Little Compass RoseCaribbean Compass   October 2008

Looking Ahead to the New Sailing Season:
‘Business as Usual — with a Difference’

There are many factors affecting the Caribbean boating scene and foremost amongst these are the changing financial, security, weather, boat-maintenance and ambiance situations driven by world markets and climate change. Boaters come in many guises, but generally they want the best of the above. So, are their established sailing and spending patterns going to alter during the coming season in response to the current and forecast changes?
— Julia Bartlett

Good question.
Compass has asked a cross-section of people involved in the Caribbean yachting sector to gaze into their crystal balls and reveal their predictions for the upcoming sailing season 2008 – 2009. Many thanks to all those who responded.

We asked the following questions:
• How do you foresee this coming season — “business as usual” or not?
• Do you predict (or already see) that there will be significant changes from past winter seasons?
• If so, what are the factors driving these changes and how will they affect cruising, chartering or marine-related business plans in the Caribbean this coming season?
• Are you doing anything special in relation to these changes?
• What else does your own “crystal ball” have to tell Compass readers about Sailing Season 2008-2009?

Cruising Business as Usual…
Steve Black is President and Founder of the Cruising Rally Association, which organizes the annual Caribbean 1500 yacht rally from the East Coast of the United States to the Caribbean. Steve says: “The growing wave of baby-boomer sailors is keeping the Caribbean 1500 growing steadily each year. Many of our participants made their major investment in a boat several years ago to begin preparing for Caribbean cruising. They have purchased all of the necessary safety gear and navigational systems and made many upgrades to their creature comforts. Things like a weak market and slow housing sales may add a year to the program for some people, but most are on a timetable that began years ago. Preparing for an extended cruise on one’s own boat requires a major commitment that is not entered into lightly.”
Many who are already cruising concur. Ellen Sanpere of Cayenne III: “As for the cruisers, we’re all getting older but love the inexpensive lifestyle and travel opportunities cruising affords us. Our little pond is a paradise, so I cannot imagine many good reasons to leave.” Susan and Jack Webb on the yacht Denali Rose agree: “We have been living full time on our 1983 Nauticat 43 since 1999 with time out for hurricane seasons. As to our plans for this year, we see little change from last year; we love the sailing lifestyle and don’t plan to stop anytime soon.”

With a Difference…
Betty Fries of the yacht Forever Young says: “The Caribbean is changing rapidly due to a number of factors. In my opinion, the rate of economic development in some of these islands is the largest single factor causing changes in the boating environment as high-end developments take over former anchorages.

“In St. John, USVI, all mooring permits for liveaboards in Cruz Bay have been cancelled. The same action is underway in Great Cruz where expensive new housing is going in. The boats ejected are moving to other bays, causing more crowded conditions. In addition, the National Park Service is preparing to actively enforce holding-tank requirements within Park boundaries (although pump-out facilities are rarer then hen’s teeth). And, new regulations by the US Department of Homeland Security requiring on-line notification of boats leaving and entering US waters are being enforced as resources become available. These factors all contribute to the often-heard cruiser complaints about the US Virgin Islands: too expensive, too many visa difficulties, and too crowded.

“Pressures on local island governments from illegal immigrants, larger numbers of boats in their waters, and the increased costs associated with processing foreign-flagged vessels are causing a steady rise in fees and closer surveillance by Customs and Immigration officials.

Mary Stone of M/V Ms Astor adds: “Cruisers in Venezuela can expect to experience more government influence in the setting of fees and rules concerning foreign-flag vessels. There are [also] many yachts in the ABCs. The largest number is found in Curaçao, particularly in Spanish Water. That anchorage is fairly crowded and as a result it is drawing attention from the government as they consider proposals for moorings, fees and restrictions on yachts in the anchorage. This will likely escalate in 2008-2009. The islands of Curaçao and Bonaire are in governance transitions; these changes may impact Customs and Immigration rules and procedures. The uncertainties for the ABCs for 2009 are centered around potentially changing rules for Immigration and Customs, length of stays and developing restrictions on anchoring.”
Judi Nofs of the yacht Fia: “The latest information is that the Rio Chagres in Panama is now off limits to cruising boats. Apparently some foreign-flagged vessels were not clearing into Panama and were staying in the Rio Chagres, so the Port Authority has closed it to yacht traffic.”

