Chartering My 58TC

[Sparky1]

Yep, I've talked about it before, but I think I'm going to give it a shot. Heck, I've already secured a domain name and corresponding email address. Now it's just a matter of getting the boat squared away and figuring out all the in's and out's of such an endeavor.

I'm signed up for a course that will get me my captains' license in December, so I'll have that much out of the way. Then will come getting the proper insurance (don't even know where to begin there) and addressing any business license(s) which may be required. I know Angela will be able to shed some light on such things, and maybe somebody else can as well.

I'm on a very pretty stretch of river and plan to offer week-end trips from my marina to the Chattanooga waterfront via "The Gorge". Saturday night will be spent on the dock at MarineMax, and there are tons of attractions within walking distance. Then it will be back to the marina on Sunday. Once I find out what all the fixed costs will be, I'll try to figure out how to price such a charter. The way I figure it, if I can show a $1 profit after deducting all my expenses as well as depreciating the boat, I'll be ahead of the game while keeping the tax people happy. What more could a boat junkie ask for?

Now then, who wants to give me some advice? Better yet, who wants to book a cruise?

 

[SportFishCruising]

I really like your idea. I was planning on a convertable model to take people salmon fishing, but I am beginning to rethink it and have broaden my model choices to include the YF and MY because I want to live aboard too, and with these models I could take family outings around the Toronto Harbour and there are many interesting sites there. There is Toronto Island, Ontario Place, the Thousand Islands, etc. If I could drive my boat every weekend or whenever, and have it cost me only a $1, then I'd concider it a success!

 

[Sparky1]

I've done a little bit of research, and as far as I know, nobody else on that section of the river is doing anything like this. There are some party-type cruises which run the same section of river, but that's a whole different ballgame.

Speaking of ballgames, I figure maybe I'll offer a UT football package if somebody wants to take in a home game in Knoxville. No doubt that would be more than a week-end trip, but I would imagine there would be some folks who would like to impress their friends by showing up for the game on a big Hatt. Then there's always the possibility somebody may want to take an even longer cruise, like down the Tenn-Tom for example. Heck, maybe that would be the key to attending the next Gulf coast rendezvous.

One thing's for sure, the nicer I make the boat, the more I'll be able to charge. I've got some connections with a limo service out of Nashville, so I can tie that in as well. I did notice an outfit who was offering cruises on the Cumberland River outside of Nashville, and they were charging $600+ for an overnight trip into Nashville which did not include staying on the boat. Oh yeah, the boat is a 44' Sea Ray convertible, so it wouldn't exactly be conducive to sleeping 6 paying passengers.

 

[ThirdHatt]

That sounds like a great idea, especially if there's a real and steady market for such a charter in your area. That's probably hard to determine before hand, but you've already decided to go for a coast guard 6-pack license anyway and hopefully you've commited to get the boat running properly and the rest of it in shape as well.

It's probably worth mentioning that you will want to have the ENTIRE boat in very good shape so that you can take a bunch of interior and exterior photos and make up flyers, post them on your new website, etc. Of course you'll have the engine repair done first as the mechanicals are top of the list (reliable generator & A/C or heat for to/from the dock), but the entire interior of the boat will need to be fresh and clean as well. I would think that anyone paying for such a luxury would want just that, luxury which means from the sofa and chairs to soft goods (pillows, curtains, carpeting, bedding) to new audio/video equipment with ipod dock, etc for their use and enjoyment while on board.

You would also want to consider if you will charter to 4 people and you stay in the fwd stateroom or charter for 6 people and then you may have to go home to sleep if you live close or make some other arrangements, that is if you would consider leaving strangers on your boat with you not on board.

I think that pursuing such a business venture may be just the push that you need to get your 58 in the shape that you have always wanted, and also you could finally realize your dream of living aboard at that point as well.

What about the idea of trying out the charter thing with the 41 at first which is already ready to go? You could test the waters so to speak and see how things work out without such a huge financial investment in the 58.

 

[Sparky1]

Byron, most of what you said about the boat was covered with my statement, "One thing's for sure, the nicer I make the boat, the more I'll be able to charge." Having everything fully operational goes without saying. As for trying things out with the 41 first, it's not on a section of the river that would be as conducive to charter as that where the 58 is. Anything I do to the 58 would only serve to increase its market appeal when the time comes to sell it. My primary focus would be on the interior while giving the outside a good fluff and buff and possibly a new paint job down the road. It won't cost much if anything to get this charter business up and running between Internet leads and knowing people in the boating business in this area. They along with various movers and shakers will be my first clients with a free cruise to get the word out to their friends.

The plan would be to charter the boat for a set fee regardless of whether or not I had the full six pack of paying passengers. When I have six passengers, the plan is for me to take the forward stateroom while placing the other guests in the master and guest (converted to a double berth) while having a sleeper sofa in the lower salon. Kids wouldn't mind a sleeper sofa, and most couples would prefer it over bunk beds in the forward stateroom. Everybody would have access to a head without disturbing anybody else, and it's only for one night.

Maybe I'll get a bartender's license and make some real money serving alcohol, and I haven't given up on the idea of making it a floating brothel.

 

[67hat34c]

Agree, start now with the 41. If it works out then hire another capt when you get the 58 up and running.

How many yachts like your 58 are in the area?

 

[SportFishCruising]

LOL..."floating brothel"...kinda floated by my mind too; of course if serving liquor, you need a good looking server anyway

 

[Sparky1]

Agree, start now with the 41. If it works out then hire another capt when you get the 58 up and running.

