Business Expectations
Have your expectations from 2012 and beyond changed in the past few months, and in what way?
Alice Huisman, MD, Royal Huisman
With so many economic uncertainties we are naturally managing our expectations for 2012 and beyond. However, 127 years as a family business gives you a profound sense of perspective. Our business has never been about market volume and share – it really is the ultimate niche business.
Stefano Pastrovich, Principal Designer & Founder of Pastrovich Studio
Yes, a lot! And not just over the past few months, but since 2008. It’s much tougher than the past and everything is much more of a struggle.
Sonay Günay, MD, 777 Group
2012 will be tough from our perspective. Now that clients are more aware of what goes on in the market, they undertake vigorous research and take a lot of advice. This makes our market stronger, and it means we get clients who are more educated about our industry.
Nick Hill, Managing Director, Hill Robinson Yacht Management Consultants
The standard of professional yacht management services has improved across the industry, which is good for yacht owners. We should expect EU governments to be in crisis for a couple of years, so they will spend more time and resources taxing rich yacht owners if they can, which could be handled by industry associations, if they pull together and form one serious international body representing all sides of the industry.
Peter Southgate, Deputy Director, Cayman Islands Registry
Everyone was hoping for a lot more in 2011 and I don’t think, industry-wise, it was as positive as everyone was expecting.
John Leonida, Partner, Clyde & Co
We’ve noticed increased activity, both in the new build market and the secondhand sale and purchase market. We have gone from a slow steady pace – and due to the economic crisis – a lot of litigation, to actively working on eight new builds at this moment in time and virtually no yacht litigation. The work that we’re doing at this moment is all above the 45m mark and up to the 75-100m+ mark and certainly the prognosis is good.
Captain Eugene F Sweeney, Senior Vice-President, Yacht Operations International Registries, Inc.
We will not go back to 2007/2008 levels of activity. What we see today, for the foreseeable future, will be the future of the superyacht industry. This is probably a good thing, because the whole industry was over-hyped, over-sold and it was an unrealistic blip that we went through. My expectations have now been put on a more level point.
Kelly Miller, North America Pleasure Craft Manager, Caterpillar Marine Center
We believe the yachting industry will continue on its slow but steady path back to previously attained levels. Given the current volatility in the stock market, when combined with the latest readings on consumer confidence, and concerns over the debt of some European countries, the upswing will be delayed.
Toby Allies, Sales & Marketing Director, Pendennis
Monaco is a real litmus test for the state of the market, and Monaco this year was a lot better than 2010. The economic situation worldwide has put everyone in a very challenging position. Have my expectations changed? It’s not necessarily my expectations that have changed, but the world is changing rapidly.
Martin Baum, Managing Director, Pantaenius Group
Yes, taking in to consideration the on-going political and economic instability, I believe potential owners will remain reluctant in making that ‘luxury purchase’. Existing owners will continue to focus on operating costs and will push for alternative quotations/tenders from service providers. A quick assessment of the data available in respect of sales and purchase would lead to the conclusion that 2012 will continue to be about maintaining existing clients.
Philip Demler, Director, Demler Marine Projects
The big unknown is the situation of the euro. Several nations have been spending a lot more than they can afford. We will find out if and how the consequences of this will affect the yachting industry in 2012.
James Fwu, General Manager, Horizon Yachts
We expect the present poor economy to continue for at least another two, even three years. The current situation does meet our worst expectations. How we’ve survived is by focusing on new markets, discovering new buyers and taking care of old clients. China, Asia-Pacific and Australia have become major targets.
Charlie Baker, CEO, Consultant Marine Engineers Ltd
The market will be tight all-round; we have seen all parties look more closely into change orders and any related extra costs, on both owners’ and yards’ side during builds.
Alison Vassallo, Partner, Fenech & Fenech
We expect increased interest in the Maltese flag and in the solutions offered by our law, both with respect to commercial yachts and also to yachts intended for private use.
