The Caribbean charter crews and Brokers are congratulating Jonny and Mere on their wedding November 14th!

OK, so the 2008 VICL Boat Show  is in full swing today, and a fairy tail is unfolding before the very eyes of all the crews and the charter Brokers.  A wedding is being planned for the crew of s/y Conundrum – Jonny and Meredith on November 14^th – the day after the VICL Boat Show concludes!!!  What an exciting moment for all of the participants.  Jonny and Mere are two very popular members of the charter Crews and Brokers.

I learned from the ever-smiling Captain of Condundrum  that he grew up around salt water activities his whole life, however he is not an “old salt” yet.  Jonny as lived in the Virgin Islands since he was a teenager, and he has been a sailor for 18 years, and the Captain of several private yachts.  Jonny has the reputation of creating an unforgettable charter vacation experience.  I have heard Jonny say, “My biggest satisfaction is when our guests say at the end of the week, ‘That’s the best vacation we ever had!’ That puts a smile on my face.”

Meredith is from the Midwest.  She grew up in Missouri and has a bachelor’s degree in Communications Studies from Kansas University. Interestingly, prior to becoming a chef, she obtained a Securities Exchange License Series Seven, working for three years with Morgan Stanley out of Santa Ana, California. Thank goodness she changed her profession in 2003.  We would have hated to have her be on the “sinking ship of security firms” during the last six months.  “I really enjoy seeing our guests experience a new environment, and I like to add little touches, like serving specialty drinks or having a themed menu for the day. I’m creating an atmosphere of informal elegance – nice but not stuffy, casual yet stylish. Simply pleasurable – every moment of the day”

Meredith, the bride to be, has years of culinary experience on private and charter yachts, with gourmet specialties in Caribbean, American, and Italian cuisine.  Enjoy a picnic lunch on the beach, lounge with a frozen cocktail in the cockpit as you watch the sun sink to orange with the “green flash”, and then dive into a luscious dinner served in the elegant salon. The perfect ending to a perfect day – and Mere makes it all happen for each of her charter guests.

The sailing yacht Conundrum is where the beautiful design of traditional yachting blends with contemporary conveniences. Their 62-foot sailing yacht, completely re-fitted in 2006, and features the latest in all the high-tech conveniences and simple elegance polished mahogany throughout. And, for they even have 6’6″ headroom for their tall sailing guests.  Go to the s/y Conundrum website for even more details.

More yachts to come and lots more fun awaits the participants as we continue our preview of another unforgettable VICL Boat Show.  This afternoon Sue Maki, the GM of Flagship  will be doing Part 2 of the new Broker training and certification.  The charter yachts are open for viewing until 5PM.   During the lunch event sponsored by Flagship, the Director of Homeland Security, Mel Vanterpool Homeland Security,  will be reviewing the issues his department is facing in the Caribbean.  And, you won’t believe the party that is planned tonight – The Paradise Party at the St. Thomas Sky Ride.  More yachts are yet to be preview…stay tuned!  Your charter yacht detective  is still on duty!

What a night that Director Erik and the Team put together for the Governor’s Reception!

Talk about a party with EVERYONE decked out in their finest “Black & Whites”, tonight was it!  The Andrew Douglas Steel Pan Band was the hit entertainment for the night.  Andrew is from Trinidad, the home of steel pan, and showed us how to play the pans!  The charter yacht suppliers were showing off their best stuff with samples for all to enjoy.  And there was plenty to drink, because thirst is a dangerous thing, expecially within the charter yacht industry.  I think I even remember a few Brokers who were a bit out of shape for the type of parties the Captains and Crews are accustom to.  But, let’s get back to the honored government guests at the event. Lt. Governor Francis, Senator Hill, Commissioner of USVI Tourism Board Nicholson Doty,  Lt. Commander Grant – USCG, and Director Mel Vanterpool of Homeland Security.