Including Some Changes in Longitudes
Linda Hutchinson of the yacht Sandcastle writes: “Funny you should ask about the upcoming 2008-2009 sailing season. We are beginning a new adventure this season — we are leaving the Eastern Caribbean. Over the past four years we have lived aboard our 42-foot Catalina and traveled as far north as Maine and as far south as Venezuela. We completed the Puerto Rico-to-Venezuela circuit three times, making loads of friends and experiencing a multitude of adventures.
“We began our journey four years ago at the early retirement ages of 59 and 57 after we were both laid off our jobs in New England. After the shock wore off, the answer to our lack of funds was clear: sell everything and sail away! We have never regretted that decision at all. We have more friends than ever in our 40 years of marriage, better health than most in the States our age and, best of all, our finances are okay. We struggle with a fear of not having any health insurance. However, in Venezuela we have had more things attended to at a fraction of the cost we would have incurred in the States. We go out to eat, drink and be merry most nights and still we haven’t spent the kind of money we would on groceries in the States.
“Now, we are headed for the Western Caribbean. This is partly due to our own timing and also because the cost of living here [in Venezuela for hurricane season] has doubled in the past year. 

“In preparation for our departure we have been getting together with others who have been there already. We have been told a lot of exciting things about the ABCs, Colombia, Panama and San Blas. We look forward to Honduras and Belize in the next few years.”

Judi Nofs: “Thanks to Randy and Lourae Kenoffel from Pizzazz [authors of A Cruising Guide for the Coast of Colombia], many more boats are continuing west than ever before. The Colombian Guardia Costa/Navy are very friendly, professional and easy to work with. At this time there is a large US Coast Guard/Navy presence all along the coasts; the US ships frequently are in Cartagena.

Susan and Jack Webb: “We left the USA in 2004 and went south to Trinidad. Each sailing season since then we sailed the Eastern Caribbean and returned each year to Trinidad. We spend our summers in Alaska and our winters on the boat. In January ’08, we left Trinidad and sailed west through the Venezuelan islands. After a few months in Bonaire, we moved on to haul out at Curaçao Marine in Curaçao, a much bigger island with more facilities available for boaters. We had planned to go on to Panama this year but now we will stay another year. When we arrived in Bonaire in March, we fell in love with the area. It will take at least another year to see all there is to see in Curaçao and Bonaire. Fuel prices are higher than Venezuela but less than the USA.

“Sailors seem to be having safe voyages from Curaçao through the anchorages of Colombia and on to Panama with the help of the Colombian Coast Guard and their float plans. We will continue to watch this route and plan to do it next year.”
Betty Fries: “My husband Larry and I have sailed the Caribbean for the last eight years. The first three, until 9/11, we were truly cruisers — independent of any permanent land ties and financially secure enough to go wherever we wanted. We meandered up and down the islands, with Trinidad as the goal for hurricane season and major boat maintenance. In 2003, we completed seven months and 5,800 nautical miles going from St. Thomas to Biloxi, Mississippi to Cuba, Jamaica, Aruba, Trinidad, and back to St. Thomas.

“After 9/11 and the ensuing stock market decline, we found we had to go back to work to support our boat lifestyle. We chose St. Thomas. As American citizens, it’s easy for us to work in the US Virgin Islands, and there's lots of work to be had. Chartering, driving boats, maintenance  — even a bit of bartending helped keep us where we wanted to be and allowed for the yearly island-hop down to Trinidad.

But Betty says that now, in addition to the bureaucratic issues she outlined earlier, “add the explosion in the bareboat charter industry. In the British Virgin Islands, a cruiser now has a difficult time finding a mooring ball or a place to anchor. So, where are we cruisers going? I believe cruisers will drift more and more south and west to find the elements that appeal to us — clean quiet bays, sleepy towns, deserted beaches, and safe, uncrowded anchorages.”

