Renting boats can be expensive, but we have some tips to help you minimize your costs and maximize your value. Here is an overview of the boat rental businesses we work with, the challenges they commonly face, and how to implement solutions to drive down costs.
Not every boat rental business is the same, so the challenges vary across the industry.
Common boat rentals are for fishing charters, which allow customers who aren’t boating owners to go out and fish in the open sea. While dock, shoreline, and kayak fishing are fun, getting out into the sea is a little more thrilling. However, it has its risks.
Fishing charter companies tend to charge customers around $500 - $1000 per person for a half-day or full-day on the water. Profits can be extremely high, but startup and maintenance costs can also be high. Just docking boats and licensing will be expensive, so investing in tools to minimize costs is important.
Yacht charter businesses operate more on a luxury level. These businesses tend to operate in exotic locations, and frequent customers may be considered the “rich and famous.” In this niche business, costs can become exorbitant.
A 180-foot superyacht costs at least $4.75 million per year to operate. Then calculate around $1 million for maintenance and repairs, $350,000 to dock, insurance costs, fuel costs, and so on. Customers also tend to be a little needier regarding onboard luxury, so you may have higher upfront costs at the beginning of a charter.
The other side of the coin is that the profits from running a luxury yacht charter business can be through the roof. Just be sure to budget accordingly and invest in the right tools to keep assets secure.
Bareboat charters involve renting boats to customers without a skipper on board. That means there are a lot of risks involved in terms of boat security and safety. This boating business is heavily regulated, and vessels must be well maintained. Bareboat charter companies need to vet the hirer well and have them sign a statement indicating that they fully understand the operating limits and any conditions placed on the boat.
For bareboat charters, security cameras and geofencing can be excellent tools to manage fleets. Artificial intelligence can also help with record-keeping for insurance and compliance. When hiring out a boat, it is also imperative that the hirer is aware of the correct and safe handling and navigation of the boat, and telematics can assist with maintaining real-time communication with a fleet manager while out to sea.
Of course, for marina managers, other watercraft rentals are also important!
Marinas host all sorts of water sports and small watercraft rental services. These can be especially challenging for marina managers to keep an eye on since they are usually rented by individuals, and monitoring location can be difficult. GPS devices and geofencing can be a great solution for managing smaller marina rentals.
While boat rental and charter businesses are lucrative endeavors, there are some challenges to the industry.
These days, it seems like everyone wants to be out on the water, and the boat rental business industry is growing continuously. The boat rental market is slated to reach a value of $19.7 billion by 2030. This is great news for those in the market, but it means that competition is high, and marketing is critical to staying in the game.
Investing in fleet-tracking and marina management systems can be what puts your business in a leading position in the market. Reduced insurance costs due to impeccable security measures can be passed on to customers, and you’ll be able to track all vessels associated with your business.
Boat rental insurance is another challenge because it is extremely complicated. Insurance can be required for the rentee and the renter. But what the insurance covers isn’t always cut and dry. The average cost of a boat insurance policy is generally $200 to $500 a year.
Remote boat monitoring can help qualify for a discount on this amount! Insurance companies are now offering better prices to the owners whose boats can be remotely monitored and even offer extra discounts for the boats that have alarms regarding high water and fire alarms.
If you’re a boater, you may have been in your slip more than usual due to the rising fuel costs. Whether your boat operates on diesel or gasoline, fuel prices are higher than ever, given the geopolitical situation and climate challenges. Reducing costs in other areas is a way to offset rising fuel costs.
Here’s a quick tip: fuel up at the gas station rather than in the marina. At a marina, fuel typically costs about $0.50 to $1.50 more per gallon than at a normal station. Thinking ahead and keeping extra fuel on board can save a lot of money in the long run.
While boating accidents are common, rental accidents are even more. People tend to let their guard down when operating vessels that don't belong to them. According to the American Boating Association, the United States Coast Guard reported 767 deaths, 3191 injuries, and 5265 boating accidents in 2020. The number of accidents was up by 26.3%, a trend that continues. Keeping close track of all of your company’s vessels is extremely important to minimize danger and ensure maritime safety.
Consider that annual maintenance for boats is roughly 10 percent of the cost of the boat itself. Storage costs can run up into the thousands as well, depending on where you are located. Consider that to run a boat rental business, you need to factor in taxes, insurance, boat registration, mooring, small boats or dinghies to get to the mooring, trailer costs, safety items, and navigation equipment. It all adds up fast. That isn’t to say that the business isn’t lucrative. But cost management is important for you to make a profit.
Here are some tips to help you minimize costs and gain the maximum profits from your boat rental business.
Ongoing safety training for all marina and boat rental employees must be included in your business plan. Free resources are available for you to ensure your team is up to date regarding safety on the water. Safety training courses for boat renters should also be recommended, especially if the renter is going to be on board for an extended period of time.
Keeping track of maritime vessels is no small feat. Prioritizing employee health and safety, awareness of local legislation, tracking and maintaining your fleet, and maintaining a stormwater management plan that minimizes pollution are all critical to the success of the marina property management organization.
Following some basic best practices for marina security will contribute to your boating rental business's success. Be sure that all marina workers have high-visibility clothing, that life jackets are available to everyone that mounts a vessel, that non-slip footwear is mandatory, and that helmets are available when needed.
Security measures can also be enhanced through the use of GPS asset tracking and camera surveillance. Automated geofencing solutions can mitigate the risks of handing expensive watercraft keys to renters. Geofencing ensures the safety of your watercraft’s passengers and can alert marina managers to unauthorized watercraft movement.
Maintaining a boat maintenance schedule is another way to minimize downtime and keep your watercraft active to maximize profits. Boat maintenance goes beyond just a visual review when sending the vessel out. Depending on whether your boat operates in salt or freshwater, you will need a maintenance schedule so you can keep renting regularly.
Boat maintenance includes over 60 standard operating procedures, and renters hardly have any idea of what needs to be checked when heading out on the water. That means that if you run a boat rental business, the onus to ensure boat security is on you. To keep costs down, be sure to develop and stick to a regular maintenance schedule, so you don’t find yourself shelling out money for surprise repairs.
Compliance is critical for boat rental businesses. Whether the renter is required to have a boating license to take a boat out depends on the jurisdiction your business operates in. Many sailing schools will suggest otherwise, but the truth is that boat rental and license regulations can be somewhat murky. Be sure to do your research if you are operating boat rentals of any type to be sure you are only renting to qualified renters.
Regarding permits and certifications for the vessel itself, be sure to check with your local authorities to ensure you have all that you need to legally rent your vessel out to a customer.
Make sure you are up to date with your watercraft rental insurance. Imagine an anchor slips and a boat runs aground. Increased violent climatic events mean boat rentals are even more vulnerable to unintended accidents, and you’ll want to be sure your insurance policies are up to date. You’ll also want to check what type of insurance you have. If your policy is "third party," the insurance will only pay for damage you may cause to another person. If you hit the pontoon at the fuel station, the damage to the pontoon will be covered by the insurance. But not the scratches on your hull.
Rastrac’s marina GPS monitoring and tracking solutions are perfect for any boat rental operation. Our advanced GV75 GPS tracking device for boat rentals, together with our remote monitoring system, can help you track maintenance intervals to be proactive on service appointments, automate reports on engine performance, schedule revisions based on dates and mileage, monitor battery levels, and optimize resale values for your watercraft.
Rastrac can help you streamline all aspects of boat ownership and rental equipment. We can help to eliminate mundane tasks related to boat monitoring to free your team to focus on building your business.
In our guide to GPS tracking for marinas, you’ll learn: