In the state of Florida, if you want to sell real estate, then you must meet a list of criteria determined by the Department of Business Regulation. You
must be at least 18 years old and hold a high-school diploma. You must provide a valid Social Security number and agree to have your fingerprints recorded
electronically, so the state can track your whereabouts. If you’re a new broker or even an experienced broker who is new to the state, you must take a 72-hour pre-licensing course. No matter who you are, you also need to prove that you’ve been working as a real-estate associate (in training) for at least two years. Only then are you entitled to take the 100-question exam to actually become a Realtor-and if you are among the lucky 50 percent of applicants who typically pass, your license will be good for only two years. Then you have to take a 60-hour post-licensing course as part of the license renewal process.

If you get caught selling real estate in Florida without a license, or if a client files a valid complaint against you for shady business practices, then you can
face fines or have your business license revoked. If your violations are extreme, you can be prosecuted just like a drug dealer or a tax evader. If it’s proved that you discriminated against a client based on race, gender, or marital status, then you can also be prosecuted under the Florida Fair Housing Act. For that alone, the state can go after you with a penalty of $10,000 per violation.

In other words, even if all you’re selling is a cheap piece of swampland in the Everglades, the client has a formal state body standing by to take action if you fail to represent him legally and ethically.

By contrast, in order to sell a million-dollar yacht charter from an office in Fort Lauderdale, you need to get a job working for a company that markets itself as being in the charter business. Or hang a shingle on your door saying that you are declaring yourself to be a charter broker. If you do an unethical job, if you break the law, or if you vanish with the client’s money in the night, then the client can hire a lawyer and try to sue you. If he can even find you.

“It really is quite a thing when you compare them side-by-side,” says a Florida-based retail charter broker who also works in the real-estate business, and who asked to remain anonymous. “The Florida State Real Estate Commission is one of the strongest in the country. It was made that way intentionally, because there were so many retirees in Florida being taken advantage of. That commission has teeth. It protects clients from unethical agents. The charter industry? We don’t even have teeth behind our contracts if the yacht owners decide to ignore them and hang the brokers and clients out to dry.”

The idea of licensing for charter brokers has come and gone several times in recent years, with most industry professionals more than happy to dance on its
grave every time it seems buried for good. Nobody relishes the idea of government regulations or fees-and that’s just as true in Monaco as it is in Miami.

In fact, geography is often cited as a primary reason that licensing would not work in the charter industry. Real estate laws are easier to conceive because
properties for sale have a physical location that does not change. If you’re selling real estate in Palm Beach, then you are bound by the laws of Florida, plain and simple. Charter yachts are far different. Each has a different flag state, is marketed out of a different country, and is booked by brokers worldwide representing clients of multiple nationalities.

Who, then, would license a retail broker who sits at a desk in Antibes and promotes boats for charter in Italy to clients in America? Would she need a license in every country where she books a boat? And if she wanted to book a boat in Newport, Rhode Island, would she need a license there in addition to one from the state of Florida? Would there be a charter license that covers the entire United States? The possible permutations of the actual licensing body are downright mind-boggling.

Another practical consideration is funding. One reason the Florida Real Estate Commission can afford to investigate impropriety and take action is because it is so well-funded by the fees that people pay to become Realtors. Beyond application fees, it costs most Realtors about $1,000 a year to maintain an active license in Florida. There are about 84,000 real estate companies in the state. If each one has just three employees, that’s a quarter-million Realtors paying fees that amount to millions of dollars a year. It’s a hefty budget to have in place, one that allows the commission to bring real leverage to bear when necessary.

By contrast, the charter industry is minuscule. To financially support a commission in a way that gives it power and teeth, the industry would either have to explode in terms of the number of brokers or make annual fees so high that they would be impossible to pay.

“It’s just not practical when you get into it,” the Floridabased retail broker says. “Would it be good to have stiffer standards? Of course. But a license without a strong commission to enforce it isn’t worth anything. It’s just extra fees that we don’t need to be paying as an industry.”

Interestingly, while there is broad, industry-wide agreement that licensing is a bad idea, there is also an overall feeling that stronger standards would be a good thing for business. Many central agents say that retail brokers should be required to undergo training, while many retail brokers say it is the central agents who should be put under the microscope. Countless charter professionals seem to think a higher barrier to entry would be good for the overall business, but nobody thinks that applying tougher standards would do much good if they only affect one segment of the industry.

A Florida-based central agent who asked to remain anonymous says that she was more than a bit surprised at the complete lack of licensing required to enter the charter business. She agrees with the retail brokers who say that CAs should have some kind of formal training, if not in the form of a state or federal license, then at least in the form of an industry-wide curriculum of classes that are required to do business. But she also feels that retail brokers should be made to do the same.

