We interviewed Gary Feracota, who with his wife, Patricia, founded Pinnacle Yachts about eight years ago, and has grown the business to be one of the leaders in the fractional yacht category. Pinnacle offers a “lease share” program, that provides access to a luxury sail boat or yacht on a fixed price per year basis.

Feracota describes his typcial customer as someone that could afford to own the boat if they wanted, but has decided to spread their leisure time across several activities, such as international travel, golf, and a second home. His program provides access to a luxury boat, but in an easier, more convenient way – so less time is wasted on the ownership obligations, and more time is actually spent on the water. Some of his customers have had yachting experience, some have had none.

His program works like this:

• a customer buys a 1/10th share in a specific boat, that is moored in a one of 13 urban marinas.
• an application is submitted and reviewed so that Pinnacle is comfortable that the prospective customer can handle a boat and take care of it. About 1/3 of his customers get about 20 hours of training if they need or want it.
• a share costs about $6,000 for the year, plus a $1,000 application fee and a $1,500 security deposit – both of which are refunded after two years.
• a share provides for one full week of use, plus two weekend getaways in the northern marinas. In the south the same share provides for two full weeks and four weekends.
• if a boat is available with a twenty-four window, a member can use the boat for “free”, meaning that time will not be deducted.

Feracota says he has invested in sophisticated technology that allows for efficient matching of when members want to use the boat to its availability. Each member creates a profile and submits preferences at the same time twice a year – and the system allocates about 2/3 of the preferences in advance. This system is what allows Pinncale to accomodate more members per boat, thus reducing the cost of the program.

Pinncale has 30 sailboats across all the marinas (typically a 37 foot Jeanneau, which run about $180,000 new and accomodate four adults and two kids) and five power yachts – and the growth seems to be coming on the yacht side. Currently 100% of the shares on his fleet are sold out, so he is adding boats as members sign on.

There are other aspects to their program that seem to make sense, such as an ability for a member to trade time on their boat with another boat in the fleet at another marina. The company also works hard to foster a sense of comraderie with its members, with annual events, access to a yachting ball, and on-going training.

Like other programs, such as The YachtShare, this program is founded on the principle that owning an asset that depreciates does not make financial sense, particularly if the asset is only used a few days or even weeks a year. Feracota impressed us with his experience in the business and his focus on delivering a service that worked at a reasonable price. We hope to hear from some of his members about what they think of Pinnacle. Email us at tips@heliumreport.com if you have any feedback.