Kees van Doorn, Business Development Manager Yachts, Alewijnse Marine BV
The recession is still a big issue, so people are afraid to spend a lot of money and they take longer making a decision about whether to buy. Those yards that are building over 50m are still very much in demand and owners still want all the technology that they can buy and that doesn’t change. So budgets haven’t changed, but interest has.
Ian Hornsby, Owner, Techman France
I foresee the low-middle end of the market drying up again, as in 2008, due to lack of banking liquidity and fears of longer recession — double-dip is now reality. Given the 50/50 chance of the euro unravelling, this will also bring a period of great instability in new builds and refit, and uncertainty about pricing of commodities and cross-border trading.
Henk de Vries III, Commercial Manager, Feadship Holland, Koninkijke De Vries Scheepsbouw
If you had asked me in June/July of 2011 I would have been modestly optimistic about the future. The medium size category (40-75m) was not good at all, the small size (<40m), I’m glad I’m not there, and the big size (75m+) was wonderful. What has changed is that I see it is possible to make sales in all size categories, provided you come up with something special, not standard. The optimism I had for the very large projects has diminished a little. There are fewer inquiries about very large yachts than there were a couple of months ago. The middle size category is where you can still make some money. The best size is 65-100m.
Vincent Larroque, Group Sales Director, Monaco Marine
Our expectations for 2012 are being reevaluated; there has been a short-term downturn in the last few months, but we are expecting the market to pick up after the New Year.
Mehmet Karabeyoglu, Managing Director, Proteksan Turquoise
Unfortunately, our expectations have not improved and we think the European economy will continue to struggle, but the US might pick up a little momentum.
Rob Luijendijk, CEO, Amels
We have had a good Monaco Yacht Show with serious leads and are in good spirits for 2012. There still is a clear overcapacity amongst superyacht builders, and if demand does not pick up, there will be an inevitable shake-out.
Maurice Smit, Sales Manager, MarQuip
What we see is that we are getting more serious quotation requests, so based on that, things are a bit more positive.
Marnix Hoekstra, Sales Director, Vripack
Being in design and naval architecture makes us operate in the forefront of the long industry chain, and we see new designs blaze and then stand still all the time. We are back to somewhere [similar to] 2006; however, not in terms of new designs. Our expectations are rather optimistic though. In recent months, we’ve finally seen much-needed movement towards co-operation between major industry players and the realisation that we need to professionalise our marketing efforts to reach out to the world.
Chris van Hooren, Technical & Environmental Director, Superyacht Builders Association (SYBAss)
If I look back at the last year I was continually surprised that so many people within the superyacht industry had still not grasped the final interpretation of MLC for superyachts. This is in spite of the fact that SYBAss has used the superyacht media several times to explain the current status to not only the SYBAss members, but also a broader audience. Now I am focusing on the developments in IMO, which will definitely affect our industry in the long term and I can see the same lack of understanding happening again. SYBAss is willing to inform interested parties to avoid misconception of IMO topics, which are on the horizon.
Tripp Nelson, Sales and Marketing Manager, Alexseal Yacht Coatings
We are optimistic that 2012 will be stronger than the past two years, due to increased inquiries from around the globe. As the business in one region of the world slows down, there is always another region that picks up.
Stéphane Marcelli, Shipyard & Project Management Atlantic Refit Centre
The number of yachts needing refit work is still increasing; it’s a market that is a necessity and has exploded over the last ten years.
Jacqueline Lyne, Director of Yacht Management, CA Charter Division & Recruitment, Edmiston & Co
I’m much more positive about 2012 than I was a few months ago. Certainly, the industry is starting to move and the new build sector is showing some signs of recovery. This is good news for all of us, as the new build market is essential for the continuation of the superyacht industry.
