FREQUENTLY ASKED QUESTIONS
Q&A
Yacht Sales
Yacht Management
Charter Crew
COVID-19
Q&A

We recently sat down with Paradise Yacht Management's Co-Founders, Hank Hampton & Steve Schlosser, to go over a detailed Q&A session about charter yacht management. The topics are some of the most frequently asked questions and some that may never cross the minds of industry newcomers.

Where the Industry is Headed

Q: How have you seen the industry change since COVID and how is your outlook moving forward with PYM and the charter industry as a whole?


HH: As soon as the quarantines were lifted In the U.S. Virgin Islands the charter industry down here just exploded. This was mainly due to the closure of neighboring countries, such as the B.V.I., St. Maarten, etc. that were not accepting foreigners. Even after they opened up, the B.V.I. still had and has restrictions making the U.S.V.I. an ideal charter destination. That really has propelled us through the pandemic to not just get back to business as usual, but to flourish. The future is bright for us, for sure.


SS: Yea, we really have seen an unprecedented concentration of newcomers to the U.S.V.I. The global market for charter is actually growing. It was estimated 6.6 billion and it's projected to reach 9.3 billion by 2027 in revenues. So, there's still a lot of space in the crewed charter market for growth. You know, it's just, it's one of the sectors of the market that COVID has driven through the roof.


HH: The crewed charter business is really expanding at a dramatic rate. You know, three years ago, crewed yacht was a pretty good business to be in but with the event of COVID, what's happened is that you know cruise ships have fallen out of the picture. Bareboat charters are a major problem because, you know, obviously the time it takes to go, check in, do your inventory and your technical briefing, your chart briefing, your systems, etc. You wasted probably a large part of the first day. Same on the return. So, what happened is suddenly people started realizing that crewed charter is the way to go. The crewed boat is equipped, it's provisioned, it's got a crew. You arrive there, you put your bag down, you get a cocktail, untie the lines and you're out of there and when you arrive, it's quick and easy both ways.

Bareboat vs. a Management Program

Q: Has there been more of a demand for a bareboat or yacht management program recently?


HHWithout a question; yacht management. What's happened over the last year we found is that crewed charters have become more and more popular. The global market for crewed is definitely growing while the global market for bareboat is taken a bit of a hit. Not just with guests, but especially with yacht owners. The biggest factor is just the way bareboat renters treat the vessel. It has forced a lot of bareboat owners to contact us and get signed up with a yacht management program that has a professional crew taking care of the boat during the season.


SSYou can think of it like this. Imagine a rental car versus a taxi. Which of those cars would you rather be the owner of? Which one has the operator treating it more like it is their own with less risk of damage? Owners are becoming more and more concerned about the condition of the boat, how the boats protected during it's service and what it's going to look like at the end of the charter season. We've seen charter boats look new 15 years after production with plenty of charters under the belt strictly due to the fact that a great crew has taken the care of the boat as their own. That is one of main aspects of this company we strive for.

Bareboat vs. a Management Program

Q: If a potential owner asks "Due to your experience in the industry, what would you say the perfect boat is that I should get?"


HHThat's a really good question. Honestly, it depends on the budget and lifestyle. Keep in mind pre-owned vessels may be cheaper, but may need more maintenance. New boats from the factory will be more expensive, but will come with a warranty. We would say a sweet spot would be, without naming brand names, a 50'-58" 8-pack sailing catamaran. They can run anywhere from $800K to $2.5M. for purchase. We are happy to go over in detail our pro-forma's on which makes the most sense for the owner. With that said, we've seen a lot of success with a 6-packs and 10-packs. It really comes down to the right crew paired with the right boat. That's the secret to all of this.


SSWe can't stress enough how important it is to hire and keep the right crew. That is one of the major benefits of signing up with a well-known management company. We simply attract the best, veteran crews. But it's important to note that the owner needs to treat the crew well to keep them. We teach our owners exactly how to do that, like giving the crew a queen size cabin as opposed to a fore peak, pay incentives, time-off to reset, and so on. It's the only way we can ensure the first guest of the season has the same experience as the last guest of the season.

Purchasing a Yacht

Q: If a yacht owner is new to the industry, how important is it to purchase a yacht through a broker and then get signed up with a management company as opposed trying to piece everything together by themselves?