It was a night of honoring the charter yacht industry for their contribution the economy of the USVI, and an opportunity to have the elected USVI officials address the issues of how their administration is supporting the growth of tourism and of the charter industry.  Their remarks were focused on the reality that,  “…2008 has been one of the most challenging years for the USVI economy!”   That is an understatement given the hurricanes that touched the Virgin Islands, the issues facing the airlines industry and their proposed cut backs in flights to the Caribbean, and the financial meltdown of the U.S. economy.  It was a time of “straight talk” about what the USVI is facing with Tourism as the foundation of their economy.  However, they also let the audience know what the USVI government is doing to create a healthy Tourist economy, which is critical to the Charter Yacht Industry.  During their remarks, and also during my discussions with Gov. deJongh in past months he has made the following reports regarding how they are addressing the critical issues of supporting a healty tourist economy:

1. Governor John P. deJongh, Jr. has participated in a series of meetings in New York City with investor groups in the past few months that are considering major investments in the Virgin Islands and particularly in St. Croix.  Resorts, industry, and real estate will create more visitors and more jobs.
2. He sent V.I. Tourism Commissioner Beverly Nicholson-Doty to Florida for meetings with her Public/Private Sector Airline Committee and American Airlines.  American was planning to cut 40% of their flights  to the Caribbean on September 1, 2008.  Ms. Doty and her committee met with Peter Dolora from American Airlines and was instructed to not let the meeting end until they committed to reinstate their Winter flights to the Caribbean. The results are that American’s once-a-day flight between Miami and St. Croix will began again on November 2^nd.  The daily flight between New York’s JFK Airport and St. Thomas will resume next week November 20^th, and a second flight will be added on Fridays starting December 18^th.  American’s flight between Boston and St. Thomas will run on a twice-weekly schedule starting November 2^nd, and on December 18^th, it will be back flying five days a week.  This was a BIG result that is requiring a joint advertising and marketing plan with the various USVI tourist industries to be implemented through 2009.
3. The Six-Pak law  is still in effect and Gov. deJongh agrees it needs to be overturned.  He has worked closely with Director Erik of the VICL and Shelly Tucker from s/v ThreeMoons  to present a position paper that can be used with the Federal Government to have this law overturned.  The challenge the Governor has had this year in moving this initiative forward has been the non-stop challenged presented this year as stated above.  All of us know the incredible benefits that the repeal of this law would have within the Charter Yacht industry.  Director Erik and your VICL Board will continue to press for this issue to become a priority.

And…the Governor’s Reception party raged on!  It was another night of fellowship with old friends, and meeting new friends.  The Charter Yacht industry is made up of some of the finest people I have ever met.  Now, back to our berths, and preparing for another day of viewing the charter fleet.  More to come tomorrow with feature articles on many of the yachts and crewmembers attending the show.  Until then…sweet dreams.

Well, today you can!!!  Live your dream aboard this beautifully appointed, performance cruising sailboat, luxurious, fully equipped and ready to sail way…RIGHT NOW!

Captain Chris and First Mate/Chef Julie purchased this fast sea-worthy cruising vessel in 1998.  They immediately began a refit of the sailboat and launched s/v Blu Moon  into the Caribbean charter fleet that year.  What an adventure they have enjoyed while discovering the life of owning a charter yacht business in the Caribbean.

I first met Chris and Julie at the Virgin Island Charter League Boat Show  at Yacht Haven Grande in St. Thomas.  The VLCL have hosts the charter yacht fleet each year to St. Thomas for the charter yacht Brokers to check them out and see which ones they want to promote to their customers back in the States.  If you recall, last year I did the internet reporting for the VICL 33^rd Annual Boat Show.  At last year’s show I was rushing by s/v Blu Moon  and immediately stopped dead in my tracks when I saw Chris and Julie rocking in the hammock attached to their mast.  I am so glad I stopped to say hello.  What has evolved is fun friendship with two top professionals in the charter industry.  

They have owned and operated their charter yacht business for over eleven years and have been married for almost 25 years.  They met in Kansas and the story is too long to tell as to how they ended up in the Caribbean.  What was most interesting to me was their favorite chartering area is the Spanish Virgin Islands.  I have seen Spanish Virgin from the air when flying to the Caribbean from San Juan, Puerto Rico, but I have never actually sailed around them.  The stories that unfolded let me know I have missed a very special part of the Caribbean the last 40 years.  And, the experiences they shared happened with their eyes gleaming and big smiles on their faces.  They are passionate about the unspoiled beauty and very laid back style of the Spanish Virgins.

