The charter potential of power catamarans
by Neven Grubisic Yacht-Rent 2 Sep 2023 23:04 PDT
Leopard 40 Powercat © Leopard Catamarans
Consumer interest is growing in this accelerating market, but supply is not quite there yet... If you analyse it, what does it look like? Here are three models put under the microscope. Which pays its way best?
In recent seasons, catamarans have become popular in the world of charter. A catamaran is a vessel that rests on two hulls, providing it with higher stability at sea compared to a single-hull vessel. This alone gives more space in the vessel and therefore a more comfortable multi-day stay for guests. Because of this, catamarans have become a target of interest amongst a wider circle of people, even those who are not sea-savvy and find it hard to cope with slightly rough sea conditions.
However, the circle of interest does not end there, because although most catamarans on offer for rental are those that have sails, there are also catamarans powered only by engines, the so-called power catamarans. Power catamarans are suitable for sailors who have little or no experience with sails. They offer all the advantages that motor yachts give, such as the drive of powerful engines and greater speed, and yet they provide the spaciousness and comfort of multi-hulls.
From conversations with representatives of charter companies, it has been confirmed that the interest in renting power catamarans has grown significantly, but the offer of power catamarans itself is not high. One of the reasons is that one catamaran takes up as much space in a marina as two single-hull sailboats or motorboats, so the price of the annual berth in the marina is higher. For a charter company to invest in a power catamaran, it must provide more funds than would be the case for a single-hull sailboat or motorboat. This is another reason for the lack of catamaran supply in the charter market, although a large investment wouldn’t be a problem if there wasn’t any fear about the return on the investment.
In the following text, we will try to analyse the risk of investing in a rental catamaran based on the collected statistical data. In doing so, we will focus on exclusively motor catamarans (power catamarans) whose purchase price is higher than that of sailing catamarans. We need to keep in mind that one of the biggest items when buying a motor vessel is the price of a powerful engine. In the analysis, we will not go into the accompanying costs that occur during the charter season, such as insurance and year-round mooring in the marina. Neither will we go into the relationship between the investor and the charter manager, or the mutual distribution of profits. This is a topic for a separate analysis and would require an article of its own.
The data we used in the analysis was collected from the yacht rental portal Yacht-Rent.com, where statistical graphs have been created based on a central booking system that gathers details from around 10,000 charter boats from all over the world. We have singled out several models of power catamarans and we will compare the data on prices and reservation occupancy by the countries where these models are offered for rent. Given that these models are rare in the offer of charter vessels, we had to focus on the two countries with the largest charter fleet in the world: Croatia with about 45% and Greece with about 27% of all charter vessels for which we have collected data. Both are in the Mediterranean, so this information already says a lot about which charter destination could be the most favourable for investment in a vessel. The models we singled out are Bali 4.3 MY, Fountaine-Pajot MY 44 and Nautitech 47 Power.
From the following graphs, interested parties can read which model of power catamaran would be the best choice to invest in for boat rental in each destination. The data for the graphs was collected on August 15, 2023. when the occupancy of boats for rent in the Mediterranean is more or less known until the end of the season, given that all reservations are made in advance, and there is little probability of an increase in the number of reservations at the last minute. Even if some reservations happen after this date, this should not change the situation greatly, considering that we are dealing with the average values of the collected data, both for occupancy and for the average rental prices achieved.
Bali 4.3 MY
The Bali 4.3 MY power catamaran model is a vessel with a length of 12.93m (43ft), a width of 7.12m (23.5ft), and a draft of about 1m (3ft). The following graph shows the comparative trend of rental prices for a power catamaran during the whole season for a week in Croatia and in Greece.
The graph shows that this model is somewhat more acceptable in Croatia during the off-season than it is in Greece. Off-season it can be rented for €5,298 in Croatia and for €8,050 in Greece for a week. In the peak season, the price roughly equalises in both destinations. In Croatia it is €16,395 and in Greece, €16,503. A more precise calculation according to each value on the graph gives the average price of that model throughout the whole year. It turns out that the average price in Croatia is €8,534, while in Greece it is slightly higher and amounts to €10,509 for a week's rent. By further calculation, we arrive at the average rental price of this model everywhere in the world, which then amounts to €9,037 for a week.