From her standpoint as a CA, some retail brokers are regularly working without basic knowledge, let alone ethics.

“I came to charter after being in the real-estate business, and I was shocked at the way the charter business operates,” the central agent says. “You deal with far more contract legalities in charter than you do in real estate, and yet anybody is allowed to call themselves a retail broker or a central agent. I’ve gotten inquiries from retail brokers who have no idea what the contracts mean. They absolutely are not protecting their clients’ interests at the same level that I am representing the yacht owner. So to me, the question isn’t so much about yes or no on licenses as it is about overall competence. I’ve always thought it would be a good idea for retail brokers to be required to have a basic level of education before doing business, and I guess I’d have to agree that maybe CAs should be required to do the same.” The closest that the charter industry comes to requiring education about how to do business is the admission standards that are used by professional organizations.

The American Yacht Charter Association is the strictest, requiring seven years in the charter business before an application will even be considered. MYBA requires two years of experience, as does CYBA International. The Florida Yacht Brokers Association does not ask about years of experience in its online application, although it does require an applicant to have two sponsors from within the industry.
None of these organizations has the power to impose fines or revoke a member’s ability to legally do business, even in the most egregious cases of misconduct. The most that these groups can do is revoke membership, which means nothing to a charter client who is unaware that the professional groups even exist.

In this respect, professional organizations are quite different from state-backed licensing commissions, especially in the eyes of a client seeking financial relief from a charter experience gone bad. However, the industry experience required for most memberships does jibe with licensing standards that are intended to ensure basic competence.

“To me, the closest organization we have in terms of ensuring serious business ethics and standards is AYCA,” says the Florida-based retail broker. “You need seven years of experience. That’s an even higher standard than you need for real estate in Florida. It just doesn’t have a licensed attached. At the end of the day, we’re a cottage industry. Smart clients check references. Anybody who has been booking charters for seven years is going to have a track record that can be verified.

“In an ideal world,” she continues, “if you could have an enforcement agency with teeth, that would be great for charter clients. But we’re too small of an industry. We’d all do better spending our time on beefing up the entrance requirements and education requirements in our professional organizations.”

Publisher’s Opinion

Yes, a formal license might indeed ease the minds of clients booking a vacation, but the important question is not whether people would prefer to buy charters from licensed brokers as opposed to unlicensed ones. Of course clients might prefer to see a license – if given that choice – but the desire of the client doesn’t mean that anyone actually needs a license to get the job done.

What’s more important is that the people who control and offer the charter product need to know what they are doing and be provably qualified to do it. In our opinion, the central agents and charter captains should be held to the highest standard. Going overboard about qualifications at the retail level, to us, is a mistake. The charter industry needs all the retailing help it can get to expand sales, including through travel agents.

Some CAs believe that retail brokers should know everything possible about charter before they are even allowed to talk to a client, but we suspect this might have more to do with protectionism and professional snobbery than with actual consumer benefits. In our experience with other luxury leisure products, it falls to the wholesale agents to be the true experts about the products that they are paid to represent. The foremost knowledge, experience, advice, protection from honest mistakes, and protection from dishonest representations should be provided by the wholesale community – which, for the most part, it is within the charter industry.

Retail brokers, in our opinion, need not be consultant surgeons as well as general practitioners. In the charter industry, the job of a retailer should be to fire the imagination of potential customers. The CA should offer strong and friendly support to such retailers, including providing the administrative framework for bookings—payment systems, contracts, suggested itineraries, preference sheets, and so forth. An occasional “thank you” to the retail broker would not go astray, either.

This is a well-established structure for doing business across most industries. Licensing is one way that this structure is achieved in other segments of the luxury industry, but we do not necessarily believe it is best for charter. Retail brokers should not have to be licensed at all, in our opinion. CAs do require some sort of provable competence, but we believe such testing could be adequately and formally achieved by a process administered within the industry—through professional groups such as MYBA and AYCA.

Are you better off making a deal for a timely cover feature with a leading magazine? Can you get more mileage out of a publicity plan that includes multiple magazines over time? Charter Index Editor Kim Kavin gets the inside scoop from the marketers and journalists who make magazine articles a reality.

Each time a new yacht launches, the owner believes it is the finest boat the charter market has ever known. He has visions of his pride and joy appearing simultaneously on the covers of Showboats, Yachts International, Boat International, The Yacht Report, Yachting, and more, with each magazine providing extensive coverage along the lines of, say, an eight-page feature. He tells his management company to line up the requisite exposure, envisioning central agents and marketing directors on the telephone with editors and writers around the world.