So, why are they selling s/v Blu Moon?  Because they have purchased a 65′ Privilege catamaran – s/v Felicia, and are sailing up from Trinidad  right now so it can be in the VICL Boat Show next week in St. Thomas.  My last correspondence from them let me know they are doing the upgrades to s/v Felicia while under sail.  They did report they had there first Caribbean swim when they anchored at Bequia in the Grenadines.  They are just about complete with all of the refitting, including a new galley.  From what they told me last week s/v Felicia  will be in sparkling condition for the St. Thomas Show which starts next Tuesday.  I have been on s/v Blu Moon  several times, and since Chris and Julie purchased it in 1998 they have consistently been improving her design, capabilities and comfort. Their custom changes and upgrades are valued in excess of $100,000, optimizing this vessel for Caribbean cruising and beyond.  It is ready to enter the Charter Fleet today, or to take you anywhere you want in the world!

So, go to the s/v Blu Moon  website and check out the incredible opportunity awaiting the next charter yacht owners.  The price is only $225,000.  Or, email them at: info@bonvoyagecharters.com    Also, if you want more information about chartering their 65′ Privilege catamaran s/v Felicia in 2008/2009, contact me TODAY.  It is booking up fast.  You will not believe the experience of a Caribbean charter yacht vacation.  Their rates for an all inclusive week start at only $24,500 for four people.  Their catamaran can hold up to four couples in queen size bed suites.  Until next time…fair winds.

American Airlines as agreed to restore flights this Winter San Juan and St. Thomas!

You recall from a past article  about the “Hurricane” that was coming to the Caribbean the first week of September.  That pending disaster was having American Airlines cancel almost 40% of their Winter flight schedules to St. Thomas  and San Juan, Puerto Rico.  It would be have been devastating to the tourist industry of the Caribbean, since the “high” tourist season is about to begin the end of next month.  Well, the disaster has been averted because of the hard work of the V.I. Tourism Commissioner Beverly Nicholson-Doty  and Gov. deJongh’s Public/Private Sector Airline Committee.,

Last month, Ms. Nicholson-Doty and the Airline Committee from the USVI flew to Miami to personally explain to American Airlines  senior vice president for the Caribbean and Latin America regions to reconsider.  They met with Peter Dolora with the intention of not leaving the meeting until American Airlines renewed their commitment to reinstate the Winter flights to the Caribbean.

 American’s once-a-day flight between Miami and St. Croix will begin again on November 2^nd.  The daily flight between New York’s JFK Airport and St. Thomas will resume November 20^th, and a second flight will be added on Fridays starting December 18^th.  American’s flight between Boston and St. Thomas will run on a twice-weekly schedule starting November 2^nd, and on December 18^th, it will be back flying five days a week. 

There is a piece of the transportation puzzle to the Caribbean that has yet to be solved with American Airlines that is troublesome.  American Airlines’ inter-island connecting flights served by American Eagle, WILL NOT continue it’s flights from San Juan to the USVI!  “We are looking at various options,” Nicholson-Doty said, declining to be specific because of ongoing negotiations. So, three weeks ago American Eagle cut its eight daily flights between St. Thomas and San Juan to only three, and there is no agreement if the American Eagle flight schedule will ever re-instate the five flights they are abandoning.  American Eagle is also eliminating five of its eight daily flights between San Juan and St. Croix.  Again, it is a very difficult situation for the USVI and the Caribbean, because there was an increase in tourist visits to the Caribbean the past twelve months, and now American Airlines is faced with the realities that their business model still cannot make a profit, even with the increased numbers of passengers from last year!  Oil prices  are still a critical issue for all of the airlines.

The USVI Tourism Department is “putting its money where its mouth is” by investing $1.5 million of its money into partnering with American, Delta and, “to a lesser degree,” Spirit Airlines to advertise the territory and the airlines!  This is BIG news! The USVI knows that it is a win/win if they can drive more traffic to these airlines in order to keep these routes as full as possible – even though they have cut back many of their flights.  Their ads include radio and newspaper advertisements, billboards and airport signage. Additionally, in Atlanta buses were wrapped with ads touting the U.S. Virgin Islands and a tag line to call Delta Vacations.

