Yacht Charter in Croatia – Post-Covid Time | Boris Miškić, GMBA-Croatia

Marine business and nautical tourism has been growing steadily and permanently in recent decades, especially in the Mediterranean,  the home of yacht charters. The real growth of the business began in the 1960s, first in the economically more developed countries of the northern Mediterranean, and today occupies a significant place in the economies of Spain, Italy, France, Greece, Croatia and Turkey. Other Mediterranean countries are also developing nautical tourism, which mostly depends on the economic and political security and stability of individual countries.

Nautical tourism, with all related business and activities, is definitely one of the most important and most recognizable tourist products in Croatia. Very good weather conditions almost all year round, extremely attractive and indented coast with more than a thousand islands, excellent infrastructure and a long tradition of nautical tourism, are the reasons why Croatia is today one of the main European and world destinations for boaters.

There are almost 150,000 small yachts and boats moored in unclassified and / or organized local municipality ports, owned by the local population, mainly for sport fishing and for personal leisure use by owners and their families. Additionally, in designated Croatian commercial nautical tourism ports  and marinas there are about 14,000 boats and yachts for commercial leisure. The classification in Croatia defines 185 ports of nautical tourism, with a total of 18,625 berths, of which 64 are standard commercial marinas with annual mooring berths, with about 16,000 berths in the sea.

Statistics show that in 2020 there were about 0.4% more vessels on an annual berth in marinas than in 2019, but the same statistics also record an extremely large decline in vessels in transit. The number of daily visitors into marinas was 40.7% lower than in 2019, which causing a significant decline in marina revenues, but also a decline in all other nautical-related activities. This negative result is definitely a consequence of the Covid 19 pandemic, and in relation to the spread of the disease, epidemiological measures taken to limit the spread of the disease.

The pandemic certainly had the most significant impact on charter agencies. According to relevant information, Croatia has as much as 40% of officially registered yachts for rent in the World. In accordance with the tradition of nautical tourism, the charter activity is very well administratively organized and legally regulated. Currently, about 950 charter agencies are active in Croatia, and about 4,650 yachts are registered for exclusively commercial rental purposes.

Most of the yachts are family size vessels, 10 to 18 meters long, with 2 to 4 crew cabins. The users of this service are families, sailing schools, or groups of friends, who organize their active vacation in one of the most hospitable waters for this type of tourism. Managers, architects, doctors, workers and entrepreneurs, during one or two weeks become Masters of the ship, and decide about visits to various seaside places, or on an overnight stay in protected natural bays. Swimming in the crystal clear sea right next to the boat, or visiting cultural and historical sites, as well as an exceptional gastronomic offer, make this type of tourism very attractive. Recently, during different closures in some countries caused by epidemiological measures, people have become much more cautious. Unnecessary crowds are avoided, a kind of distancing from other groups or strangers is required. In this sense, all travel agencies are recording fewer inquiries for hotel accommodation, and an increase in interest in renting detached apartments, caravans, holiday villas, and thus yacht charters. Unfortunately for the nautical industry, instead of the season that would otherwise begin in April and end in late October, increased interest is shown most for the center of the season itself, from mid-June to mid-August.

At the beginning of the year, several thematic online conferences were held where various reports and predictions related to nautical tourism in the post-Covid period were discussed. At the International Breakfast Meeting 2021, a virtual conference organized by Boot Dusseldorf and the European Boating Industy, the reports of the European Commission’s research on travel and tourism trends in the ‘post-corona world’ were also presented. It was concluded that recreational navigation will certainly play a key role in rebuilding the tourism economy, but also in the light of the agreement on the European Green Deal and the forthcoming Sustainable Blue Economy Strategy, the opportunity for political decisions will be used to ensure improved environmental protection and cleanliness of marine areas. It is certainly necessary to harmonize regulations by individual countries, and the nautical industry will have to adapt to increasingly stringent environmental standards.

In addition to such conclusions, the results of a survey on the opinion of the tourists from European Union were presented. According to them, almost half of the tourists who are planning this year’s vacation, plan their trip during July and August. Almost a third plan a vacation by the sea, and about 13.2% of tourists plan to sail. Such results or intentions of tourists are mostly conditioned by changes in behavior in the Covid 19 crisis. The effectiveness of crisis management in individual countries and trust are key factors in choosing a destination. The flexibility of canceling arrangements, as well as health and safety protocols when crossing borders and staying, are certainly high on the list of priorities.

From the position of charter agencies, focusing on the center of the season is not the happiest solution. Most charter agencies are planning the periodic procurement of new vessels in order to maintain a high level of customer service. The purchase of yachts is most often financed through leasing, which means that there is a significant financial burden on shipowners. Often, annual repayment installments are the biggest expense in the operation of agencies, and it is impossible to reimburse it if the boat is rented for only 10-12 weeks. In order to survive, the agencies will be forced to reduce they own fleet, means to sell ships and even under unfavorable conditions. The Association of Charter Agencies estimates that by the beginning of the nautical season 2021, the number of vessels has already decreased by about 10% compared to the number of vessels in the charter in the 2020 season, and some agencies have closed their offices. On the other hand, there is an opportunity for potential private boat owners to get their own boat on much more favorable terms. Most brokers for the trade of used vessels record an increase in demand, and an increase in sales of used vessels, not just from charters. Likewise, most yachts manufacturers are recording an increase in sales of new boats to private owners.

In addition to these scanty numbers and predictions based on them, it is worth noting the general change in human behavior, caused by uncertainty during the pandemic, following of new information and changes on a daily basis, closing of restaurants, shops, schools and cultural institutions … New various conspiracy theories emerged, especially when looking at news from Northern Italy with countless deaths. People have started to divide into those who think that governments and journalists are lying and exaggerating the danger of the virus, and those who think that governments are lying because they hide real numbers and that the reality is much worse … yet, on the other hand, people in isolation they began to think about the transience of the material values, about the futility of the race for earnings through a 16-hour workday. We turned back to families and learned to appreciate free time and moments spent in nature and freedom with loved ones. Is there anything better than sailing by boat and surrendering to the sea and natural forces? It doesn’t matter if the boat is smaller or bigger, is it rented or your own.

Did we need Covid to slow down, and make better use of our time? Will we still be able to find a new balance after Covid? I believe that we will, and that nautical activity will get a new wind in the sails even after Covid.

Boris Miškić | GMBA,Croatia
Email: boris.miskic@gmba.blue
Mob +385 91 1264 461

Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA