own a yacht. In fact, most charter companies are managing other people’s yachts –especially luxury ones. In exchange for a commission, the yacht will be cleaned, maintained, and marketed.
Generally, a sailboat has different maintenance needs than a motorboat. Once you know the type of yacht that you will charter, you must inspect it for initial repairs and restorations.
Have the Skills and Qualifications
Beginners in sailing or boating must first take sailing lessons to understand the business. You can join a course or ask a friend to teach you. But if you are feeling adventurous, you may try to be a deckhand on other charter boats. This will familiarize you with the fundamentals of navigation, mooring, and boat safety.
In the United Kingdom, the type of license or certification you need as a skipper depends on the type of vessel. If the yacht is smaller than 24m, a commercially endorsed RYA Practical Certificate will be enough. Superyacht would require more stringent certification like RYA Yachtmaster™ Coastal Certificate of Competence.
Study the Market and Define your Niche
Who is your customer? If you are planning to buy a boat for your charter business, this step should be at the very start. If you already have a boat, your target market will be based on its quality and capacity.
Why should the customers specifically choose you? Given the statistics, there are many yacht charter businesses in the United Kingdom. Therefore, you need to offer something unique or find a gap or a need that you can fill.
Make a Business Plan
When starting a yacht charter business plan, choose a name appropriate to your business operations and attractive to customers. Based on your market research, decide on the location of your business and perform a SWOT analysis. Then create a profit and loss analysis. As you decide the type of services to offer, consider maintenance, insurance, and hiring costs.
Charters can also be:
- Themed getaways such as proms or executive launch parties, etc.
- Day sails, fishing, or diving trips.
- Sailing school, etc.
A website can also give your business a competitive advantage. Inviting social media influencers and vloggers can help you reach prospective customers.
Incorporate your Business
Consider the start-up capital that you will need when you write your business plan. Due to the high price tag of yachts (and especially superyachts), there is usually a group of owners. Processing your United Kingdom company incorporation will protect the limited liability of shareholders. In the yacht charter business, it is necessary to register your boat as a charter vessel.
Of course, if you have the resources, you can always operate as a sole trader or partnership. Whichever business entity you choose, you will need to register with HMRC for taxes. Reliable company formation firms such as 3E Accounting can advise you on VAT and Capital Gains Tax savings, etc. For your reference, 3e accounting also provides a complete guide to company registration in United Kingdom.
How to Register Your Yacht Business
You will need to name and register your boat with the United Kingdom Ship Register. The United Kingdom Government website has comprehensive information and guidance on ship registration. The following is an outline of the steps to guide you.
- Fill out the Application to Register Bareboat
- Boat dimensions
- Previous registrations, if previously registered
- Bill of sale
- Radio Signal detail (MMSI and IMO)
- Builders’ certificate
- Survey Certificate
- International Tonnage Certificate
- and other Safety Certificates
- Submit a Declaration of Eligibility
- United Kingdom Resident or has a United Kingdom-incorporated business
- Declaration of Non-profit Fishing
- Apply to change a ship’s name or port of choice
- Submit all Documents
- Receive a Carving and Marking Note
- Receive a Certificate of Registry
Licences and Registrations
Your certifications need to comply with the United Kingdom Maritime and Coastguard Agency (MCA). The MCA ensures safety in the United Kingdom’s maritime waters. They are the ones who implement standards in providing training and certifications to boat owners and charter businesses. United Kingdom’s maritime safety policy as an extension of the Department of Transport.
United Kingdom Waters Requirements
- Certificate of Competency
- Health and safety certificates
- Seafarer certification
- Medical fitness certification
- Boat masters’ license.
- Radio licence
- Insurance
Harbor Insurance Requirement
Although you need no license for offshore sailing, most insurance companies may require it, especially for large vessels. Insurances are non-compulsory in the United Kingdom, but most harbours will not allow you to moor without it. Insurance companies generally accept an International Certificate of Competence (ICC) as proof of a skipper’s competence. To receive a United Kingdom ICC, a skipper must be:
- More than 16 years old
- Should be mentally and physically fit to operate a yacht -with good vision and hearing
Note that United Kingdom ICC is issued by RYA (Royal Yachting Association) in compliance with Resolution No. 40 of UNECE. As an applicant, you or your skipper needs to prove that you have sufficient boating competence. If you are already skilled, you can skip the RYA lessons and take an ICC assessment directly.
Additional Licenses and Registrations
Depending on the type of activities that you will offer in your yacht charter business, you may need additional licenses. After getting your skipper license and the boat license, you may also need the following licenses:
DATA
- Information Commissioner’s Office (ICO) Notification since a yacht charter business needs to process personal information.
- Public space surveillance (CCTV) licence if your yacht is equipped with CCTV equipment.
FUNCTIONS
- Discharge of trade effluent (England and Wales) is needed if you will discharge wastewater into the environment.
- Protected wreck site licence (Wales) if offering diving and anchoring near protected wreck sites.
EVENTS
- Premises licence (England and Wales) when hosting activities on the yacht while on the harbour or an island.
- Temporary Events Notice (England and Wales) when hosting activities on the yacht while on unlicensed premises (offshore).
- Club premises certificate if you are a member of a club.
- Adventure activities licence (England, Wales, and Scotland) if you plan to offer activities in remote areas.
Conclusion
These are just some of the basics of how to set up a yacht charter business in the United Kingdom. For more in-depth guidance or assistance, get in touch with 3E Accounting. We offer company formation packages that are comprehensive and customisable. Our team of experts will take care of all the nitty-gritty details, allowing you to focus on running your business. Contact 3E Accounting today to experience an innovative and fully digitalised suite of business solutions and services.