And then, the reality of the publishing business sets in. The exclusive, as it’s known in the marine magazine world, is a concept that drives coverage more than any other. Every magazine editor wants to splash the screaming words “World Exclusive!” across the cover, telling readers that they should buy that particular magazine because it offers a first look at a new yacht that they can’t read about anywhere else. This, of course, directly conflicts with the typical yacht owner’s wishes. He wants his boat to be featured in as many magazines as possible.

When the idea of exclusives first descended on the charter scene, they came with few restrictions. Magazines demanded, say, a one-month window during

which they would have exclusive information about a yacht. After that, the yacht could appear in every other magazine worldwide. Most central agents, yacht owners, and editors alike felt this was a fine deal. They made it again and again without hesitation.

Nowadays, though, some magazines are working in ways that extend the one-month window far longer. In some cases, a single magazine will gain copyright to
the photographs of a yacht’s interior and then hold them for more than a year, just so other media can’t publish them.

“The competition has really gotten a lot stiffer among the magazines,” says Diane M. Byrne, who coordinated megayacht coverage as executive editor of Power & Motoryacht for many years before creating the website MegayachtNews.com. Some editors are going to yacht owners as early as the first weeks of construction. They promise a cover and a big feature, and they tell the owner, ‘You’ll have the biggest coverage in time for the boat show or yacht race or whatever it is that’s important to you.’ The owner gets excited, and the magazine doesn’t necessarily make it clear that they’re going to prevent any other magazine from doing feature coverage for three months or six months or longer.”

Alev Karagulle, marketing director at Burgess Yachts, says restrictions from non-marine magazines in the luxury publishing business can be even worse. “Non-yachting titles are way more brutal,” she says. “The embargo can last for a year, which is commercial suicide for a charter yacht. We’ve never accepted an exclusive with a longer embargo than one month after publication in a marine title, but it can and usually does stretch the embargo period if the magazine with the exclusive has copyright on the photos. In these cases we just have to become more creative about the type of coverage we extend to other titles.”

From a marketing perspective, Karagulle says it is actually better to stagger media coverage across as many months as possible for a longer time period of overall coverage. Amy Halsted of The Halsted Agency, which handles public relations for International Yacht Collection, agrees—and says that the business of magazine exclusives plays a bigger role in overall coverage than most yacht owners realize.

“I once had a client tell me that he had agreed to an exclusive after being approached by a photographer,” Halsted recalls. “The client was excited because the photographer told him he could get the boat into a particular magazine. What the client didn’t know is that the photographer had promised the photographs to that magazine as an exclusive, and the magazine ended up taking 16 months to run the article. It was horrible. It’s important on these exclusives that you negotiate the exact terms, differentiate between print and online usage, and spell out the dates when coverage will appear. If I give an exclusive to a magazine that tells me the story is going to run in August, then I call them in May and say, ‘I want you to know I’m dropping a press release about this boat to all the other magazines, so they can run it in October.’ I will not have the publicity on that boat bound up in any way without control.”

The danger in attempting to stagger coverage is that some magazines will end up in a position where the yacht has already been featured in all competing titles. The editors who are last to get the story don’t want to look like their coverage is outof-date, so they simply wait for the next build from the same shipyard. The effect on charter publicity is not even a consideration.

Byrne says that one strategy for yacht owners who want to maximize publicity is to sign on for the exclusive, but also request that the magazine send a wellknown freelance writer instead of a staffer to produce it. Freelancers get paid by the article, instead of by a salary from a single title, so they have a financial incentive to produce as many articles as possible for as many magazines as they can. Once the exclusivity period ends on the original article, the freelancer can immediately pitch other articles to additional magazines.

“For me as a freelancer, a good example is the 281-foot Derecktor Cakewalk,” Byrne says. “I told the shipyard and the captain that I write for Superyacht World in London, Yachting in the United States, Boot Exclusiv in Germany, and a few others in addition to my website MegayachtNews.com. They specifically wanted to be in Yachting, but they got all of the other coverage as a bonus based on what I had in my notebook. They were thrilled, and of course I still have all my notes and am looking for even more angles that I can sell to even more magazines.”

In reality, there is a smarter way to gauge website traffic. Yes, you need healthy traffic in order to have a successful website—but “healthy traffic”
means far more than just the number of unique visitors. It means the most possible people who are seriously interested in yacht charter, finding your website through multiple sources.

It’s not enough to ask, “How much traffic do I have today?” The smarter question is, “How are valuable, potential clients finding me online?”

The best answer is through multiple traffic sources. The healthiest websites regularly get serious readers from all kinds of places. Some of the key traffic sources for any healthy website are described below, along with tips for making the most of each avenue.

