Boats are inherently needy machines. Quality time on the water rarely comes without at least a moment of thought for their own care and needs.
Owning a yacht can take on characteristics of running an international business. For some, a competent corporate accountant and a talented captain may be able to manage the program, but for many, at least some level of professional shore-based yacht management can be a welcome relief.
Administration of a yacht, managing its safety, paying suppliers, managing crew and charter agents is a definite full-time job.The larger the yacht, the more likely it is for such services to be contracted out. This will allow the captain to focus on its safe and smooth operation.
Yacht management comes in many shapes and sizes depending on an owner’s individual requirements. Owners may decide to hire a small firm or individual expert to handle one element. such as regulatory compliance, and another for charter management.
A number of firms, large and small, offer the full lifecycle of management for every aspect of ownership, beginning with an owner’s decision to building a new yacht and ending with its sale.
Therefore yacht management services, need to be tailored to each owner’s specific needs and can include operations support, technical management, safety management, security management, crew administration, emergency response, insurance administration, the creation of offshore crew employment structure, financial management and technical consultancy.
Owners can choose a full or partial package and even take the yacht services à la carte. For owners the decision to register and operate commercially and offer the yacht for charter can add layers of regulations and expense, despite the rewards charter revenue may bring. A management company may, in the long run, be of value saving time, hassle, mistakes and unnecessary expense, especially for the first-time yacht owner.
Chartering is governed by a more complex set of regulations to safeguard crew, passengers and the environment than strictly private use.These regulations can pose significant liability on the owners of the yacht, the captain and crew. In the same way that owning the yacht via a corporate structure protects the beneficial owners in regards to liability protection and taxation issues, having a suitably qualified management company in place, with clearly defined roles and functions, supports the operation of the yacht and assists in ensuring that the yacht is ready for charter at the required times and locations.
So how exactly does a yacht management company work?
If a management company does not have on-staff expertise in a specific area, it often has relationships with specialists who do.
For regulatory compliance, for example, a company that specialises in ISM and ISPS (International Safety Management Code/International Ship and Port Facility Security Code) management and MLC (Maritime Labor Convention) compliance, would be needed.
So who’s coordinating all the details if not a management company?
Often captains serve as the lead management executive, hiring crew, keeping books and managing the technical aspects of the yacht. But an owner moving up in class may find the added layers of regulation and compliance strain the resources and time of his captain. Some owners then use accountants or managers within their businesses and software to coordinate those activities in conjunction with the captain.
The cost of employing a management company can vary widely, depending on many factors including the yacht’s size and the level of services rendered. Companies may offer a fixed-fee charged quarterly, monthly, or annually, or can charge all disbursements and external charges at cost with fees being charged on time-spent.
There is no hard-and-fast rule.
The efficient and timely administration of a large and complex yacht operation involving taxation, financing, technical, crew, safety, security, complex corporate structuring, accounting/budgeting and suppliers etc, can undoubtedly when delivered by knowledgeable and well-resourced experts, save the owner and captain enormous amounts of time and expense.