In return for the USVI advertising investment, Nicholson-Doty said, the airlines provided complimentary airplane seats for travel agents, travel writers and sweepstakes winners. One of the target cities for this ad program is Charlotte, North Carolina. “The USVI Tourism Board is spending $375,000 to advertise St. Croix in radio, newspaper and Internet ads,”  Nicholson-Doty said. U.S. Airways flies to St. Croix from Charlotte on Saturdays. “The ad campaign encourages early bookings to the USVI,” Nicholson-Doty said.  Some of the other airlines thinking of serving the Caribbean have contacted the USVI Tourism Board seeking revenue guarantees, but Nicholson-Doty stated, “The USVI could be paying for empty seats, and we are only developing marketing relationships that are a win/win for both sides.”  Another Hurricane has been averted by the foresight and determination of the current USVI administration to face the issues head-on and find solutions.  So, those of you who were worried about how you were going to get to your favorite spot in Paradise – have a rum punch at Duffy’s Love Shack  in Red Hook instead.  Until next time…your Caribbean lifestyle reporter  remains on duty!!!

We are traveling back to California to enroll our last one into college!

We are gladly taking donations from all of our friends, family and the internet world.  As of today we will have all THREE of our kids in college – Matt at Loyola-Marymount University, and JJ and Bryana in Santa Barbara, California!  In fact, what we really need are more real estate sales in the Caribbean!  It is a hectic time of transporting ALL of them and us to the various campuses to get them settled into their college dorms and apartments.  In addition, it will be the first time in 22 years that Ann Marie and I will be “empty nesters”! 

Bryana, as a freshman, is very excited, nervous, and filled with anticipation of how the next chapter in her life will be unfolding.  Her three girlfriends since the second grade have said their goodbyes since they are all going to different universities.  Ann Marie found a blanket manufacturer that could weave in a photo into the blanket.  We found the girls’ favorite photo of them and surprised them with a blanket for each of them so they could be reminded of their dear friendship.  Bryana is currently focused on a career in journalism.  As you can see, she may want to start in television since she is so beautiful and so darn smart.

JJ continues his passion for surfing and golfing while attending college in Santa Barbara.  As a Junior he has kept a 3.0 GPA, and he has lowered his golf handicap significantly between his class work.  If I could pick a career for JJ it would be doing something with kids.  He is an amazing coach with sports, and he has a natural knack of having kids bond with him and listen to his advice and direction.  At the moment his major is social science.  He would be a great elementary school teacher, too.  However, no matter what he does he will need to live by the beach.  We are so glad that he and Bryana will be in the same college town, just so they know there is a family member close by.  It is comforting to us, too.

Matt is completing his last few courses at LMU.  He already graduated with double degrees in Economics and Music – what a combination of interests.  He is passionate about both, and during his last four years he has more than tripled his stock portfolio because of studying the stock markets.  He has made some BIG hits with Apple stock purchases over the last few years.  His next step will be in some type of international experience.  We will be taking him to London in January to interview with the London School of Economics.  And, next we will open some doors in Geneva, Switzerland with the Nestle Group.  He would really enjoy a year’s internship with Nestle. ( Any contacts would be greatly appreciated.)

Ann Marie and I are already planning an adventure when Bryana graduates in four years.  As she exits college at that time, we will get an immediate raise in our income.  With that in mind, we are planning to sail in the Caribbean for six months starting in the BVI and heading south with no other plans than beautiful sunsets, SCUBA diving, fair winds, and having friends meet us along the way at various islands.  I will let you know how these plans unfold.  Wish us well as the launch our last child into a new world.  Until next time…fair winds to all of you!

The Charter Yacht Society and the Virgin Island Charter League boat shows are booked again for November – Road Town, BVI and St. Thomas, USVI!

