BY DAVID GUILFORD
specialreport
Fractional Ownership Gives You
A Piece Of The Action
The number of fractional boat companies around the country is growing rapidly.
How does it work and could it be right for you?
e’ve all been there. You duck
out of work a few hours early
with visions of playing hooky on
the water while everyone else
is toiling away. But when you get to your
boat, you spend your afternoon cleaning
and maintaining, getting fuel, and doing
holding-tank duty. Imagine showing up
at the dock to find your boat sparkling
clean, fueled up, and ready to go. Picture
an attendant handing you your gear, and
casting off your dock lines as you pull out
of the slip. The fantasy life of a rich skipper? Hardly. This scene is a reality for the
growing number of new American boaters
who’ve discovered the benefits of fractional
boat ownership.
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What Is Fractional Ownership?
In a nutshell, fractional boat companies split a boat into equal shares, then
lease the shares to members. Members have
guaranteed access to the boat a set number
of times per month on a scheduled basis,
and an unlimited number of times per
month on an as-available basis. The fractional boating base handles all the logistics,
including slip fees, boat maintenance and
repairs, and insurance, and the member
pays a fixed monthly membership fee for
the use of the boat. The member uses the
Internet to schedule the desired time slot
to use the boat, or to check the immediate
availability of the boat if the member has
time to use the boat that day. By limiting
the number of members, the base is able to
both guarantee availability and to complete
any and all necessary maintenance on the
boat. That way, the boat is always ready
when the member is.
Fractional ownership is available for
sailors and powerboaters, and the number
of fractional bases around the United States
is growing each year. Fractional ownership
is quickly overtaking boat rental as the
preferred means of boating without owning. George Bonelli, president and CEO of
SailTime, explains, “We have seen a definite shift in interest in this type of program
as consumers move to the experience-based lifestyle from the ownership lifestyle.
People want to gather experiences and not
own stuff. The ‘simplifier’ is and will be a
growing segment of the market.”
How Popular Is Fractional
Ownership Becoming?
The largest fractional boating company
in the United States is the Freedom Boat
Club. Specializing in powerboats, the club
boasts a fleet of 400-plus boats, 5,000
members, and over 50 bases nationwide.
Their fleet ranges in size from 16-foot skiffs
to 40-foot motoryachts. Founded in 1989
in Sarasota, Florida, the FBC is also the oldest fractional yachting company in the U.S.
SailTime, considered the gold standard in
fractional ownership for sailors, has gone
global. In addition to their 30 bases in the
U.S., they have 15 bases in the U.K., three in
Holland, and one in Australia. The company
has more than 1,100 members and 160
boats in the water worldwide.
In addition to these market leaders,
there are dozens of smaller fractional companies around the country. Signaling the permanence of this sector of the market, major
boat manufacturers such as Hunter, Back
Cove, Catalina, and Beneteau have signed
agreements with fractional yachting companies to represent their models exclusively.
How Does It Work?
When a prospective member joins a
fractional boating base, the first step is to
pay the initiation fee. This varies from company to company, and from boat model to
boat model, but is generally anywhere from
$2,500 to $6,000. Next, new members are
trained by the base. The base provides a
thorough combination of classwork and
practice on the water, over a period ranging from one day to two weeks. Members
are checked out on each boat model their
membership entitles them to use, and are
also trained how to use the company’s
Internet scheduling interface. The only
commitment from that point forward is
the monthly membership fee, which varies
by company and boat model but averages
$300 to $500 per month. All expenses
except fuel are included in the monthly
membership fee. While it’s not unheard
of for a fractional yachting base to require
a long-term commitment, the industry
norm is to keep things on a month-to-month basis. If a member is dissatisfied or
has a change in plans, companies usually
only require 30 days notice to terminate
a membership. Some fractional boating
companies offer a guaranteed minimum
number of time slots per month per member; others offer a rolling minimum. Mike
Reynolds, president of the franchising arm
of the Freedom Boat Club, says rolling time
slots work best for their members. “You get
four revolving reservations that you can
put on the books at any time. For example,
you can have four reservations — Monday,
Tuesday, Wednesday, Thursday — and as
soon as you use Monday, you’re free to put
that reservation back in the system.”
In addition to scheduled time, members are allowed to use the boats “on the
fly,” any time the boats are available and
not reserved by another member. So, if
that afternoon meeting gets canceled and
a member suddenly has the rest of the day
off, he can actually spend the time on the
water. Most companies also offer reciprocal
membership benefits at their other company bases. So a Freedom Boat Club member from Texas can use a Freedom Boat
Club boat while on vacation in Florida, as
long as the boat is available. In the case
of SailTime, it opens a world of sailing
opportunities and options when it comes
to planning vacation or business travel; the
company just opened bases in La Spezia,
Italy, and Nice, France.
