Yacht charters are often highly vulnerable to seasonality, due to the fact that a lot of high-net-worth-individuals or families charter yachts for summer and spring vacations while the weather conditions are optimal. Pure operators, marinas and manufacturers are less affected since they either operate on an ongoing asset management or one-time purchasing model. A lot of yacht charter marketers and sales professionals complain about the pressure this kind of seasonality puts on their business and their time (“If we don’t generate enough business in our booking season we are in trouble!”). Let’s look at some ways how we can reduce the impact of seasonality by being smart marketers.

seasonality in yachting

Identifying The Reasons For Seasonality

 

Strong seasonality in yacht chartering can have a lot of reasons. A lot of them are connected to geography, resources, and weather. But you cannot control what you don’t understand. Hence it is important to identify factors that you can plan for or change yourself. Some examples might be:

  1. A short summer or spring season due to long winters and autumns
  2. Traditional business structures that affect sales (important business events and trade shows)
  3. A team that is used to being highly productive for only certain months of the year
  4. Local tourist high – season (being over-reliant on synergy effects with other local businesses)
  5. A lack of lead generation and promotion efforts throughout the year (lack of consistency)
  6. Access to local yacht owners, marinas and crew-members

seasonality in yachting

Creating VS Reacting (Demand Generation)

 

Let’s focus a bit on the points 3 and 5 since these are the areas where you as a marketer or business owner can actually influence your situation to mitigate seasonality.

By changing your mindset from a re-active one (waiting for phone calls and email requests, cold calling, cold emailing, buying data, relying on synergy from DMCs, affiliates or local luxury travel companies like hotels) you should immediately switch to a pro-active attitude.

What does it mean to be pro-active? It means thinking about demand generation, which can be split into two different styles of marketing for yacht charters: brand marketing and direct marketing. While brand marketing focuses more on doing ongoing long-term activities that create awareness for your charter company in your region or worldwide in the right social circles (social media, trade shows, public relations, events, SEO and blogging for example), direct marketing is all about leveraging existing awareness and converting cold web traffic (affluent people who have never heard about you but are willing to visit your website) into solid warm leads and charter bookings with specialized campaigns (funnels, analytics, email, automation, lead magnet content, paid ads).

By choosing a pro-active approach you can put your resources to optimal use by investing actively in brand and/or direct marketing all year long and more importantly, you can promote a mindset shift in your team that business development is a year-long activity, even in off-season!

If you do this successfully, the overall amount of bookings for the current and next year should eventually exceed your current booking capacity that your charter company can support. Once you hit that point it is time to tackle problem number 6. By going into growth mode, due to better revenue forecasting and more demand, you can start to acquire more and more assets – crew members and yachts – or even raise your prices. No more passing on deals or creating a wait-list. Being pro-active about demand generation can, after being consistent with it for a year or two, completely shift the scale of the business and transform it into a high-growth venture.

Mapping Out Your Year

 

Let’s map out a simplified whole year for a small charter company. Let’s assume that your booking season is from September till February, with two major trade shows in Q1 and Q3 that will generate a lot of business. You are now in September so you can plan your efforts for the whole year until next September with a budget of at $100,000 USD for marketing and promotion. Your hypothetical booking capacity is around 10 bookings per month from March till August (60 bookings overall to hit full capacity and at least $1,000,000+ USD in revenue).

We will assume that you have spent some time at the end of August or the beginning of September to create a solid strategy first (including personas etc.). Let’s then first select the split of brand vs direct marketing. Due to the long-term nature of brand marketing and the fact that you need to generate leads no matter what, even if it is a bit more expensive, let’s opt for a split of:

50% brand marketing

50% direct marketing

In the next step, let’s chose some respective initiatives and assign some budgets (we are not looking for best of class luxury brand marketing quality here, but rather a mix of internal and external resources to achieve a reasonable level of quality).

Brand Marketing (internal team):

Social media – $12,000 USD (content creation, management, paid social to grow the following)

SEO/Blogging – $12,000 USD (writing and publishing at least 4 high-quality blogs per month)

Trade Show in Q1 & Q2 – $26,000 USD (attendance, booth, swag, generating meetings in advance, follow up emails)

Direct Marketing (external team):

Building an online funnel – $20,000 USD (landing pages, rich-media, email, and marketing automation)

Buying targeted media to drive traffic – $30,000 USD (display, email blasts, advertorials, programmatic/mobile etc.)

 

Now that we know the split, the tactics and the budget allocation, let’s map out the whole year.

September (generated 30 leads, closed 10 bookings):

Social Media – $1,000 USD

SEO/Blogging – $1,000 USD

Designing and building the funnel – $6,600 USD

Trade show – $13,000 USD

October (generated 10 leads, closed 4 bookings): 

Social Media – $1,000 USD

SEO/Blogging – $1,000 USD

Designing and building the funnel – $6,600 USD

November (generated 20 leads, closed 7 bookings):

Social Media – $1,000 USD

SEO/Blogging – $1,000 USD

Designing and building the funnel – $6,600 USD

December (generated 10 leads, closed 4 bookings):

Social Media – $1,000 USD

SEO/Blogging – $1,000 USD

January (generated 50 leads, closed 20 bookings):

Social Media – $1,000 USD

SEO/Blogging – $1,000 USD

Running traffic through your funnel – $15,000 USD

Trade Show 02 – $13,000 USD

February (generated 50 leads, closed 15 bookings):

Social Media – $1,000 USD

SEO/Blogging – $1,000 USD

Running traffic through your funnel – $15,000 USD

seasonality in yachting

The Result of Smart Planning

 

With moderate estimates in regards to the closing abilities of your brokers (roughly 1 out of 3, or a 30-40% closing rate) you should have reached full booking capacity for the coming season. Now you could sit tight and enjoy the fruits of your labor but instead, you should do the following:

  • Make sure that you deliver a high-end yachting experience to your customers (of course).
  • Keep SEO/Blogging and social media going for the whole booking season to generate more awareness.
  • Assuming that your overall revenue generated in those 6 booking months is $1,000,000+ USD, you should after subtracting the costs of marketing, payroll (including your own salary), business expenses and taxes still have a solid $150,000 – 250,000 USD in pure profit available. It’s time to reinvest!
  • Now you can add $50,000 USD for the new year into your marketing budget, raising it to $150,000 USD
  • You can also spend easily another $50,000 USD on acquiring new assets (crew, yacht owners etc.)
  • The remaining $50,000 – 150,000 USD can be used to hire more brokers, professionalize your operations or take out some profits.

That is just a small example with made-up numbers. But the concepts can be applied on any business maturity level. If you rinse and repeat this process for a couple of years you will have scaled in no time from a small, local yacht charter company to a multi-national household luxury yachting brand that is perceived as best of the best when it comes to service quality and the countries you are active in. All it takes is some smart planning (and of course the right marketing partners for direct marketing).

Do you want us to build a custom luxury marketing funnel for your yachting business? Then request a strategy quote from us.

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