How many yachts like your 58 are in the area?

As far as I know there are no yachts like the 58 for charter. As for how many yachts in that size range that are running up and down the river, there are quite a few, but not that many classic Hatts.

Hiring another captain is not all part of the plan. The whole idea is to subsidize my boating addiction by taking advantage of every means possible. The 41 needs nothing, the 58 needs plenty. The 41 is my personal boat, the 58 isn't. Starting to get the big picture now?

 

[Sparky1]

LOL..."floating brothel"...kinda floated by my mind too; of course if serving liquor, you need a good looking server anyway

You saying I'm ugly?!!!

 

[SportFishCruising]

You saying I'm ugly?!!!

ummm...no, not really. I just don't drink enough for you to be my type
Why? Was it your intention to have a male brothel for female customers?

 

[Sparky1]

ummm...no, not really. I just don't drink enough for you to be my type
Why? Was it your intention to have a male brothel for female customers?

Hey, a man can dream can't he?

OK, let's stop the silly stuff. I need some input from those who have ventured into this area.

 

[ThirdHatt]

If I were you, I would just pick up the phone and give Angela a call. That would be by far the easiest way to get all of your questions answered at once by the one person here who has the most knowledge on this subject.

She also knows the people on McGregor(sp) who have been chartering their 58 in the BVI's for many years now. While they are doing precisely what Angela wants to do eventually, I believe what she is doing right now is what you are planning to do so I really think that she would be able to offer you many suggestions and info on how to get your new business off the ground.

GOOD LUCK!!!

 

[Sparky1]

Yeah, I haven't talked to Ang in a while, so I'll give her a call. I've always wondered how her living aboard her boat worked in terms of tax implications, and she may not want to discuss that in public. I don't plan to live aboard mine anytime soon, but you never know.

Am I to understand she's the only one on this forum who's had chartering experience?

 

[Pascal]

We run charters on the 70 footer i captain, down here in winter and up north in new england in the summer.

standards for the typical charter boats are much higher than for the average personal boat, not just mechanically, but everything else as well from plates to towels to linens... the boat need to be spotless, inside out.

all that can cost a lot of money although it's a business expense as long as the operation turns a profit after a while or else the IRS will start asking questions.

You cant' realistically run a real charter without at least one crew, not talking deck crew but stew/chef. Guests need to be attended to at all time, whether it's to make sure they dont' do anything stupid like sitting the swim platform underway, or serving drinks, snacks, etc... The crew also better be an excellent cook and that also takes a lot of time. Basically, when Breakfast is done they have to get started on lunch, and by the time lunch is wrapped up, it's time to start working dinner.

for a short and simple weekend charter (2 to 3 days), plan on a full day preparing the boat, provisioning, etc...

obviously it depends on the kind of charter you are doing, on a small boat or sail boat, a few sandwiches or frozen burgers thrown on a BBQ may do, but if you're going to use the Y word, the standards are pretty high, think exclusive high end B&B. At least that's how it works here in So Florida or up in New England, no idea what the guest expectations will be like in TN.

 

[SKYCHENEY]

no idea what the guest expectations will be like in TN.

I think this may answer that question.

 

[Pascal]

i can't help but wonder where you found that picture.

on second thought... never mind.

 

[yachtsmanbill]

Ya just gotta know Ive been biting my tongue about this...
Keep it a dock queen and entertain accordingly. ws

 

[Boatsb]

Gotta luv the tub.

And wow a jacuzzi on the top deck.

 

[Sparky1]

Pascal (notice I'm not addressing anybody else who posted after me ), chartering a boat in Florida or the NE for a week is not the same as doing a simple overnight excursion after about a 3 hour tour. Yeah, that'll be part of the pitch... little buddy. That's about how long it will take to run from the marina to the Chattanooga waterfront.

I don't plan to have anybody but me and the guests onboard. No doubt I'll have to pay somebody to keep the boat nice and clean as I won't have time to mess with it. I'll have some soft drinks, water, and munchies, but anything else they want to eat or drink on the way up or back would be up to them. That's the neat thing about making the Chattanooga waterfront a destination. There are tons of bars and restaurants within walking distance of the docks.

I'm sure I can work a deal with some of the local attractions, like the Tennessee Aquarium, to come up with some passes as part of my cruise package. I really don't envision anybody spending a lot of time on the boat short of the ride up, coming back onboard to spend the night, then the ride back later that afternoon after they've eaten lunch at the restaurant of their choice. There will be a learning curve as to getting all this figured out, but that's how I'll start.

As for the IRS, I don't see that as a problem. I think it's 5 years you can go without showing a profit. After that, they look at it as a hobby. I'll need to consult my accountant about such things, but I should be able to have all the necessary work done on the boat within that period, then I'll start clearing that $1 per week I mentioned earlier. I don't know what the depreciation schedule is for a charter boat, but hopefully that's 5 years as well. Hey, who knows, maybe it will be a moneymaker for me. There's only one way to find out. Bring Naomi and come up for some lessons in locking through a dam with a 50' lift with one line on my center cleat. I'll make you guys a special deal.

 

[yachtsmanbill]

Randy, by the time you figure out the learning curve...it will be too late. Word of mouth is the greatest tool you can use. You must know what people want and expect BEFORE you charter your first trip. If the first one doesnt work out good you may never get a chance to redeem yourself. Draw up a BUSINESS PLAN and redraw it at least 4 or 5 times. Then run it past the experts here. Ppat