HH: It is extremely important to have professionals lead the way through charter yacht ownership, especially from the beginning. We have seen first hand numerous new owners try to source the best deal on purchasing, navigate contacts, then try to hire the best crew for that boat, get bookings, do their own maintenance and fail. Eventually, they contact us and we get everything back on track for them. Majority of the time though, they contact us first and we avoid all those issues for them.

What a Clearing House Does

Q: So why is a Clearing House important and what services do they provide?


SS: Generally, all crewed boats have their boat registered in a clearing house and the clearing house manages the boat’s calendar and charter finances. With majority of the bookings coming through the broker network, it's necessary for a third party to manage these aspects. So, the broker network will go and book the boat but they will see if your boat is available by going to the clearing house and then the clearing house will make sure that this booking is processed and for that they can charge anything from one to three percent. We've opened our own clearing house, Paradise Yacht Clearing, to create a more efficient booking process.

How To Choose Amenities & Toys

Q: Once an owner purchases a yacht, what are the basic amenities or toys they should outfit it with?


SS: Before we talk about the toys, you need to have a water maker, a large ice maker, a generator, a Dometic fridge for extra food storage, multiple coolers, and also the largest tender that can be used for that boat. All of these things have been crucial to guest experiences and have been a game changer. Dishwashers and washing machines are optional and are not too popular. The space could be used better instead of having those. Flat screen T.V.s are popular but what we've seen is that they rarely get used. There's somethings that look really good on a brochure but aren't too practical. That's one of them. For toys, the basics would be snorkel sets for all guests, at least 2 inflatable paddle boards, an inflatable 2-person kayak, a large floating mat or 2, a wake board or knee board, and onshore games. Other toys that some charter boats have are water skis, subwing and a foil board. It's important to have a charter boat full of amenities and toys, we've seen it be a deal breaker time and time again.

Crew Placement

Q: So let's talk about crew, what do you guys look for in a charter captain?


HHFor a captain, you got to obviously look for someone that's well qualified with experience. I think it's pretty important that the captain has a track record because of the broker network. If brokers like the crew, they will support the crew. If they trust that the crew’s going to produce a good job, they'll feel more comfortable booking that boat over another. So well-experienced, well-qualified, with a calm nature, and of course they have to be good with people is essential and basic to run charters. In addition to that, crew have to understand that they need to take care of the boat as their own. Especially when it comes to everyday maintenance and making sure they pay attention to detail and take exceptional care of it on and off charter. Generally, a good captain will know how to do service engines, change filters, clean filters, etc. Major maintenance, obviously you need to farm out to the local, you know, the local technical services. We have great connections in the Virgin Islands for those services.


SSWe also pair the perfect crew with the right owner in addition to the boat. You know, they're managing a major purchase and we want to make sure you feel you have a crew you can trust onboard. Trust is an extremely important factor.

Cabin Layouts

Q: Do new owners ask about where the crew should sleep and how to make that decision?


SSYes, we get asked that question a lot. Basically crew take a cabin. So if it's a 4 queen cabin boat crew get one of those cabins making it a 6-pack 3 cabin boat for guests. But If the boat as a bunk cabin, the crew may be okay with that as well. Putting crew up in the forepeaks is not going to attract a crew that’s very happy and could have a lot of turnover and issues. So, it's very important to be sure that in the layout of your boat, you have a realistic crew quarters because a happy crew results in a good charter and happy guests.


HHYeah, just think about it. Your crew literally works 24/7. For seven days straight or whatever the time of the charter. It is a very, very hard job. Steve and I have both done it. So, when crews go to their cabin, they don't want to go into a little, into a little nook, you know, and trying to get some rest. So, it's advisable to consider a “live able” cabin for your crew, but not the best cabin. The best should be reserved for the guests, of course.

Owner Usage

Q: So how does it work when the owners want to use their boat for personal use?

HHGreat question, we get that a lot. Before you sign up with us, we go over expectations and on how much you are interested in owner usage and show you the numbers to cater to their wants but also make sure it doesn't effect the charter season's income too much. The best month is May for owners usage. That is a month when charters naturally have a lull and when we actually have an annual event called Owners Week where we invite our yacht owners to come down to the islands and enjoy a week of events and leisure time to enjoy their boat. It's super fun! We really try to avoid having the owners come down during the Holidays or too frequently during busy months. At the end of the day, we're flexible and want our owners to enjoy yacht ownership as much as possible while having a bottom line that they are happy with.


SSSo, I would say the general standard for owners usage if you don’t intend to utilize the crew for your owners charter is you either put them up at a hotel or you would give them an allowance to fly home or to some other place that they perhaps want to go because a lot of these folks have friends and family in other locations. It's a good way to give them a break as well during the season.

Insurance & Tax Benefits

Q: When it comes to insurance and taxes, what are the benefits of going with a management company with a fleet of your size?


HHAs far as insurance goes, the major benefit is that it is becoming increasingly more difficult to find insurance in the Caribbean, especially for new owners. We have no problem getting insurance for your vessel with our provider of fleet insurance. In addition, we do get a break with premiums. For taxes, if you run your boat, as a lot of people are running the boat, as a corporation and taking advantage of certain and applicable tax breaks and doing accelerated depreciation and writing off costs. So, there's also an opportunity to offset the cost of ownership with some pretty substantial tax breaks. But there are a lot of hooks and a lot of issues that you should be aware of. You could make a decision and not be aware of something that materially affects your business plan in the tax rules. Consulting with a tax professional to discuss your personal current and future tax effects is the best practice.


SSAlso, if you're an owner-operator, you're using the tax advantages inside of your business because that's your sole source of income. If you're still working and you're in your high-income years, what a lot of people will do is they will establish a charter business with a professional crew on board and you're able to structure the business in such a way that you can use the depreciation and other tax benefits to offset taxes owed on income from other business trade or salary. Again, consulting with a tax professional for tax advantages/disadvantages that will best fit your goals is highly advised.


HHThere's so much to this topic. We go over the details about this and all the other aspects of yacht ownership during our consultation to see how our services can benefit new owners and get them up to speed before signing up with our management program.

Yacht Sales
Who should I contact to get the process started?

We're proud to announce our Co-Founder, Hank Hampton is one of the leading certified Yacht Sales Brokers in the industry. With years of experience, not only behind the desk, but behind the helm, he's well-versed in all of the efficient solutions when it comes to purchasing and selling these vessels. He can be reached at 1 (760) 214-8561 or Hank@paradiseyachtmanagement.com.

Does it cost me more to purchase through a broker?

The seller pays our commission, which is already built into the sale price. There are no broker fees paid by the buyer.

Who do you represent? 

If the buyer has hired us, though we are paid by the seller, we represent the buyer. If you hire us to sell your yacht, then we represent the seller. We cannot represent both parties at the same time. 

When do I take possession of the yacht? How long does it take?

At closing, ownership is transferred to the buyer and the sale price is given to the seller – the same as when you purchase real estate. On a standard brokerage deal, the closing date is approximately two weeks after the seller signs the acceptance.

What if I don't sign the acceptance by the date specified in the contract?

The seller can cancel the contract and it will be null and void.

How long does the seller have to respond to my offer?

The standard timeframe is one day – 24 hours. The owner either accepts the offer by signing the contract, counter offers by crossing out the buyer’s offer price and writing in the counter offer price, or rejects the offer all together.

What is the most common mistake when buying a yacht?

Hiring the correct yacht broker is crucial and will take care of the many hidden details that only experienced and ethical brokers know how to navigate. Working with a brokerage that has a solely economical interest may sound very enticing up front but will eventually come back around to negatively effect your bottom line. We are in a position to assist potential buyers in focusing on the type and size of yacht to suit their proposed needs, as well as their budget, without a commercial advantage in steering them in the most profitable direction.

How do I know which yacht is right for me?

Feel free to contact us at anytime to discuss your needs that you are aware of and we will hone in on elements that you may not be aware of to make the perfect decision. 

What is the difference between the inspection, sea trial and survey?

The survey is usually an out-of-the-water examination of the vessel from stem to stern. The examiner provides a comprehensive written opinion on the condition of the yacht, which can run hundreds of pages. It covers everything imaginable from serious problems with the hull to minor notations of an out-of-date fire extinguisher. Copies of the survey report are provided to your financial lender and insurance carrier for their review. This gives them the condition of the vessel, its replacement value, and the surveyor’s determination of its market value.

What if the yacht needs repairs found during the survey?

