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Building up charters in the Balearics
Camper & Nicholsons
28th January 2020

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Building up charters in the Balearics

It’s known for its year-round sunshine, enviable beaches and historic scenery, but when it comes to yacht charters, it seems the Balearics is currently not cutting it. According to the Spanish Large Yacht Association’s (AEGY) sixth annual report, the number of yachts registered for charter in the Balearics has dropped from 155 to 134. That’s a whopping 14% less than in 2018. And it’s not just motor yachts, either. These decreased by 7%, but even sailboats – whose activity is usually bolstered by the popular sailing regattas and fair winds that sweep the nautical destination – decreased by 35%.

In 2013, the AEGY was instrumental in convincing the Spanish government to make changes to tax legislation which had previously made chartering in Spain prohibitively expensive and complicated. Since these changes the AEGY has been monitoring the growth in the charter market and analysing the specific economic impact on the Balearics.

The reports show that up to 2017 the number of yachts over 20m registered to charter steadily grew, but 2019 marks the second year in a row in which that number has dropped. This drop is despite the fact the total number of charter days actually increased in 2019, both in high season (July and August) and in low season (June and September) from 2,914 days to 3,226 days. So, why the downturn?

Anne Sterringa, Senior Charter Broker for Camper and Nicholsons and a member of the AEGY Board, suggests that the decrease is partly due to the VAT rate in Spain being much higher than other EU countries, as well as other local bureaucratic procedures. If that assumption is correct, then 2019’s successful unification of procedures hopefully signals a more streamlined process for 2020. In conjunction with the amended tax legislation, not to mention the EU’s directive to change the flat rated reduced VAT that is currently applied in France, Italy, Greece, Malta and Cyprus, the hope is that the changes will entice more charter yachts to visit the alluring archipelago in the coming years.
“At the moment there are about 700 yachts over 24m available for charter in the Western Mediterranean,” explains Sterringa. “In 2014, when the law changed, we expected to have a
fleet of about 100 yachts registered for charter in Spain. We are delighted that we currently
have 134 on the register.”

It’s important to also note that of the 134 yachts on the register, 34 are over 45m in length, while in 2013 there were none. And 51 boats are over 35m in length, compared to just five in 2013. And for owners who choose to locate their yacht in the islands the results have been positive, with total charter income even growing by 7%, and leading to a positive financial knock-on effect on the local economy, too.

Likewise, the Balearic charter season is not limited to the summer months. An optimal year-round climate has historically seen yachts choosing to spend the winter months in and around the islands. This is further enabled and supported by an excellent infrastructure of yards and suppliers in the area providing first class repair and refit services. However, simply because a vessel is registered for charter in the Balearics, there is no guarantee that it has or will spend the season there. But, the AEGY remains hopeful that an upturn is on the horizon. If the matriculation tax on large yachts and recreational vessels (that does not exist in any
European country) can be eliminated, then Mallorca and Spain stand a far better chance of once again becoming a top charter yachts destination.

“We have seen a lot of growth since 2013, however we are not complacent and want to build on our success,” says Diego Colon, President of the AEGY. “Yacht chartering creates jobs and boosts the economy year-round. We are continuing to promote the sector, charter destination and refit of excellence, and we are also lobbying the government and the European Commission to eliminate the Matriculation Tax.”