As you know, I am a RAVING FAN of the charter yacht industry in the Caribbean!  Each year for the past 34 years the Caribbean charter yacht industry creates an opportunity for the charter yacht vacation Brokers to inspect the charter fleet in two locations – Road Town, Tortola, BVI, and St. Thomas, USVI.  Each of the charter yachts that register for shows present their yachts in the most amazing condition – bright work sparkling, and all of the woodwork freshly varnished.  The crews are decked out in their finest, and the presentation of their yacht is meant to communicate what it would be like for a charter guest to share a week with them.  So, the yacht Brokers are taking notes during the days of the Boat Shows and generally picking their favorite dozen or so yachts they will be promoting to their U.S., Canadian, and European clients.  As I have mentioned in previous articles, there is NOTHING like a charter yacht vacation!  Forget cruise lines.  Be pampered by the most amazing service professionals you will ever meet as your captain and gourmet chef.

There used to be just one Virgin Island Charter League in the Caribbean that served the BVI and the USVI.  But, in the early 1980s the demand for charter yacht vacations grew at such a rate that it made sense to have two distinct organizations specifically serving the British Virgin Islands and the U.S. Virgin Islands.  Even though they are separate associations, they work in tandem regarding any issues facing the charter industry.  An example of that would be like behind the scenes is the work they did together in negotiations with the BVI government that was about to implement an increased TAX on every charter yacht that anchored in the BVI.  It would have added a difficult burden of expenses to the charter fleet that spends most of it’s time in the BVI, when they are all dealing with the oppressive fuel costs for their boats.  Remember, even though most of them are sail boats, they need fuel to run their generators to make sure their guests are comfortable at night with air conditioning, and to make sure they have cold refrigerators and ICE!  So, even though the guests are on a sailing yacht, the yacht needs FUEL to create the unforgettable experience of a crewed chartered sailing adventure.

Back to the Boat Shows…these annual events in the BVI and the USVI are critical moments to support the tourist dollars for both of these island nations and territories.  Tourism is the KEY economy for both of these countries.  The charter yacht vacation industry is an important aspect of tourist dollars.  Speaking from a personal experience of sailing in the Caribbean for 35+ years, the amount of money spent before, during, and after a charter yacht vacation generate almost $1,000 per person to the island nations that are their start and ending port.  These are BIG dollars given the size of the Caribbean charter yacht vacation fleet.  During the 2008 boat shows there will be a Premier’s reception for the BVI show, and a governor’s reception at the USVI show.  Last year at the USVI boat show Gov. deJongh, Lt. Gov. Francis, and Senator Hill were special guests addressing the charter community.  They are not showing up at this event because they have spare time on their hands.  They all know that this industry is a key to the health of their economies.

In past articles, I addressed some of the issues that are facing the Caribbean charter and tourist industries.  The key one is having the airlines figure out a business model that allows them to supply transportation to all of the visitors who want to visit Paradise.  There was an almost 15% increase in tourist coming the Caribbean in the last 12 months.  However, American and Continental Airlines are cutting back their flights by 40% to San Juan, Puerto Rico starting September 1^st.  The airlines industries are struggling to figure out a business model that allows them to stay in business.  I will be at both Boat Shows doing the internet reporting for each of them.  You will have a great time logging on from November 6^th  – 14^th.  I will keep you posted regarding the fun events that will be part of both of these special annual Caribbean events.  Until next time…your Caribbean lifestyle reporter is on duty!

The decision was made by a specially convened BVI Cabinet meeting on Monday night called by Honorable Ralph O’Neal to defer the implementation of the Harbour Fees!

 ”Timing has everything to do with the outcome of a rain dance.”  The DANCE that is currently underway in the Virgin Islands is how to create a level playing field for the charter yacht communities in the USVI and the BVI.  The timing could not be BETTER than right now to create this result!  A discussion began with the USVI government officials this past week regarding the revision or repeal of the Six Pack Law  .  This topic was ratcheted up a notch yesterday with the announcement by the BVI government deferring the implementation of the harbor fees for yachts entering or remaining in the BVI Territorial waters, or those using a BVI Ports Authority facility. 

What does this mean?  Well, the BVI government had contracted a Canadian company to provide them a report recommending how they could increase their revenue off the backs of the yachting community – primarily the charter yacht owners.  The Canadian company’s approved recommendation was to have a “harbour fee” of $1.00 per foot per vessel for the first day’s stay, $.75 per foot for the second day’s stay, and $.50 per foot for the third and subsequent day’s stay.  The cost to the charter yacht fleet would have been enormous!  And, with the BVI being one of the top charter yacht destinations in the Caribbean it would have meant higher prices for EVERYONE!  This fee was to be effective July 15, 2008 – yesterday.