The seller is not obligated to make any changes or repairs to the vessel until after the acceptance document is signed by both parties. Why? Because the buyer can still back out of the deal until that point. Also, we may be able to negotiate any problems or repairs into the final sale price.

What can I expect from your administrative team?

Our experienced team will guide the buyer through the complex process of acquiring a yacht and advise on the corporate structure best suited to the particular yacht ownership to minimize exposure to taxation and maximize the functionality by analyzing the following: the yachts VAT status; financing requirements; flag administration and mode of operation; international rules and regulations; requirements for crew welfare and; the nationality and residential status of the yacht Owner.

From your experience chartering in the Virgin Islands, what is the size yacht to purchase for optitmal ROI?

Over years we have done the research and seen first-hand which type and size of yachts perform the best. However, the correct matching of a crew to that vessel is key to have a very successful season. We discuss this in great detail in our proprietary presentation.

How much deposit must I make, and when do I need it?

Your deposit must accompany the signed offer contract or be in escrow. The acceptable deposit amount is 10 percent of the offer price.

What is 'Acceptance'?

It is a document the buyer signs after a thorough inspection of the yacht, usually two weeks from the signing of the contract. This document locks in your deposit. By signing the document, the buyer is guaranteeing he/she will purchase the yacht. If you back out of the deal after signing the acceptance, the seller keeps your deposit.

What if I don't sign the acceptance by the date specified in the contract?

The seller can cancel the contract and it will be null and void.

What are some examples or problems I can encounter during the sale process?

    There are always could be some type of hidden or undetected defect in a yacht. Our pre-purchase efforts (i.e. inspection, sea trial and survey) should discover any problems that may exist before you sign the acceptance. If it’s possible to locate an existing problem before the sale, we put our best efforts forward to do so. If the sale price is a rock-bottom price, is being sold “as is” or below market value, or the seller is in distress, nothing you do before the purchase will impact the final sale price. Though the inspection, sea trial and survey are still required by lenders and insurance carriers, their results will not give you leverage to negotiate a better deal. You even may find that, if you still wish to purchase the yacht, you will have to make any needed repairs yourself. These are all things that must be considered before signing the acceptance. Lastly, A hidden lien could be missed during the title search. We use all of our resources to ensure you don’t encounter such problems after the sale and will be with you every step of the way. 

    Yacht Management
    What is yacht management?

    A Yacht Management Company is a shore-based operation that supports all aspects of the yacht charter industry to ensure guests have a vacation of a lifetime, owners have great returns to offset expenses while enjoying the yacht lifestyle, and for crew to have an exciting and rewarding career.

    What are the benefits of putting my yacht in management?

    Charter yachts based far from the owner's home expose them to challenges with communications, logistics, regulatory compliance and potential financial issues. Even if the owner resides in close proximity to their yacht, the administrative resources required to manage the complexities associated with maintenance and repair contracts, insurance, warranty, local regulations, crew management and accounting will benefit from specialist, dedicated management. A yacht manager will undertake technical management, crew management and day-to-day operational management of the yacht, in close co-ordination with the captain and chef.

    Do you offer fleet insurance?

    Yes, MHG Insurance handles our fleet's insurance. Please contact us for further information.

    How many years have you been in business? How did it start?

    Our Co-Founders Hank and Steve met in the USVI several years ago running charters on their own boats and noticed an integrity issue in the industry. They found a need for a quality and respectable charter yacht management company. Between Hank's corporate background and Steve's business skills they started Paradise Yacht Management in 2015. From 2 boats to now over 30, we are the largest exclusively crewed charter yacht management company in the Caribbean.

    As a current yacht owner, what services do you provide?

    Ready to offset those yacht ownership expenses? We offer everything that  yacht management entails such as crew recruitment and coaching, maintenance, operations and admin, accounting and finance and marketing to ensure a successful charter season and ROI. View the details of our services here.

    What else can you assist with?

    We can help with setting-up of a corporate structure for ownership, minimizing tax and VAT exposure, most suitable flag administration under which to register the yacht, legislation concerning crew employment, marine finance, insurance policies for the yacht's hull and machinery, public liability and crew medical.

    What is the CVLA licensing and why do I need it?