Search engines. Typically, search engines such as Google and Bing! are among the top traffic sources for any healthy website. They are important because they tell you that your program of search-engine optimization is working. This means search engines are actually finding the content you are uploading and then directing other people to it.

Search engines are affected by everything from website construction to content updates. If you’re failing to receive healthy traffic from search engines-
say, at least 25 percent of any given month’s new and unique visitors-then you might consider rebuilding your website or adding more content, either on your own or through a database add-on program like the one that Charter Index offers.

Social media. Sites like Facebook, Twitter, and LinkedIn are all examples of social media. While many websites receive less traffic from social media than from search engines, many websites also report receiving more targeted traffic from social media followers. The quantity of visitors may be lower, but the quality may be higher.

The easiest way to begin a social media campaign for your website is to ask your current customers which social media outlets they already use. If 85 percent of your clients are already on Facebook, then it makes sense to start a Facebook page and use it to grow your website audience from your existing client base. This is the technological equivalent of mining for referrals-a tried-and-true marketing technique since long before social media even existed.

Content marketing. Content marketing means writing keyword-targeted articles that are published on other websites with links back to your own website. For instance, if you are interested in targeting charter clients for the Virgin Islands, then you might write a “guest post” for a popular blog that covers the Virgin Islands. As compensation for producing the content, you would ask for a live link back to your own website.

The primary benefit of content marketing is that it lets you reach the entire audience of another website in one fell swoop.

Direct marketing. This is another tried-andtrue marketing technique that existed long before the Internet, but that can now be applied to it.

One of the easiest (and free) ways to direct market your website is to include a link to it in your e-mail signature. Other methods (not always free) include enewsletters that direct readers back to your website.

Pay-Per-Click Advertising. Pay-per-click advertising, be it on Google, Facebook, or any other high-traffic website, can be a good way to generate website traffic. And the traffic does tend to be healthy, since most services now let you target potential visitors with serious detail.

However, anyone who gets into this game should be aware that the deepest pockets tend to get the best results. Several charter companies report spending upwards of $7,000 each month on pay-per-click advertising to generate the best results on Google.

Camper & Nicholsons International

Those of us who work in and sell the yachting lifestyle are specialists of this venue. At a recent luxury marketing forum, one of the highlights focused on being a specialist in your field and standing out from those who are not! I would have to say I would not encourage anyone to sell a product they are unfamiliar with. Many details come into play during the charter process that need to be pointed out to clients and explained. Someone from outside the industry would not understand this process. Some examples to note are contracts, cruising areas, distances, yachts, and crew. The concept of planning a yachting holiday is very specific. Having a full understanding of the “how’s and why’s” matters tremendously. By adding a third person into the charter process, information can easily be diluted. The trend of our industry for years has certainly been repeat and referral business. Clients who spend the amount of money they do want to know they are dealing with knowledgeable individuals—specialists in the field. Similar to anyone purchasing any expensive item, clients prefer to go to the source that knows the item intimately.

Central Agent: Shawn Laird,

Northrop and Johnson

I never want to shut the door on a potential booking, even if that client comes from a travel agent who has never before booked a yacht charter. However, I do think that most travel agents lack a basic understanding of how yacht charter works. It is their job to represent the client while I represent the yacht’s owner, and I am not willing to work with a travel agent who is failing to represent the client properly. I just don’t feel it’s the professional thing to do.

In the past, when travel agents have brought bookings directly to me, I have always suggested that they use the co-brokering system that the charter industry has in place. A travel agent working together with a seasoned charter broker has always produced good results for me in terms of past bookings. And, to the best of my knowledge, it has always produced good results for the retail brokers and clients as well.

The most important thing is that we get as many qualified clients as possible into the charter industry, so they can see what a fantastic vacation experience chartering is. If the client happens to come through a travel agent initially, I see no reason why the industry shouldn’t welcome that client using the co-brokering system that has worked so well in so many previous instances.

Charter Captain: Glenn Brain,

Essence – International Yacht Collection

In my opinion, yes, travel agents should be encouraged to sell yacht charters.

In the current market, where many yachts are struggling for bookings, the charter brokers just aren’t getting bums into the beds. From my perspective as a captain wanting as many charters as possible, it makes sense to widen the scope of marketing and allow travel agents to sell.

If travel agents can increase charter revenue, then just about everyone will be happy. Yes, the travel agent will get the commission, but the charter brokers didn’t have those clients anyway, so they’re not missing out on a commission. If the brokers were bringing all the clients all the time, it would be different, but the current economy shows us that we need to bring clients however we can, and reward whoever brings them with the commission.

From the yacht owner’s perspective, a travel agent’s client is no different than a charter broker’s client. The owner is receiving revenue.

And the crew’s perspective is the same. No matter where the client originates, we just may earn a tip.