At the announcement of the deferment of the harbor fee, Premier O’Neil stated that the decision was based “… in an attempt to protect the BVI Territory’s competitive edge as a yachting destination.”  He further stated, “After all, the BVI has been known as the sailing capital of the Western Hemisphere, if not the world, and therefore it was extremely important for the Cabinet to consider the representations that were made by local associations (such as the BVI Charter League) , maritime agents, and others involved in the yachting industry, both locally and abroad.”

He added, “It must be remembered that the yachting industry contributes to the economy of the Territory and the yachtsmen enjoy our waters from Anegada to Jost Van Dyke.  The yachting industry is a significant contributor to the local economy, and as such, the sector must be safe-guarded against adverse economic impacts.”

The Premier concluded, “The Cabinet reviewed the new harbour fees and we considered the cost implications of the charges to the yachting community when compared to the rising cost of fuel.  In addition, the Cabinet determined that if the BVI were to implement this new fee structure, the Territory may have become the most expensive destination in the world for mariners and yachts.”  Premier O’Neil said that the BVI Government is committed to ensuring maximum economic development for the Territory and providing the necessary protections for the sectors that propel its growth. ( The revenue from the charter yacht community is enormous to the BVI! )

This is BIG news for the USVI charter yacht community as it works hard to create a level playing field for economic growth with its BVI neighbors.  It is all of our hope that this move by the BVI government will be a further message to the USVI government administration to address the Six-Pack Law in order to secure and protect the economic growth that continues to move to the BVI because of not allowing more than six charter passengers to be picked up from the USVI.  Again, the millions of tourist dollars that are lost to the BVI is unbelievable.  It is very encouraging to know that this issue is being seriously addressed by the USVI government today.  It appears that the behind-the-scenes person outside the government agencies who is championing this issue from the charter yacht community is Erik Ackerson from the Virgin Islands Charter League.  The message that needs to be heard by the USVI government departments is that we are all standing ready to support the needed changes to the Six-Pack Law.  Your comments are always welcomed.  Until next time…

This law states that a charter yacht vacation that has more than six guest cannot begin their voyage from the U.S. Virgin Islands!

You remember that last November at the Virgin Island Charter League Boat Show in St. Thomas, I was asked to be the internet reporter for the event.  Because taking on this fun and challenging task I had the opportunity to meet and get acquainted with some wonderful people within the charter yacht industry and several of the USVI elected government leaders; Gov. deJongh and his wife, Lt. Gov. Francis and his wife, and Senator Hill.  My last blog posting was about a letter I received from Gov. deJongh last week responding to a letter I sent to him about the Six-Pack law and how it may be time to have it changed.  One of the people at the show that I met was the chairperson for the show, Shelly Tucker - co-owner of the charter yacht Three Moons.  She immediately jumped on the band wagon regarding how to invite the government officials to address the Six-Pack law.  Below is the letter that I referred to in my blog that Shelly wrote and I edited.  IT IS A LONG LETTER,  BUT ONE THAT I BELIEVE YOU WILL FIND VERY INTERESTING.  Today, the results of this law are causing a BIG loss of income to the USVI because any charter yacht vacation with over six guests now picks them up in the British Virgin Islands - about 20 minutes away from American Yacht Harbor in St. Thomas.  ALL of those tourist dollars are spent in the BVI – hotels, restaurants, etc.  We are hoping that finally the USVI government administration will take this project on and get it repealed.  We welcome your input to these government officials by encouraging them to assist with this important issue.

To:  Governor Of The United States Virgin Islands – June 2008

Dear Governor John deJongh, Jr.

Thank you for your reply concerning the strategies to modify the “six-passenger rule”.  According to our files, the last time a position paper was written concerning this law was in 1994. The paper stated that the charter yacht industry contributed well over $100 million dollars to the U.S. Virgin Islands local economy. By 1993, the figure had fallen to below $30 million. The figure was further reduced after Hurricane Marilyn in 1995. Anecdotal evidence supports this contention. In June 1998, an article was published in the Daily News with the following quotes: Judy Knape, former director of the Virgin Island Charter Yacht League, said,  “The organization had 80 members in 1998. In 1991, the figure stood at 102, and in the mid-1980′s, it was over 204.”  Kathy Mullen, who at the time was the head of the Virgin Islands Marine Industry Association stated, “Within the last five years, the number of businesses that support the marine industry, such sail makers and those providing services to the yachts has dropped by 25 percent.”

