When the topic for this month’s captains conversation was announced at lunch, the captains in the room let out a collective chuckle. It seemed that most all had had some experience with what we called “cheap owners.”
But as the conversation grew, it became clear that despite the occasional sea story, yacht captains have come to understand why and how owners are more frugal with their yacht budgets than perhaps they once were.
We began by trying to define cheap. The dictionary says simply “low in price or cost; not expensive” but also with the informal, perhaps more pertinent “stingy”.
But the captains didn’t define the word; they defined the owners.
“There are two definitions,” one captain began. “Those who are frugal or thrifty, inherently cheap, and those who can no longer afford their yacht.”
That includes an owner, this captain said, who bought his yacht at one point in time, thinking charter would help offset the running costs. But perhaps charter revenue has been cut in half, meaning the yacht costs much more than the owner thought.
These definitions triggered a whole tangential conversation about who is to blame for the fact that some owners can no longer afford their yachts — and it’s not the owner himself.
“It’s the broker who does the deal who tells him he can run the boat with three crew when it needs eight, or that he can get a captain for $3,000 a month when it really costs $10,000,” another captain said.
As always, individual comments are not attributed to any one person in particular so as to encourage frank and open discussion. The attending captains are identified in a photograph on page A17.
“There are people who are naturally cheap and guys who get into it [yachting] accidentally because brokers are good at their job,” another captain said. “If a guy comes up and says I can spend $10 million on a boat, I’d get them into a $9 million boat so they have some money left over to make the improvements they want. But a broker will show them $12 million boats and upsell them.”
That leaves these owners pinching pennies from the start, this captain said.
But it’s not all the brokers’ faults.
“Some owners don’t like to hear the truth about what it’s going to cost,” one captain said.
“People listen to what they want to hear,” said another.
And they want to hear they can afford the yacht, they all agreed.
The captains had cautious things to say about turning the yacht commercial, which is required if putting the yacht on the charter market. While brokers, especially those with management companies, will push putting the yacht commercial to “offset operating costs”, those running costs go way up under commercial endorsement, several captains said. And the management company has just secured itself a new client, not to mention charter boat.
“A lot of owners are misled and misguided,” one captain said. “They’re not necessarily cheap.”
Another captain pointed out that some owners just don’t know what it means to maintain a yacht. With no trips planned for several months, one captain said his owner told him to release the crew, that the captain could look after the boat solo since it was just sitting. If he needed occasional help, he could hire a dayworker.
“That’s completely out of touch,” this captain said. “The yacht suffers, but they don’t want to hear that.”
Again defending owners, another captain blamed the recent change in the economy, which has hurt those owners of yachts larger than they could afford.
“Now, they have to be frugal, but that doesn’t necessarily label them as cheap,” a captain said.
“Cheap is when I’m asked to get all the dockage rates between [points A and B] and pick the cheapest one,” a captain said.
“No,” said another. “Cheap is anchoring offshore.”
“We do that, too,” the first captain said. “We anchor 100 feet off the marina so we can get the free wi-fi and use the pool. That’s what I call cheap.”
The other captains agreed.
“The trouble is, the owner who tries to be frugal with money ends up paying more than if they just paid in the beginning,” one captain said. “If they do planned, scheduled maintenance, they don’t have problems. It’s the unscheduled, emergency problems that cost three times as much to fix.
“It’s sad that they don’t listen to captains with experience and their engineers.”
Several captains recounted stories of owners who delayed purchases or repair of equipment, searching for better deals, and required the vessels to proceed.
“You do that with an airplane [fly when the pilot says something needs to be repaired] and you get arrested,” one captain said.
“There comes a time when you have to start trusting someone,” another said.
These captains agreed that some of their peers take advantage of yacht owners and their money, which often makes the matter of trust harder for the next captain.
“Boats without budgets are totally abused by guys like us,” one captain said. “And that’s what gave management companies all the ammunition they needed to start offering management services.”
Aside from testing a captain’s patience, working for a cheap owner can impact a captain’s reputation.
“Poor maintenance can damage you quite badly,” one captain said.
“The owner’s a billionaire and he won’t pay his bills,” another captain said. “Companies come after me for it. I’m the captain on the contract. Doing things like that will not get you cheaper dockage later on, and it won’t get you laborers when you need them.”
“Yes, some owners are slow paying bills, but if you’re dead straight with people, it doesn’t reflect on you,” said a third. “It reflects on the boat.”
And, in turn, the owner. So perhaps the first step is making sure owners have all the information they need to make a wise purchase, including what it really costs to own and run a yacht.
“It costs 10-12 percent of the replacement cost to run a yacht every year,” one captain said. “That’s the cost today, not the build cost. If it cost $15 million to build 10 years ago, that doesn’t work for today.
“At the end of the day,” this captain said, “the cheap bit is buying the boat.”
Lucy Chabot Reed is editor of The Triton. Comments on this story are welcome at email@example.com. If you make your living working as a yacht captain, e-mail us for an invitation to our monthly Bridge luncheon.