The Bali 4.3 MY catamaran model comes in versions with different numbers of cabins, and each version can accommodate a different maximum number of guests. With that in mind, it is useful to analyse what the rental price would be per person if the vessel always had the maximum number of guests on board. Our calculation of average prices includes models with 3 to 6 cabins and 8 to 12 berths. The graph below shows the exact movement of the rental price of this model, but per person, not for the entire vessel.
In this case, it follows that the prices per person in the off-season are quite similar. In Croatia, it is €611 and in Greece, it is €671 per person for a week. However, in the peak season, Croatia leads the way with a price of €1,844 per person, while at the same time in Greece, the price is €1,375 per person for the week. When the average price per person throughout the year is calculated, it turns out that Croatia is somewhat more expensive with an average price of €966 per person per week, in contrast to Greece, where this model of catamaran costs an average of €876 per person per week. If the average price were recalculated regardless of the destination, it would be found that the rental of the Bali 4.3 MY model is €1,008 per person for a week.
Now let's look at the data on the average occupancy of this model with rental reservations. According to data from Greece, the average occupancy of this model is only 5 weeks per year, which is quite low compared to Croatia, where the average occupancy of the Bali 4.3 MY model is as much as 13 weeks per year. It should be kept in mind that this type of occupancy is not bad for a motor vessel, because usually, sailboats have a higher occupancy (over 20 weeks a year). The reason for this is that sailing enthusiasts also rent them in the off-season for sailing, while motor vessels are almost always rented in the season for cruising. and swimming in the sea. If we now calculate the occupancy of the Bali 4.3 MY model regardless of destination, we arrive at an average of about 11 weeks of rental per year.
To see if an occupancy of 11 weeks per year is enough to get a return on the investment within a reasonable period, we must first look at how much of an investment we are talking about. According to the price list of the Bali catamaran dealer (the price of a new vessel Bali 4.3 MY), it follows that the basic price of the Bali 4.3 MY model is €795,704 without VAT. Given that the rental prices that we have shown include VAT, we would also have to show the purchase price of a new boat with VAT. If we add to that price, the cost of optional equipment, which is necessary when chartering a vessel, we have already exceeded the amount of €1,000,000. However, with perhaps some discount from the seller, we can keep that price as the purchase price for this model.
According to previous calculations, the Bali 4.3 MY model is charted for an average of 11 weeks at an average price of €9,037 per week, which brings in €99,407 per year. If that amount were pure profit, then the investment could be fully returned in 10 years, but we know that we have to pay for annual maintenance, annual mooring in the marina, boat insurance, charter manager compensation, and booking agency commission. In addition, the rental price also decreases depending on the age of the vessel. All this prolongs the investment return period, so it is very difficult to predict a realistic investment return plan.
As we stated at the beginning of this article, we will not go into the details of investment management but only compare models and rental destinations. This means that investment in Croatia is recouped in 9 years, because the average rental price is €8,534, and the average number of rental weeks is 13, so it results in an income of €110,942 per year. In Greece, the average weekly rental price is €10,509, but the average rental weeks per year is only 5, which brings in an annual income of €52,545. This means an expected return on investment in 19 years.
It turns out that for the Bali 4.3 MY model it would be more profitable to choose Croatia as a charter destination than Greece, but again, for the final decision, all the details should be analysed because so far we have been guided only by statistics, which can be interpreted in different ways.
Fountaine-Pajot MY 44
This catamaran is 13.4m (44ft) long, 6.61m (21.7ft) wide and has a draft of 1.3m (4.3ft). The graph below shows that the price trend throughout the seasons in Croatia and Greece is similar, but this model is slightly more expensive in Greece. However, this does not necessarily mean that the price in Greece is generally higher, but it could be that the average price includes models that are newer and thus command a higher price.
From the graph above, it can be seen that the average off-season price in Croatia is €5,390, and in Greece, it is slightly higher at €6,570 per week. In the high season, the price difference is even greater, as it is €10,386 in Greece, and €8,076 in Croatia. When we recalculate the data on this model, regardless of the destination from which it is rented, we arrive at an average weekly price of €9,231.