Julia Bartlett of the yacht Marietta says: “The Eastern Caribbean island chain has a huge variety of experiences to offer the cruisers, but mostly I hear how disappointed they are with it because it is ‘commercialized’. I hear this while they are taking advantage of a choice of haul-out facilities and modern supermarkets. We’re spoiled by all that is accessible to us these days. The island chain doesn’t do that well when it comes to hurricane risks and some islands are relatively expensive, but boat-maintenance facilities are excellent, security is passable, the sailing is fantastic, the islands are beautiful — and so here is where the boaters are.

“Trinidad has always had security issues and now Immigration are tightening up and it isn’t possible to stay there more than six months out of 12, which can present a problem for those of us who live on our boats. But the haul-out facilities are great, the cultural experience is fantastic, the boating industry has exploded and the yards are full (more ‘commercialism’).
“I am surprised that there are still 80 boats anchored in Porlamar, Margarita, even though in past years there have been nearer 150. The odds of having an unpleasant security experience here are higher than I like, plus high inflation and a poor exchange rate are diminishing the lure of cheap fuel and alcohol. Mainland Venezuela marinas and yards are fully booked in advance of the hurricane season, though, and offer their own security (more ‘commercialism’).
“Meanwhile, the Western Caribbean is increasingly popular and new boating facilities are gradually being constructed. I think that this is owing more to overflow than a conscious move westwards. The Western Caribbean is no safer than elsewhere in general. As cruisers drift west, the crime rate will increase in relation to the number of ‘rich’ boaters in underdeveloped areas, as it always has, and the Western Caribbean will become commercialized and a disappointment to those with a jaded palate. Commercialism will continue to blossom because cruisers will continue to support it, despite what they say and despite the effects of the forecast recession.”

Ellen Sanpere adds: “We did see some newbies last season; many were on their way to the Panama Canal, however, and are now in the Pacific. Some seem to have as a goal ‘most miles under the keel before the money runs out’. I’m guessing that not many cruisers will be heading to Europe unless they are going home.
Mary Stone: “For cruisers from Euro Zone countries Venezuela is still a bargain, which may explain the increasing number of European- and UK-flagged vessels. A higher concentration of Euro Zone yachts is expected in the future.” Mary, among others, has also noted a summertime trend in the cruising community: “Many people store their yachts for the hurricane season and return to their home country. While there are many cruising boats, there are fewer cruisers who stay aboard during the hurricane season.”
Robert Holbrook adds: “We have seen a big increase in the number of boats being shipped back to Europe, which has enabled many European clients who have limited time to enjoy the Caribbean but at the same time has had an impact on the number of boats located in the region during the hurricane season. It also makes it easier and more cost effective, after an accident, if the repairs cannot be easily undertaken locally.”

Chartering Demographic Shifts…
Ellen Sanpere notes: “I see a lot less discretionary income in the US and a weak dollar as the vacation-planning season progresses. It’s hard to say how the charter industry will be affected. For the US vacationer, will the economics of a less-expensive bareboat vacation have greater appeal than a land-based vacation?”
Narendra Sethia, Manager of Barefoot Yacht Charters & Marine Centre in St. Vincent & the Grenadines, answers: “Our take is as follows: We think that the trend currently indicates ‘business as usual — but with a difference’!
“The ‘as usual’ means that our forward sales for 2009 are very much in line with what we would expect and hope for by this time of year, possibly marginally slower but not significantly so.

“The ‘with a difference’ is that we are seeing a clear demographic shift with a drop in North American bookings and in increase in European bookings, primarily on account of exchange rates. Our future sales to North American customers (both Canadian and American) are around 15 percent down, but our European sales have increased by an identical proportion.
 “One major consideration right now is that we are primarily booking for next year’s high season, rather than next year’s low season, and of course high season vacationers are more affluent and therefore less likely to be resistant to spending money to get here.”

