How Brexit will Impact 2019 Yacht Charters to the Mediterranean (and What You Can do About it Now)
The thoughts below are wholly those of Seamaster Yacht Charter and relate to recreational yacht charters in the Mediterranean.
We’ve had a bit of feedback from clients recently expressing uncertainty about how Brexit will affect yacht charters in the Mediterranean leading up to and after the 29th of March. We’re keeping a ‘watching brief’ on unfolding events but here’s some insight and steps you can take to mitigate any perceived risks and uncertainty.
Currency and the Cost of your Sailing Holiday Going up (or Down)
The Brexit process is creating significant uncertainty, which is adversely affecting the value of the pound (GBP). The health of the pound moving forward i.e. whether it goes up or down, depends on how events unfold, and this uncertainty may lead people to question how this will influence their holiday costs.
Yacht Charter Agents
For British yacht charter agents, the base currency of charter yachts is generally the euro. Charter agents typically convert the euro price to pounds and use this figure to sell to you. This is generally a periodic or ongoing calculation that is confirmed at the time of booking the holiday.
The benefit of booking from a UK charter agent in pounds is that you should lock in the cost of the holiday at the time of booking, so you’re not exposed to any currency risk. Confirm with your agent that this is the case. If you were to book with a European company in euros for example, you would risk the price increasing in GBP terms.
Up until the time you book and confirm the price, if the pound falls, then the cost of the yacht in GBP will increase. If the value of the pound increases, the cost of the yacht when you book will decrease.
UK charter companies that own or run their own fleets as tour operators are a little different, in that they typically set their prices the year before and are generally fixed, albeit they can be subject to discounting policies. The challenge for them is that the costs that they are incurring ‘on location’ may go up (due to the currency fluctuations) but they are unable to increase the price of their holidays.
We have seen in the past holiday companies charging a surcharge to the cost of the holiday after the client has booked, which is allowed for as long as it’s in their booking conditions. They must absorb the first two per cent of an increased cost, and the surcharge can be no more than 10 per cent. See below for more.
A holiday surcharge is an additional fee that a travel company may legally ask you to pay after you’ve booked with them because the cost of the package they sold you has increased. This may be because of currency fluctuations (a weakening pound), higher fuel costs, or increased taxes.
Travel companies must absorb the first two per cent of an increased cost, and the surcharge can be no more than 10 per cent. Many big operators, such as Seamaster Yacht Charter, will hedge currency so have no need to surcharge existing bookings.
What you should do
Book now with a British company and lock the price in pounds sterling so you are not exposed to any possible depreciation in the pound. It’s as simple as that.
Also, you should get an assurance from your travel company that they won’t charge a surcharge in the future if the currency does fall. Seamaster Yacht Charter, for example, has guaranteed no surcharge will be added to any bookings for 2019 as a result of Brexit related currency fluctuations.
What about Prices while you’re on Holiday?
As with the yachts, if the pound falls further, the costs while on holiday in GBP terms will increase. Conversely, if the pound appreciates then the cost of your holiday expenses in GBP will decrease. While this always is the case, it is the risk of the currency dramatically falling that people may be concerned about.
What you should do
If you would like certainty, consider buying some euros now at the current rate from somewhere like the Post Office. Purchasing a proportion of your likely holiday costs now will fix the amount you pay for those euros. It’s your own personal hedge against prices going up in the future. By not buying all your euros now, you will still benefit if the pound appreciates as well.
Another option is to look at a Turkey yacht charter, who do not use the euro, and have seen a depreciation in the lira recently. Indeed, the popularity of Turkey is undergoing a considerable revival of late as people rediscover this beautiful destination. You may think that Croatia would be the same, however the Croatian Kuna does move in sympathy with the euro and so any appreciation in the euro will be reflected in the Kuna as well.
Flight Availability and Interruption
Planes will still fly between the UK and Europe following March 29, even in a no-deal scenario. It is incomprehensible that they won’t. The Association of British Travel Agents (ABTA) has stated:
“UK citizens can be reassured that regardless of the Brexit outcome planes will still fly between the UK and the EU: if a deal is agreed then we will be in a transition period, meaning everything will stay the same until the end of December 2020 and flights will continue as normal. Even if we are in a no-deal scenario, the European Commission has said that UK airlines will still be able to operate flights between the UK and the EU. The UK government has offered similar assurances for EU airlines.”
Transport secretary Chris Grayling said that the government welcomed the proposals from the European Commission and would be studying them in greater detail over the coming days. He added: “Whether for business or leisure, travellers can continue to book with confidence.”
What you should do
If you are in any doubt, book a package holiday that includes flights, which means the company you have booked with is then responsible for the entire holiday, including getting you there. Seamaster Yacht Charter packages yachts with flights and transfers, so you get the benefit of flight choice (including low-cost flights), package holiday and ATOL protection.
Acceptance of UK Sailing Qualifications
There has been no suggestion that RYA qualifications will be refused after the 29th of March and we cannot envisage any reason why they would suddenly be deemed be invalid.
There is no connection between membership of the EU and the acceptance of sailing qualifications. Many guests from outside the EU successfully and enjoyably charter in the Mediterranean every year with their own national accreditations, such as our own RYA qualifications. British sailors would simply be in that category.
When asked if he foresees any issues with the acceptance of RYA sailing certificate in Europe following Brexit, Richard Falk, the Director of Training and Qualifications at the RYA was happy to give a one-word answer – “No”.
To reinforce this point, Branimir Belancic-Farkas, Head of the Maritime Affairs Directorate in the Ministry of the Sea, Transport and Infrastructure in Croatia has told Seamaster Yacht Charter that he says “no changes will be necessary” to the skipper license requirements for British sailors after the UK leaves the EU. Croatia currently accept RYA Day Skipper, Yacht Master, and Powerboat certificates, among others.
What you should do
You don’t need to do anything about your RYA qualifications as a result of Brexit. However, on a note unrelated to Brexit, we have noticed a growing trend of the International Certificate of Competence (ICC) being requested across the Mediterranean. We would recommend to all our clients that they consider obtaining the ICC as you do automatically qualify when you have a Day Skipper certificate. This will ‘future proof’ you against future changes.
You won’t need a visa to travel to the EU after Brexit. The European Commission announced in November 2018 that, even in a no-deal scenario, UK travellers can still visit the EU without a visa, providing the same is offered to European citizens visiting the UK. The European Commission has said that from 2021, UK citizens will need to pay a fee (of around 7 Euros) for this visa exemption. This is part of a new electronic travel authorisation system applying to all third country visitors to the EU, similar to the US ESTA regime.
People planning to travel within the EU after the end of March will be required to have six months left on their passport in the event of a no-deal Brexit, instead of the current three-month requirement.
What you should do
Renew your passport if it has six months or less left on it. This is fairly standard practice anyway, so we don’t see this being an issue.