Term Charters

What to Consider Before Operating a Term Charter Boat

Post by
Michael Rouveure

August 2, 2021

What to Consider Before Operating a Term Charter Boat

You bought a boat so you could enjoy life out on the open water. But if you’re not planning on living on it full time, you may be considering trying to offset the cost of the boat. Term charters are a great way to have your boat and enjoy it too! If you’re looking to turn your boat into a business, there are a few things you need to consider.


Location: Choosing your Charter Home Base

Do you want to stay in one place, or would you rather move around? These are important considerations that will impact how you do business. Having a home base will make it easier to market your charter and maintain your boat. Of course, it’s a personal preference but it’s nice if you can be in a destination where you speak the language. You’ll want to be sure to evaluate the seasons in this destination and find a spot to haul out during hurricane season.


Connections: The Moving Parts of the Boat Charter System

Depending on where you choose to settle down, you’ll want to immediately start connecting with people in the industry. These are the people and organizations that can lead you to massive success. You’ll want to spend a good amount of time maintaining relationships with these stakeholders to ensure your charter gets booked up.

  • Term Charter Management Company: Manages term charter on yachts on behalf of owners. These services typically include crew management, maintenance, marketing, sales/broker management, administration, moorings and yacht finances.
  • Term Charter Broker: The middleman between all parties. They typically advertise directly to the public and provide customer-and booking services. They manage charter bookings, charter contracts, coordinate clearing house payments and guest feedback.
  • Clearing House/Central Agent/CA: Every private crewed charter yacht must have a CA. Term Charter Brokers deal with clients, your CA deals with the brokers. The main duties of the Clearing Houses are to handle yachts' availability and calendars, escrow client funds and manage the yachts' online brochure.

Your Crew: Your Charter Team is Your Biggest Asset

Who is going to be running the charter? What does your captain bring to the table beyond their navigating skills? Do they have both hospitality and sailing skills? Do they share your core values? The secret to a successful charter is having a crew that knows how to entertain and keep your boat & guests safe. Don’t expect people to come in with all the skillsets you’re looking for – some training will likely be required.


Pricing: Finding the Competitive Sweet Spot

Pricing is complex and will depend on a lot of different factors: boat size & age, your crew’s reputation, the time of year, location, availability in the marketplace, and your ability to market and position your charter. Weekly term charter rates range from $10k-45k per week. Tip is usually not included, and most guests will venmo or paypal the crew.


Marketing: Standing Out in a Crowded Market

Today guests want to be able to experience the boat before stepping onto it. This requires offering 360-degree virtual tours, guided yacht walkthroughs, crew interviews, and more content that you can showcase on your website and social media. Another major way charters get marketing exposure today is at boat shows. This will get you in front of boat lovers and brokers alike that could lead to bookings.


Reservation Management: Getting Paid For Your Charter

Contracts, payment, clearing houses… the process can get messy if it’s not streamlined. 

As a boat owner, the most common source of bookings will be your brokers. In this case, reservation handling will be a set procedure where your broker will pitch your term charter catamaran to their leads. When this happens, if a customer wishes to book, here is what to expect:

#1. The broker will send out a contract with all the charter terms to the guest and boat owner that also includes all the reservation information such as dates, rates, add-ons, meal plans, pre-paid activities such as scuba diving along with any specific custom requirements.

#2. Upon signature by all parties, the guest will then pay a deposit or full amount depending how far in advance the reservation is to the charter start date.

Wires, ACH, and credit cards are the most common ways for guests to pay for their trip. However, preference is given to wires and ACH payments because it’s an extra layer of protection for the brokers since guests are not able to process any chargebacks. The downfall to these payment methods is that the conversion won’t be as good as using credit card payments, which are way easier and faster for guests to use.

#3. Once a guest has made the charter payment, the broker notifies the clearing house so that they may block the charter dates in the boat’s availability calendar that’s visible to all brokers. The broker will also send all funds minus their commission (often 15% of total charter amount) to the clearing house to hold in escrow. 

#4. As we get closer to the charter date and the charter begins, the clearing house follows a predetermined payout schedule to send funds to the boat owners a few days before the charter and also on the day the charter starts. The clearing house will also take a commission that ranges anywhere from 2% to 5% of the total charter amount.

As a boat owner, expect to pay up to 20% commission overall to all parties handling the reservation for you.

At Junglebee, we’ve been building software to help term charter boat owners automate and simplify reservation handling with automated contracts and making it easy for guests to book and pay for charters online. We’re combining the multiple steps of reservation handling into one simple process.


Running a term charter operation can be a full-time business, or it can be incredibly effortless depending on how involved you wish to be. Whether you’re eager to do it yourself or work with a management company, it can be a really fun way to travel, meet like minded people, and enjoy life out on the water. Stay tuned for more in-depth articles as we explore the world of term charter operations.

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