Peter Cox, Director of TradeWinds Cruise Club (with timeshare-style charters out of the BVI, Bequia, Belize, St. Martin and Antigua): “There is no doubt that a successful club membership scheme assists the charter company in times of recession, the idea being that folk are much more likely to take their annual sailing vacation if it is already paid for.
 “TradeWinds’ winter bookings are looking fairly normal thanks to the large number of club members and their families and friends who are cruising with TradeWinds as usual. However, the summer marketing net will need to be spread a little further and wider as early signs are that 2009 summer cabins are not filling up quite so quickly as last year’s summer cabins did.”
Ann E. McHorney, Director of Select Yachts in St. Maarten, said:  “It is interesting. At first I thought the fuel and the Euro rates would put a kink in charters. The Med was slower this summer but now we are getting a lot of early action for November, which I do not remember happening last year. Perhaps people put off chartering this summer, as they could not afford the Med, and are delighted with Caribbean rates in comparison.

“I think the fuel rates will really help our sailing yachts to get more bookings. I am getting calls from higher-end brokers this year — I think they are being asked more for sail once they hear the fuel rates. As well, we are not repositioning yachts as much. The boats and the clients can’t afford to change locations, they will tend to stick around one area for the season — at the least the motor yachts will. We did a new ad that says, ‘Last time we checked the wind was still free’. We hope to turn some people back on to sailing. Besides being more cost-effective it is eco-friendlier as well.”
…and the Flight Capacity Challenge

Narendra Sethia: “I think that there is the possibility of a significant drop in off-season bookings for 2009 on account of cost and difficulty of air access, but since our average booking lead-time is around four months, we will probably not have hard evidence of this until early into the New Year.”
Ed Hamilton of Ed Hamilton & Co. charter booking agency: “So far the number of bookings is up on last year but the total income is slightly down, so people are spending slightly less on their charter. Overall we are happy with the way the season is shaping up.

“With American Airlines cutting so many seats, I am concerned that we will have problems getting people to the Caribbean as the season gets closer, at least for the popular dates. So far, however, this has not been an issue.”
The flight capacity problem could affect events as well as charters. Andy Morrell, organizer of the annual HIHO windsurfing regatta: “Next year is the Highland Spring HIHO event’s 25th anniversary. Our event bucks the trend in windsurfing… we sell the event as an adventure and pursue amateur windsurfers who want great racing and fun parties. The formula has proved successful and we anticipate a strong year for the event, though we remain concerned that diminished North American flight capacity will frustrate our important US participant percentage.”

Red Tape and New Rules
Julie San Martin, Chairperson of the St. Croix International Regatta tells us: “We in the USVI have already been somewhat impacted by the visa requirement of homeland security.
“Example: I wanted the 2008 Caribbean Regatta Organizers Conference to be held on St. Croix — no go, because all the down-islanders need a full-blown visa to attend, so we will be meeting in Anguilla instead. This problem is compounded during regatta season, because the requirements for visitors arriving by commercial carrier are much more relaxed than by private boat. For example, many of the BVI sailors have to go by ferry to St. Thomas or St. John and then be picked up by their crew for the trip to St. Croix. The fact that the US embassies in the Caribbean are in Trinidad and Barbados means that you have to go there, or to Miami, for a visa. There should be an easier way. This is affecting the US territories’ regatta program and reducing the down-island participation.”

Ellen Sanpere adds: “US visa requirements for non-US crew arriving on private, foreign-flagged vessels will surely keep some racing boats out of the Rolex, St. Croix International and Culebra Regattas.”

Stéphane Legendre, organizer of the Transcaraibes and Route du Carnival yacht rallies states: “In more and more places, clearances are becoming a real headache. It is a real issue that puts people off going to some destinations.”
This is illustrated by a Compass reader who recently wrote: “I took a yacht to Carriacou a couple of weeks ago and once again I was frustrated with the process for clearing yachts in and out of all the islands. Clearing out of Barbados and into Carriacou was bad enough, but then having to clear into Union (only about five miles from Carriacou) and back out after three days and then back into Carriacou really put a damper on the trip.

“While bad, these experiences pale in comparison to what you have to do to clear in and out of Trinidad.
“The individual Caribbean island governments need to understand how important the economic impact of yachting is to the Caribbean. Instead of making it more difficult for yachtsmen and women who want to comply with the laws, these governments should make it easy to clear and then focus their effort on checking that the yachts in their harbors and along their coasts have in fact cleared. (Although I have sailed up and down the Caribbean several times, no one has ever boarded a yacht I was on to check the clearance papers.)