In 2001 an official meeting was held with charter yacht captains, charter clearinghouse representatives, and the U.S Coast Guard officials on St. Thomas.  Lt. Kevin Smith of the Coast Guard Marine Safety Detachment agreed to try to identify acceptable safety equivalents to regulations concerning passenger vessels to allow previously un-inspected charter yacht vessels to obtain Certificates of Inspection, increasing the guest capacity from six to 12 passengers. Since there has been such an expanse of time since the last attempt at changing the six-passenger law, we must begin again with renewed efforts to bring this to the consciousness of the decision makers who can re-draft it in a manner that meets all the needs of those who are being negatively impacted.

Despite being designed and constructed to accommodate a larger group of overnight guests, many luxury charter yachts classified as “un-inspected small passenger vessels” are currently restricted by the Passenger Safety Act of 1993 to a six-passenger maximum while operating in U.S. waters, including the U.S. Virgin Islands. In order to carry more than six passengers on charters within U.S. waters, vessels must obtain a Certificate of Inspection, which verifies compliance with the Passenger Vessel Safety Act.

Most of the high-end charter yachts in the League cannot meet the Certificate of Inspection criteria without major structural changes, as well as some equipment and systems refits in order to comply with specs written primarily for passenger ferries and other commercial vessels.  The luxury charter yacht industry as we know it today didn’t exist on the same scale at the time the rules were written.

The inspection issue is not about just compromising passenger safety standards.  It’s about financial viability of the charter yacht industry, and the impact this law has on the tourist revenue to the USVI.  The intent is to identify “acceptable safety equivalences”.  We would like to emphasize that this is an interim step in a multi-level process that will require coordination between the U.S. Virgin Islands and Washington D.C., as well as Coast Guard officials to ensure compliance with existing laws and regulations involving licensing requirements, structural and equipment equivalents.

 The Virgin Islands Charter Yacht League would like to call for a multi-pronged approach to return the St. Thomas charter industry to a semblance of it’s former self and again become a major contributor to the revenue of the USVI:

• Negotiate with the federal government and the U.S. Coast Guard to change the six-passenger maximum rule to allow yachts to pick up as many passengers as they have berths. (Such as in the BVI)
• Allow charter yachts not based in the USVI to do a reasonable number of pickups each year without licenses. The BVI currently allows seven pick-ups each year for yachts not based in their area. This would encourage yachts working up and down the Leeward and Windward chain of islands to pick up guests in the USVI. .
• Provide tax incentives for yachts based in the USVI.
• Increased advertising of the local charter industry through the U.S. Virgin Islands Department of Tourism.  
• Have the USVI become more yacht-charter friendly for the benefit of all aspects of the USVI economy.

There are many positive,  supporting facts which strengthen the need to change the six passenger law in the U.S. Virgin Islands:

• Since 1997, the production of luxury yachts 80 feet and above has more than tripled. In 2005, there was a staggering 28% increase in new luxury yachts being built!
• In 1993, the world had fewer than 700 privately owned yachts over 100 feet. Today an estimated 7,000 large yachts are in use!
• Aside from the high entry cost of buying a large yacht, there are tax incentives and advantages to further fuel the desire of owning and providing a yacht for charter.
• Yacht chartering now tops the list of the most popular and most expensive activity for people with a net worth of more than $10 million US.
• According to a survey by Prince & Associates for Elite Traveler magazine, summer holiday spending in 2007 was up 56% from 2005. They attributed majority of the jump in spending toward chartering private yachts – most of which occurred in the Caribbean.  
• Annually, charter yachts in the U.S. Virgin Islands will spend between $20,000 US and up to $200,000 US in provisioning and fuel depending on the size of the vessel.  This does not include the added revenue to the businesses of the USVI from the charter yacht guests who book hotels, restaurants, and shop within the USVI.