    On 8th December 2020, the US Coast Guard announced a further guidance to section 319 of the “Howard Coble Coast Guard and Maritime Transportation act of 2014 (Pub. L. No.113-281 (S.2444)” with regards to Uninspected Passenger Vessel Operations within the USVI. Vessels under 24 meters may now carry up to a maximum of 12 passengers if they receive a Certificates of Inspection from the USCG or letters of compliance/ Small Commercial Vessel Certificate (SCVC). All of our charter yachts are CVLA approved and legally able to conduct charters in the USVI. For more information :https://mycvla.com/

    What is a DPA?

    Although not required for charter vessels less than 500GT, we do have a DPA in charge of operations and safety while vessels are underway. A DPA is a Designated Person Ashore that provides a link between the Managing Company and those on board the yacht that is on call for emergencies and much more.

    I'm interested in yacht ownership, but where do I start?

    From purchasing your vessel to converting it to a charter yacht to upgrading when the time comes to sell, we consider ourselves to be 'all inclusive' when it comes to yacht management. Our staff is standing by ready to answer all your questions. You can contact us here.

    Does my yacht NEED management?

    Legally, any charter vessel under 500GT does not need to be managed. However, we have first-hand experience of owners that came to us after attempting to run a charter business on their own. It takes an experienced team to navigate all the details of running a successful charter season. 

    Does the crew live aboard?

    The majority of our crew do live aboard the vessel. In this industry it is extremely beneficial to have a full time crew live aboard for charter efficiency, maintenance, and safety in the event of an emergency. We encourage our crew to treat your vessel as if it is their own and is always in charter ready condition.

    How does the off-season delivery typically work?

    Depending on the contract details, we coordinate either with the current crew or a third party to deliver the vessel to its safe haven for the offseason. We will also do the same for the return passage to get prepared for the charter season.

    Where do you recommend hauling out during hurricane season?

    We typically use three locations to keep your vessel out of harms way in Hurricane season: Puerto Del Rey in Puerto Rico, Clarkes Court in Grenada and Tyrell Bay in Grenada.

    Charter Crew

    Do we live aboard?

    Most of crew do live aboard the vessel. We encourage a balance of making it your home, guests spending a week on it and respecting that it is the owners property. If you prefer to live on land, that can be managed as well.

    Will I/we have a cabin to sleep in?

    Yes, we market the yacht as having one less cabin from factory to factor in the crew quarters. If you and your mate prefer to sleep in the same cabin, it will be a full size cabin or bunks. If you prefer separate quarters, it could consist of a midship cabin and a forepeak.

    Do I have to be have a college degree in culinary to be considered?
    For a chef, a culinary degree goes a long way, especially in marketing, but it is not required to work on our vessels. We do however, need proof of a sample menu and previous food photos prior to hire.
    Do I need to be a US citizen to work in the USVI’s?

    Unfortunately, we are only accepting CV's for US passport/American Citizen's or with a valid US Green Card. The B1/B2 Visas will not qualify as we are unsure if the BVI's will re-open for charter. 

    Where can we go when we are not on charter?

    We encourage our crews to enjoy and explore the area when they are not on charter to be able to show guests a great time when they are. Showing guests your favorite or secret spots go a long way towards their experience. We advise our crew to always be close by and charter ready in case of a last minute situation that requires you to be local. This mainly includes anywhere around St. John and St. Thomas. 

    Will we have to be under contract? If so, for how long?

    Yes, typically our crews are under a 2 year contract with us and the vessel. We are very understanding and flexible if adjustments need to be made. Feel free to inquire about your constraints.

    Do you ever use freelance crew?

    We have hired freelance crew in emergency situations, but we prefer crew under a 2 year contract. Guests and brokers love to see crews with a history on the yacht, which leads to an increases in reputation, charters and tips.

    Do I need to own a car?

    Crews that live aboard full time rarely own a vehicle. There are pros and cons.  For provisioning, taxis are mostly used or borrowing a friends car. The final decision will be your preference. 

    COVID-19
    Whats is the current procedure to enter the USVI?
    What happens if a crew tests positive right before our charter?

    If a crew member tests positive for covid before the trip, we will try to find a suitable substitute crew or yacht.
    If no substitution can be found, we will try to reschedule. If a reschedule is not possible, we will refund. Please contact your charter broker for exact terms.

    Are we required to wear a mask on charter?

    You may wear a mask if you please but you will not be required to. The crew will also abide by any requests you may have regarding wearing a mask & distancing. Your safety is our top priority.

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