“I was overjoyed therefore to read in the Compass magazine of an effort (eSeaClear) to simplify and speed up the clearance process for yachts. Improving this procedure can only increase the number of visitors who come by yacht as the difficulties of clearing in the Caribbean are well known and I think deter many visitors and discourage those that do come from visiting several destinations because of the hassle of clearing.”
Steve Black mentions another ray of light: “We are grateful to the key people in the BVI Government that agreed to put off new taxes on [yachting] visitors to their shores. The BVI has been a great place to begin Caribbean adventures and many of the Caribbean 1500 participants will cruise the Caribbean from Grenada to Puerto Rico over the winter months.”

The Evil Twins: Inflation and Crime
Empirical evidence suggests that inflation increases the crime rate.
Mary Stone: “[In Venezuela] inflation is running over 30 percent annually and the trend will likely continue through 2009. Fuel is extremely cheap but can be challenging to arrange for a foreign-flag vessel. Although medical care remains generally good and inexpensive, the cost of marinas, food, boatyards and skilled labor are approaching world prices or exceeding them in some categories. Prices are likely to continue to rise for marina and boatyard fees. The uncertainties for 2009 are government economic policies and the parallel value of the US Dollar and Euro.

“[In the ABC islands] the exchange rates for the island currencies are stable and tied to the US Dollar. This is likely to continue through 2009. However, Curaçao could decide to align with the Euro and if that happens, it will likely have nasty economic consequences.”

While security problems arise from time to time in various spots throughout the Caribbean, and certain hotspots persist. Mary notes: “Cruising Venezuela requires security to be a constant concern.” Judi Nofs adds: “Many yachties have continued on to Panama via the San Blas islands, but things are a-changing there. The Kuna Indians are for the most part friendly and honest. However, while we were there, a locked dinghy and outboard were stolen from a cruising boat. In Colon, Panama, at The Flats anchorage, more dinghies and outboards go missing even though they are lifted and locked.”

Windier Conditions? Better Sails!
Good sailors have sails and gear ready to deploy to meet a variety of conditions. Many commercial enterprises are currently raising new sails.
Steve Black: “This year the Caribbean 1500 will depart from Hampton, Virginia, on November 2nd. For the first time there will be a simultaneous start from Charleston, South Carolina. This is expected to add an additional 15 boats… The Charleston start will serve boat owners from North Carolina to Florida, and will also permit smaller boats to participate with less strong weather. Also, responding to a request from some of our veteran rally participants, we are adding a level of more intense competition for low handicap performance cruisers who join the event. This year, we will have our Rally and Cruising (non-competitive) classes, as always, but will add a Performance class. In all, we expect our largest group ever with 75 to 80 boats in our combined rally.”
Grenada Sailing Festival Chairman, Jimmy Bristol: “2009 will be an exciting year for all of us and I see the new Southern Circuit (see related story on page 15) being a great incentive to skippers to keep their boats in the Southern Caribbean longer….” Jimmy adds that there will also be positive changes this year at the Grenada Sailing Festival itself, including the addition of a new IRC Racing Class.

Jean Michel Marziou of Association Le Triskell in Guadeloupe, organizers of the Triskell Cup, Triskell Trophy and Around Guadeloupe regattas, says: “The local government, Région Guadeloupe, has introduced new political investment in the sailing environment, providing support and help in the organization of nautical activities and events in the area. Added to our growing partnership with Antigua Sailing Week, this availability of extraordinary government support should provide a ‘grand cru’ 2008-2009 racing season!”

Camper & Nicholsons Port Louis Marina in Grenada says: “Wireless broadband, cable TV, electric carrying buggies and trolleys in addition to ample car parking are all available at the marina in Port Louis. The marina also offers excellent pump-out facilities, which have already tremendously improved the marine environment of the lagoon. Port Louis Marina plans to become a ‘blue flag’ certified marina, which means that the marina will be set to the highest environmental standards. The marina will also be ISPS compliant, accommodating SOLAS vessels requiring secure berthing.”

