YACHT: How bad was 2024 for charter companies?
I think the market has slumped by 30 per cent overall. We got off lightly, we don't have all the final figures yet, but it looks like a moderate drop of eight to ten per cent at most for us. The slump came in March, when many fleet owners panicked and offered discounts of 40, 50 per cent or even more for the summer. Some online agencies took advantage of this and sold several weeks' worth of packages with substantial discounts and then sold them to the man. On top of that, the weather in autumn was bad, which cost us a lot of spontaneous bookings.
Do you have an explanation for the break-in?
There are several reasons for this. Firstly, Croatia simply did extremely well in the post-corona years because of the car journey. Thanks to the Nautic Alliance, with which we are also active in Greece, Italy and Turkey, we know that holiday destination trends also move in waves. Now there is a dip. But of course there are also home-made reasons. It is true that prices in restaurants, harbours and the surrounding area have also risen in Croatia.
But some customers also compare it with Croatia eight years ago. That's not fair. Of course you can go to Greece, which is cheaper, but you also have to be clear: the nautical infrastructure in the harbours there is often worse. Croatia is already at a very high level, which many customers appreciate. The few comparable facilities in Greece are just as expensive. What we do understand, however, is that it is more difficult for families who have to pay for everything out of one pocket. On top of that, they are tied to the expensive peak holiday season.
The discount battles of 2024 are no longer viable?
That's right. We are now responding to this. We are already offering families an additional 5 % discount and think that more tourism businesses in Croatia should follow suit. A price advantage model for families in summer is already coming for marinas and buoy fields, together with MySea. Children are the customers of tomorrow, and the industry absolutely needs them! And of course, as always, we are also offering early booking discounts - 20 or 25 per cent are sometimes possible. That's part of the deal.
Is there enough room for manoeuvre or is this a flash in the pan?
You have to weigh that up very carefully, because to put it bluntly: costs have also been rising significantly here for a few years now. Boats have become up to 30 per cent more expensive, berth prices are constantly rising and spare parts have also become double-digit more expensive in some cases. And if you want to keep good basic staff, you have to pay fairly. But the idea in the minds of some customers is: I could get a 40 or 50 per cent discount by booking late in 2024, I'll just do that all the time now! But customers still want 1A quality! That can't work. In the long run, it has to be at the expense of the quality of the boats. A stable company with good boats is simply not possible with such discounts. Everything is getting more expensive, but the charter market is getting cheaper? Very difficult.
More on the subject of charters:
Can we already see what it will be like in 2025? Will we see insolvencies? Or will an inflated market shrink back to health?
If it goes like 2024, I don't rule it out. You can already see that some companies are starting to save on winter work. Fleets need money in spring, and if there aren't enough bookings, the only option is often to sell individual ships. Of course, this is not sustainable in the long term. So far, however, things are looking quite good for us, but you can't really say how the market will react until February or March. In 2024, things also looked quite good until March.
If charter yachts and services are becoming more and more expensive, will this also have an impact on buy-charter models?
That remains to be seen. Of course, the yachts could also be chartered for one or two years longer than before, i.e. seven or eight years. This would allow you to absorb excessively high weekly prices in the long term. You just have to prove to the customer that the older yachts are also well maintained. And they also have to be prepared to book them and not just rely on the new models.
What can customers do themselves for the next season?
In Croatia, unlike in the past, you have to compare prices and see what it costs in the restaurant, the marina or the buoy field. And weigh it up: Is it worth it? Don't just grit your teeth and pay. Steer clear of overpriced offers. Otherwise the operator won't realise that they've gone overboard!
However, I must also say that Croatia has become even more international in terms of customers. And some European nations, such as the Scandinavians, don't find the region overpriced because they compare it with the rest of southern Europe. And they don't travel by car like many Germans or Austrians! The lower travelling costs are still a huge advantage of Croatia.
There are still restaurants where a good octopus salad costs 12 to 14 euros or a real top steak 30 euros. Just take a look at what that costs in Germany! But we also realise that customers have their own solutions: There is more cooking on our boats than there has been for years, as we can see from the intensive use of the galley. Customers are simply changing their habits: on a week's cruise, they only eat out twice, maybe three times. We have noticed this and are now equipping many more boats with their own on-board barbecue. That goes down well! Shopping is very good in Croatia, especially at the markets, where prices and quality are often excellent.
You recently built a land storage facility for yachts in Biograd, one of your largest bases, where you offer a comprehensive technical service for private owners. Is this a way for fleet operators to diversify?
In any case. The 150 berths there are a good investment for the future. We are also starting extensive refits there, for example we are in the process of converting a 20-year-old Bavaria 44 to electric propulsion. I believe that things are looking up again in Croatia. We are generally experiencing challenging economic and political times, and customers are much more sensitive than they used to be. But companies that act sustainably and intelligently now will survive the crisis and profit later. The soldiers of fortune of recent years, who thought charter would be a super easy business, may fall by the wayside.
In any case, we are ordering 35-40 new ships for next year alone, we have owners who simply sign a follow-up contract. And not only in Croatia, our Sun Charter fleet in Sardinia is now 2.5 years old on average. So the confidence in the business is there. And generally speaking, the poor figures only affected Croatia. Italy and Greece are doing well without any significant fluctuations!