Given that this model also comes in several variants with different numbers of cabins and berths, it is a good idea to see what the weekly price per person looks like if the maximum number of people is on board. The most common charter version of this model is the one with 4 cabins and one or two extra berths in the salon. Here, the average price per person in both destinations seems similar and differs by around 10%. Further calculation shows that the global average weekly price of this model per person is €1,226 as can be seen in the graph below.
The collected data on the occupancy of reservations tells us that the Fountaine-Pajot 44 MY model achieves 16 weeks of rental per year in Croatia, and the same model achieves 14 weeks per year on average in Greece. Considering that when renting this model, the statistics do not show a big difference in the destination from which it is rented, we can say that in this case, the annual profit is €138,465, which we get if we multiply the average 15-week rental per year by the average weekly rental price of €9,231.
Given that this model is no longer produced but was succeeded by the newer model MY 4.S, it is difficult to say with certainty how much this investment would cost, but several sources from that era state that the price of the new model would be around €1,350,000. A simple calculation shows that with the previously calculated annual profit, this investment would be fully paid off in 9-10 years, but again, other costs that extend that period of profitability should also be taken into account.
The entire calculation almost coincides with the previously analysed Bali 4.3 MY model for charter in Croatia, so perhaps the lower profitability of the Bali 4.3 MY model in Greece can be attributed to a statistical error.
Nautitech 47 Power
We will also cover this power catamaran model of a similar length to the previous two to get a more thorough insight into renting vessels of this type. The Nautitech 47 Power model is a vessel with a length of 14.23m (46.68ft), a width of 7.54m (24.9ft) and a draft of 1.20m (3.93ft). This charter model in Greece is slightly more expensive than in Croatia. As the graph below shows, the average weekly price in Greece ranges from €5,440 to €14,250, which then gives us an average price throughout the year of €8,552.
In Croatia, this model is slightly cheaper to rent, so even the price jump in the peak season does not affect the annual average. The price in the off-season is €2,160, and in the peak season, it goes up to €18,445. However, according to further calculations, it turns out that the average weekly rental price throughout the year is €6,056, which is much cheaper than in Greece. From the calculation of the average price regardless of the destination, it follows that the weekly rental price of this model would be €7,304 on a global level.
If we look at the average weekly prices per person on the next graph, the situation doesn't change significantly compared to the previous graph where the prices per vessel are shown. In such a case, it seems that the average price includes models that have an almost identical number of cabins and the maximum number of persons allowed on the vessel. Most often in the charter, this model appears with 4 main and 2 auxiliary cabins and the maximum number of people on board is 8+2. The graph with prices per person also shows that this model is slightly more expensive in Greece than in Croatia, and in general it turns out that the average weekly rental price of this model is €641.
According to the collected data, there is a significant difference in the number of booked weeks between vessels of this model chartered in Croatia and chartered in Greece. In Croatia, the average is 20 weeks, but in Greece, 13 weeks, so the annual realised profit differs significantly. Based on the previously calculated average weekly rental price in Croatia, an annual profit of €121,120 is reached (20 weeks at €6,056). Although the average rental price is slightly higher at €8,552 in Greece, the same vessel has fewer booked weeks (13), so the annual profit is €111,176.
However, there is a relatively small difference in price, so it is easy to calculate the average annual occupancy of this model regardless of the destination and the expected average annual profit. Namely, if the average booking occupancy for this model is 16 weeks, and the average weekly rental price is €7,304, then the average annual profit is €116,864.
According to the price list of one of the representatives for the sale of this model in Europe, the purchase price of a new vessel equipped for charter would be around €850,000 (the price of the new N47 Power), so from a simple calculation it follows that in the case of an investment in this catamaran model, the return of the invested funds would be was only 7.5 years, which is the fastest return of all three models that have been analysed.
It is worth noting again that with every investment there are additional business costs that are not the subject of this analysis, but can significantly extend the investment return. It is also important to note that the figures in this article are derived from statistical data for the 2023 season, which, depending on the observed pattern or statistical error, may in some cases give a wrong impression.