Robert Holbrook, Managing Director of Admiral Yacht Insurance: “With the benefit of having had my own boat in the Windwards and Leewards and subsequently recently taken her to Venezuela, the ABC Islands and later through Panama via Colombia and having studied our statistics I can comment as follows.

“There seems to be a move by certain yards to make substantial improvements to their lay-up facilities. This started in the BVI, and then Grenada after Hurricane Ivan, but seems to have migrated to other islands such as Antigua, St. Lucia and Curaçao. Tie-down facilities and engineered cradles are now much more prevalent. Due to these improvements we now have a better ‘spread’ of risk, which is obviously an advantage in the event of a catastrophe.”

The Crystal Ball Predicts…
Steve Black: “The Caribbean region will continue to be an excellent area for private yacht owners to visit. Many of the economies are geared to tourism and a healthy relationship has been established. Our yachtsmen have been well received and have become good ambassadors for the Caribbean when they return home.”

Camper & Nicolsons Port Louis Marina: “We envision Grenada being one of the premier yachting centers in the Caribbean.”
Robert Holbrook: “The impressive fun regatta circuit will continue to entice European sailors who wish to add some variety to their cruising plans while they have their boats stationed in the Caribbean.”

Ellen Sanpere notes, “In the racing sector, we’ve seen a cooling-off in some regattas for the under-40-foot boats.” Her yacht racing husband Tony predicts: “There will be more, larger racing yachts since there are more regattas offering IRC classes and better race courses more suitable to the big machines.” He continues: “More marinas are in the design, approval, or construction stages. For the average cruiser it is business as usual. More boomers are retiring and coming down.” Ellen adds: “My only prediction is that things will certainly change after the inauguration in Washington (but not immediately, of course). As an aging middle-class American cruiser on a fixed income, I can only hope the change is for the better.”

Betty Fries: “The countries bordering the coasts of Central and South America have a prime opportunity to attract the significant resources represented by cruisers coming to their shores by ensuring safe anchorages and benevolent neglect. Cruisers could be lured away from Trinidad by one well-run, well-supplied, well-equipped boatyard. And for anyone looking for a business opportunity in the Caribbean, a fleet of pump-out boats could be just the thing, because that’s coming too.”
Mary Stone: “Although inflation shows no sign of abating and crime will likely continue to increase, with good sense and proper planning, Venezuela can continue to be enjoyed for its beauty and its majority of friendly people. And even with the growth, yachts can continue to enjoy the ABC islands’ beauty and services in relative economy and safety.”

Julia Bartlett: “I am hearing more American boaters talking about returning to the States than I remember in previous years and I’m not sure why, but I am sure they will be replaced by new faces looking to stretch their dollars and attain a different quality of life. The number of boats will carry on increasing until prices get significantly higher; cruising will be more than ever a middle-class retirement plan in the future.

“My forecast for the 2008-2009 Sailing Season is that prices will continue to increase, boats will get bigger and the storms stronger and there will still be sailors in small boats, getting by off the ever-richer pickings, dodging the pirates and enjoying every moment without ever playing Mexican train dominoes. Business as usual.”
Ed Hamilton: “Generally we haven’t seen any effects of the turndown in the economy. Let's hope things continue this way!”
Ann E McHorney: “I think we will all be surprised that the 2008-2009 season will turn out to be better than expected, as far as charters sold. But I do think the Caribbean will see fewer transient motor yachts this year. Let’s face it, it is a lot of expensive fuel to get here and back from Florida or the Med.”

Narendra Sethia: “The bottom line is that we foresee a good 2009 high season, possible slightly down on this year, but not hugely so. We fear, however, that the 2009 low season could be a tough one. We have always offered a highly competitive pricing structure, and at the end of the day cost is one of the most important factors, so we believe that pricing flexibility will be key to a successful 2009, not only for our business, but for all tourism-related businesses.

“There appear to be a lot of businesses out there who think that customers will fall out of the sky and into their hands like manna from heaven,” Narendra says. “I think that 2009, more than any other recent year, will remind businesspeople that if they want to have a successful year, they will need to get off their backsides, go and get the customers, and always be prepared to make a deal. Of course that’s easy for me to say because I’m half Indian and a camel-trader at heart!”


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