The entire VICL Board of Governors is willing to work with you to assist in changing the six-passenger law. Virgin Islands Charter Yacht League mission is to improve the crewed yacht charter business in the U.S. Virgin Islands through public relations, advertising and promotion. Our members stand ready to help you and the USVI Government to restore a “level playing field” and return fair competition between the USVI based charter yacht fleet and our neighboring island/nations. We are truly appreciative of your assistance, and welcome any further questions or comments.

 Sincerely,    Shelly Tucker, VICL Secretary

Until next time…your Caribbean life-style reporter remains on duty!

From:  United States Virgin Islands Governor John deJongh, Jr.      Date:   July 9, 2008

I sent a correspondence to Gov. John deJongh, Jr. a week or so ago and asked for his input as to what his administration is doing to address the challenges of several airlines cutting back their flights to the Caribbean by 40% when tourist visits to the Caribbean have set new records last year – 15 million.  I first met Gov. deJongh at the 2007 Virgin Island Charter League Boat Show in St. Thomas where he was a featured speaker addressing the economic health of the Caribbean.  Here is his letter in response to my correspondence last week.  I sincerely thank Gov. deJongh for his, and his administration’s proactive actions in creating a dynamic economy for the USVI focused on the tourist industry who loves visiting Paradise.

Dear Mr. Walberg, 

Thank you for taking the time to share your views on what is a very important issue. As you rightfully mention, tourism numbers have been steady, in fact they have been increasing, while flight service from two major airlines serving the Territory has been cut. My Administration, in cooperation with the Department of Tourism and the Virgin Islands Port Authority, has been targeting markets worldwide with special packages and incentives to attract new and returning travelers to the Territory; this includes European and other international markets. European travelers, in particular, are encouraged to travel to “America’s Caribbean” as they are able to enjoy a favorable return on the exchange rate. Keeping this in mind, we are also working diligently with other Caribbean nations through the Caribbean Tourism Organization and the Caribbean Hotel Association to forge the relationships that enable our placement as a favored Caribbean destination location for travelers from the mainland United States and globally.

Additionally, our collaborative efforts have recently made possible the increased flight service of other, low cost airlines to the region. This added service will allow visitors’ increased flexibility in their travel plans and highlights the continued commitment of the Department of Tourism and the Virgin Islands Port Authority in working cooperatively to offer incentives for travelers to the Territory.  

Also, thank you for attaching the January 7, 2008 correspondence from Ms. Shelly Tucker, VICL Secretary.  (This was a letter addressing the “six-pack” law which is negatively impacting the charter boat industry and the tourist dollars that the USVI lose because of this outdated law.)  Unfortunately, I had not previously received this letter which responded to my December 2007 correspondence.  I have forwarded this letter to the Commissioner of Tourism for her analysis and our later discussion on execution.  Needless to say, the charter yacht industry is a key component in our package of offerings and its protection and growth is a central focus of my Administration.

Thank you once again for providing your views and for your efforts to raise awareness on these important issues.

Sincerely,
John P. de Jongh, Jr.,
Governor – United States Virgin Islands

I welcome your comments on Gov. deJongh, Jr.’s remarks.  I will pass them on to the Governor’s office.  Until next time…your Caribbean life-style detective continues to be on-duty.

This is one of the best articles I have read regarding why the doom and gloom of the U.S. housing market has come to an end – Wall Street Journal.  This will only assist with more real estate sales in the Caribbean in the upcoming months!

By CYRIL MOULLE-BERTEAUX - 
May 6, 2008; Page A23

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won’t happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.

Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.

Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what’s going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.

The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.

In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.

The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and begin to peak out in “months of supply” terms. That’s the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high – but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.

Inventories are declining because construction activity has been falling for such a long time that home completions are now just about undershooting new home sales. In a few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.

Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won’t stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.

Many pundits claim that house prices need to fall another 30% to bring them back in line with where they’ve been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons.

Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one’s income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today’s house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.

This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.

When the rate of house-price declines halves, there will be a wholesale shift in markets’ perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.

More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.

A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets’ perception of risk related to housing, the financial system, and the economy.

We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to sub-trend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.  I welcome your comments about the article and how you believe it will impact Caribbean real estate sales!  Until next time…Fair Winds!