Uncle Sam's Boat Dream

Over the past 15 years a number of web based companies have launched with the aim of making charter more accessible to a wider market, offering anything from day boats to superyachts, previously the domain of the established brokerages. There’s also a growing trend for different ways to charter, encouraging more people to get out on the water at a price they can afford.  

One of the first online charter brokerages to launch 15 years ago was the American led startup boatbookings.com. The founder was Tom Virden who had previously worked at Apple, Netscape and lastminute.com, which gave him the idea to apply the same logic to boats and yachts. It was an early example of the power of tech to disrupt the status quo and the yachting establishment was not happy; feathers flew.

Resentment centred on the notion that this virtual startup was effectively pinching clients by appearing higher up in Google search results. They suffered a lot of bad press questioning their professionalism, their lack of a managed fleet and a Mayfair office, and access to industry tools was made difficult, if not impossible. They persisted, jumping through endless hoops to prove their worth, and they are still in business today.

Another early launch was Charterworld.com which focused more on larger luxury yachts. The brains here are a New Zealand couple, Reia Stannard who had previously worked as crew and her partner Matt Somerville-Smith, a qualified solicitor who had also studied internet and business development. Like boatbookings.com they leveraged an acute understanding of the internet and Google search paradigms and quickly rose to the top of the page. They encountered similar resistance among the establishment but their determined professionalism left no room for reproach. 

Eventually the door opened ajar, and office-bound brokerages began to review their own shop windows online. If you can’t beat them join them. The rest, as they say, is history, but I’ve long thought both companies deserved more credit for their vision and the trail they blazed. It wasn’t an easy ride; I know because I worked for both of them!

Over the past 10 years we’ve also seen a growth in boats as floating hotels selling cabins by the night, such as US based sleepafloat.com and bedsonboard.com in Europe. Both Airbnb.com and Booking.com have followed suit.

Image courtesy of FLOAT

We’ve also seen a surge in companies offering new ways to charter, for example Monaco based FLOAT, a new venture out of YachtHarbour.com offering day charters with a set itinerary priced per person. 212 Yachts based in Cannes offers a range of charter options but a popular choice is their fleet of Van Dutch available last minute, by the day or longer. Meanwhile boat4aday.com (as the name suggests) has been successful in the US and is currently developing its network in the Med. For owners and operators open to the idea this approach also provides a solution for gaps in the calendar. 

Another fast growing trend is peer-to-peer rentals since facilitators can grow a giant network of inventory very quickly. One such company is Florida based Boatsetter.com which has just acquired its largest rival, Boatbound.co, making it the largest of its kind in the US with boats in over 300 locations. The deal is reported to have run into the low millions, bringing the total investment in the startup to a staggering $17.75 million, indicating clear confidence in its potential.

Boatbound launched in 2013 ahead of Boatsetter, raising over $5 million from crowd funding platforms and the US boat manufacturer Brunswick. The company subsequently billed over $25 million in booking requests, again thanks largely to its ace technology and visibility online.

The Van Dutch 40 courtesy of 212 Yachts 

However, it also suffered controversy around safety and insurance and this is where Boatsetter has muscle. CEO Jackie Baumgarten had previously founded a peer-to-peer boating insurance company, Cruzin, which later merged with Boatsetter, allowing them to offer $1 million in liability cover, $2 million in damage cover, plus additional cover as required. Boatsetter rentals also require a qualified captain, the boat’s usual captain, the client themselves or a freelance.

According to Baumgarten, this focus on safety and insurance in combination with Boatbound’s digital capabilities underpins their goal to capture a hefty share of the estimated $50 billion boat rental market.

As for all new enterprise, the greatest challenge is building awareness, in this case overcoming the assumption that boating is unaffordable to many. Increasingly this involves telling stories around the experience, the novelty and the excitement of being out on the water, at a price you can afford. And of course  Airbnb hasn’t missed a trick to facilitate, allowing Boatsetter to partner with their ‘new experiences’ platform to offer a range of tasters from sailing lessons to onboard dining.

And just as Airbnb owns no properties, Boatsetter has not fleet of its own but, with 5,000 vetted boats on its books, the bar is set at 10,000 rentals this year. The company receives 28% of the rental fee from the vessel owner, 10% of the captain’s fee and a 7.5% booking fee from the client and by any standards these are healthy margins with no shortage of volume in the US alone.

Image courtesy of FLOAT

With a view to Europe, Baumgarten says the market is ripe for consolidation and, with a clear strategy of growth by acquisition, all eyes must be on their counterparts, among them ClickandBoat.com. Another US startup with similar thinking and access to (smaller but significant) funds is the berth booking website Dockwa.com which acquired marinas.com earlier this year. For now they are also focusing their effort Stateside but one wonders for how long.

One thing is clear. There is no less talent in Europe but due to a wide range of languages and cultural differences between neighbouring countries (and nationalities within them), markets are less uniform. What is harder to understand is why local companies themselves are less inclined towards partnership for growth. We are strangely parochial in our business thinking and sometimes fail to see the bigger picture, which is all good news for our American friends, watching and waiting and less afraid of the numbers (or the status quo) when the time is right.