Paolo A W Bianchi, MRICS, Director, MDL Italy
We don’t expect 2012 to be any better than 2011. The boating industry is going through a very difficult time, especially in the sub-50m segment of the market. We believe that the market is going to recover, but for the moment we are yet to see any clear signals of this happening. We do, however, believe that there could be some fundamental changes in terms of boat usage. Many new facilities are coming into the market, and across the Mediterranean a number of marinas are looking to the superyacht sector, offering increased services and benefits. Our analysis is that the current undersupply of bigger berths is a theory yet to be proven by the market. In effect, there are some areas where the berth demand exceeds the supply, but they are limited to niche facilities located in the heart of the most glamorous and appealing locations with existing proven demand. We believe that there is still unfulfilled capacity elsewhere
Jonathan Beckett, CEO, Burgess
We are predicting more of the same market trends to manifest themselves in 2012. In other words, brokerage! prices are likely to remain constant and there won’t be any hardening of prices for at least another 12 months. The winter ahead of us is unlikely to be a bumper season as the Caribbean still suffers from comparatively weak demand, but summer 2012 is already looking promising. One sector that is showing signs of some very welcome green shoots is new construction, which was not the case a year ago, so this is very encouraging. The superyacht business in its current state is not for the faint-hearted and you can’t take your foot off the pedal for a moment!
James Lawson, Partner, Hill Dickinson
I approach 2012 with cautious optimism in terms of new builds of around 37-40m and above. Build contracts are still being signed for prestigious projects at prestigious yards. Buyers are far more knowledgeable now than they were at the height of the market in 2007/8; they know what they want, what is available and where to get it. This is good for the yards that can meet current demand, which appears to be either for a fully bespoke, highest quality 70m-plus build where pricing is not too great a sensitivity, or a semi-customised, high quality 40-65m yacht where price is an issue.
In terms of sale and purchase, the market is very quiet indeed, and it shows no signs of picking up; I fear that 2012 will see a lower volume of secondhand sale and purchase activity than even the recessionary years of 2009 and 2010. The optimistic view that banks were about to start lending again has not materialised, and it will continue to be difficult to obtain finance in 2012.
Nicholas Stark, Senior Naval Architect, Hanseatic Marine
Not really, because given the work we do is [part of] a long process, so there are no surprises with projects that look so far into the future. In terms of the industry, it depends how long the lingering economic scepticism goes on for. I don’t think there’s been any seismic shift in financial markets, it’s just nervousness and the effects of that. To quote Churchill, “I am an optimist. It does not seem too much use being anything else.” I would expect things to improve… slowly.
Stephen Birt, General Manager, Svitzer
I don’t think they’ve changed at all, to be honest. As a new business in the market we’ve got a budget and a business plan and so far everything’s working to plan. As with any market entry it’s a learning process, you’re learning what is different about this market compared with your existing markets. We had conversations at GSF about things like the ultimate in engineering design and intelligent design in yachts and also things like transparency and the dealings around yachts, that’s good, but for me, one of the most important things we’re missing here is the competency of the operators, managers and crew. It’s all very well building the finest yacht, but if it’s not run correctly it’s a disaster.
Market Evolution
What needs to change in our industry in order to encourage, educate and attract more new buyers into the world of superyacht ownership?
MaryAnne Edwards, CEO of Australian International Marine Export Group
We need to better educate prospective owners, their captains and management companies on what Australia has to offer: world-class tradespeople, world-class facilities, etc. We need to break down the distance/remoteness barriers and perceptions that scare clients away from making the trip to cruise in the Asia Pacific region. We are working closely with our government and tourism sector to support the superyacht industry and remove barriers to chartering, which would make coming here easier.
Sonay Günay
There are consumers, customers and clients, and clients need to be given more attention. We shouldn’t present them with more technical problems than they want to hear; we should show them the lifestyle of yachting.
Stefano Pastrovich
People need to relax more, sit down and see the bigger picture. The industry is so congested and has grown a lot, in terms of size — and, like they say, ‘size does matter’! With few orders available, the market is very stagnant.
Nick Hill
‘More fun, less hassle’ has to be the message going out to all clients, so it is the big companies in brokerage and management that have a responsibility to promote that message. We have to make sure that everything is taken care of for the owner in a thoroughly professional manner. Crew training is important, because for an owner to have fun they need the right crew. Also, the industry has to get away from the image of tax avoidance. Most of us working in the industry (shore-based) pay tax, so why certain yacht-owning clients aren’t paying tax on their yachts remains a mystery to most authorities and officials. We can predict this will change and will be more harshly regulated.
John Leonida
A greater understanding of the value for money that owners can get, so that people feel they are properly spending their money and that potential owners feel that they are engaging with the designers, the builders and the project managers in a way that gives them the yacht they want.
Mohammed Khan, Managing Director, Superyacht Interiors, New Zealand
We appear to be focusing too much on specific countries and specific types of owner. This can become insular and will detract from the collective need to increase the size of the overall cake. We can’t rely too much on existing clients (only from a replacement-cycle connotation and I’m not for a moment suggesting that we do not service them); we have an equal and, perhaps, a more important responsibility in growing superyacht ownership in emerging markets, such as China.
Peter Southgate
We need uniformity in the approach to regulation, and I’m not just talking about the Large Yacht Code, but any sector of the market that is regulated needs to have greater uniformity, clarity and standards throughout, so that when new buyers are looking at the market they are not confused or put off.
Alison Vassallo
Owners are increasingly seeking to make informed decisions on the options available to them with regard to tax solutions and finance structures. Offering streamlined, minimum-fuss one-on-one solutions is one way of attracting more owners to an industry that, essentially, is one associated with pleasure.
James Fwu
I think instead of educating or encouraging new owners, we have to listen more about what the client really wants and what they are thinking. So it’s actually more about them, the clients, educating us. This is a necessary approach, especially for Chinese buyers. Most western-style yachts, media and advertising just offer them a window to the yachting world through western eyes. It will be a long process to get the Chinese into the ‘yachting lifestyle’, and they may ultimately develop their own yacht style in the long run.
Alice Huisman
Internationally, we have to understand that we are foremost an industry. Nobody gains if we lose a potential client to cattle ranching. As we are trying to do with SYBAss, we need to understand that the goal is get a new client into our industry. The first goal is to marinise that client and the second and more important goal is to keep that client in yachting. A happy client is an ambassador for our industry.
Carlos Vidueira, Vice-President, Rybovich
Our industry needs to commit itself to improving the overall superyacht ownership experience. This will only occur if we achieve greater cooperation between all segments of the superyacht industry toward this common goal. Once the total ownership experience improves, the new owners will come.
Joe Degabriele, COO, Transport Malta
The initial investment required to own a superyacht can be lowered substantially through modular and series building, which still allows for a level of customisation, and gives owners better value, as well as affording the yards a safer profit margin. There is a need for lower operating costs through more efficient propulsion and engineering systems, employment of cost-conscious, professional and well-prepared crew and a more structured approach to the management of the boat. In addition, it is important that all key players take a firm stand against bad practices by ensuring that their respective companies are not in a position to pay commissions that are not declared or accountable.
Philip Demler
We need to illustrate the wide range of opportunities that owning or chartering a yacht offers to a wider clientele. At the same time, we need to be honest about the costs involved, and prevent disappointing surprises to owners by providing detailed information upfront.
Technical failures on yachts drastically reduce the fun of ownership. We can reduce these failures by making onboard systems only as complex as they need to be. Maintenance is another important factor affecting this, but if we can reverse the trend to the ever more – and often unnecessarily complex yacht, it would be an evolution and not a backwards step.
Ian Hornsby
There is a plethora of companies of all sizes all chasing a fairly small pot of gold, and all are very good at presenting and spinning their wares to a naive, inexperienced set of buyers. Compliance issues have given the industry the excuse to establish layers of bureaucracy that were not the norm, even 10 years ago, so the industry presents itself as a very complex place to enter.
Norma Trease, Director of Sales & Marketing, Salamanca Group
We all need to work on our professionalism, to attract increasingly savvy owners into our yachting microcosm, by showing them the joys of yacht ownership as well as the honest realities regarding costs and responsibilities. A knowledgeable owner is a happy owner.
Kelly Miller
There needs to be a greater level of transparency. The costs associated with the ownership of a yacht can be a challenge to understand and to manage. Frequently, these costs are not well defined, and can vary dramatically throughout the industry. Our industry could benefit through greater standardisation, in terms of describing and pricing needed services. By more accurately defining the costs of yacht ownership, [we] could attract new buyers. Our industry should also concentrate on developing customer service programmes and procedures that minimise yacht downtime and owner frustration.
Charlie Baker
Brokers fees reduced, fewer shows and exhibitions, and the ones that remain should be of a higher quality; for example, Monaco could also include a METS-type add-on.
Toby Allies
Events like the Global Superyacht Forum (GSF) and having opportunities to discuss and bring people together to work collectively is a key way forward. The activities that SYBAss and national trade bodies like Superyacht UK undertake are vital and we have to find ways to make the route to market, whether through charter, new build or brokerage, much clearer. There’s a lot still to do but we are getting a lot better.
Captain Eugene F Sweeney
I think more seminars like GSF to attract owners would be good. Owners need to understand our industry better and there needs to be more education. Everyone, from the broker to the captain to the builder to the designer, needs to have a continuing understanding of what is going on. The word ‘transparency’ is used a lot and that’s a good aim, but really we need a better-educated consumer.
Dick van Lent, Director, Feadship Royal Van Lent
People have to focus more on lifestyle in order that clients understand what they can do with a yacht. Rather than saying ‘here is the product and you can buy it’, show them what they can do with it. This is particularly relevant in the emerging markets where people know what ships are, but do they know what yachts are and what they can do with them? The answer is usually ‘no’ in most cases.
Remco Immink, Director, Ciris Capital
More finance would help. Of course, not every yacht owner finances his yacht, but one way or another he has to free up some liquidity to purchase and maintain a yacht. I have spoken with a lot of owners who have become frustrated with the management of their yacht and also frustrated by unforeseen costs and regulations that may have been in place in for many years but they were unaware of. I think more people will go from ownership to chartership.
Martin Baum
I can only comment from an insurance viewpoint. I would echo the sentiments of GSF and the need for a form of governing body – a standard for the industry. Clients need to be confident in the service providers they have chosen and be assured they have the necessary experience, credentials, reputation and financial security. Owners would have conducted this level of due diligence in any of their business activities.
Kees van Doorn
It’s a difficult question, as the people who buy yachts live in a different world from us, so it’s hard to understand what they want. A lot can be done with marketing, but these owners and potential owners do not like to be the centre of attention and they hide away and make their own decisions.
Henk de Vries III
As an industry, we need to be more creative in how we approach the market. In many ways, we are trying to reinvent ourselves, our presentation and also to re-invent the product, and that is going on as we speak. We’ve been presenting annual concept designs for the last five years and these are a good way of showing owners the possibilities.
Vincent Larroque
Designers and builders have to face new challenges and come out of their comfort zone, as a lot of new potential buyers are coming from countries that were never really yacht owners in the past. The industry has to adapt to new cultures, new tastes and needs.
New buyers also need transparency, honesty and guidance, not short-term gains from some sections of this industry that upset them and put them off.
Rob Luijendijk
Build excellent quality yachts, deliver them on time and deliver great after-sales service.
Captain AJ Anderson, Managing Director, Wright Maritime Group
The industry has been fairly successful in reaching out to new potential owners and charterers. We will need to build on those successful outreaches. The trick is to keep industry’s existing clients in the market. We must focus on professionalism and industry governance.
Ken Hickling, Global Manager, Awlgrip
As an industry, we need to recognise that we are not competing with each other; we are competing with the other leisure and lifestyle options that wealthy people have. When enough of us have made that transition in perspective, we will start to put more time into working together for collective benefit.
Maurice Smit
People don’t know the superyacht industry enough — we need to improve the level of exposure of the industry. To quote Einstein: “Insanity [is] doing the same thing over and over again and expecting different results.” So you have to change something. First, you have to find out what these people do with their time: where do they go, what do they read, which websites do they visit? Through that you can target marketing and also understand how they might want to use a yacht.
Mehmet Karabeyoglu
Educating and selling to new buyers may be possible for smaller boats such as those below 25m. The wealthy don’t need [to be] educated to buy a superyacht. If they have the money and like being on water, and are not worried about showing it, then they will buy a jet and a yacht.
Chris van Hooren
Do not upset owners by making them afraid of upcoming legislation — we need to educate owners, not scare them off. In the last year it was said that owners were hesitating to order new yachts because of pending legislation such as MLC, which was correct two years ago, but for some time now the situation has been sorted out. This message was not conveyed to owners properly and caused their hesitation to buy, and it’s likely the same thing will happen all over again with issues like emission requirements, greenhouse legislation, etc.
Henk Dreijer, Commercial Director, Marina Barcelona 92 (MB’92)
A yacht is no longer just a luxurious ‘floating house’; it has to become a positive investment that will be useful either as part of the owners’ business and/or enjoyment.
To attract new buyers, it is important to keep in mind that most of them are looking for a personalised yacht. The industry needs to adapt these requirements to their values and make sure the clients are satisfied with what they obtain. Their positive experiences will be the best promotion for the superyacht market.
Tripp Nelson
Our industry is based on pleasure, and if the yachting experience is not pleasurable then we will lose clients and we will not be able to attract new ones. It is the responsibility of everyone in our industry to act like ambassadors of yachting, promoting what is good about yachting. If an owner has a pleasurable experience with his or her yacht, then he or she will tell their friends, who then may want to have the same experience. On the other hand, if owners are not told the truth about costs, delivery dates, crew issues or any other potential hurdle then their expectations will not be met and they will be disappointed. We all understand disappointment, and if we are disappointed often enough we take action to avoid that feeling in the future.
York Ilgner, Head of Project Department Yachts, Blohm+Voss Shipyards
Buying a yacht is an emotional matter. Building a unique yacht is a question of trustful partnership. Designers, owner representatives and the project teams need to team up to transfer the expectations and wishes of the owner objectively to the project. The industry should prove diligence and reliability to the benefit of the owners.
Stéphane Marcelli
Give owners a full range of information on the industry. Transparency is a good idea, but it’s probably very difficult to achieve across every aspect of the process. If potential owners want to buy a yacht, they should be given the information that allows them to make their own mind up in an educated way.
Jacqueline Lyne
Buying a yacht is impossible to justify in cold business terms, so particularly for a first-time owner considering making the emotional leap into yacht ownership, both yacht brokers and yacht management need to build relationships based on trust. To draw in new business, we need to be looking at all the new markets, particularly in emerging economies such as China, India and Brazil. With such a variety of cultures, we will also need to use a variety of approaches to attract new owners into our industry. Nobody needs to buy a yacht, so we need to understand all the factors that might encourage them into yacht ownership. The charter market, as the main window into the superyacht experience, can be a vital first step towards yacht ownership.
Thomas Hackman, Segment Manager, ABB Marine
Contrary to commercial ship operators, yacht owners seldom build their vessels to serve a business case – except, of course, those who order yachts for charter. The time it takes to build a superyacht must hold people off to some extent from going down this route, so familiarising wealthy people by developing the chartering end could be a step in the right direction.
Paolo A W Bianchi
Like any expanding market, the product offering needs to be made more available. The whole process of purchase and maintenance, where the boat is kept and the requirements of ownership need to be simplified and made more accessible.
Owning a superyacht is an expensive business, and prospective owners need to be reassured on matters such as the charter ability of a vessel, security, taxation, crew etc. We have watched owners start with smaller boats and steadily increase the size of their vessels over the years, as they feel more confident in the yacht-owning process. We need to work closely with owners, captains and yacht management companies to provide facilities tailored to their needs.
Jonathan Beckett
It would help to be able to increase the volume of charter days booked in a season or a year for yachts in order to present superyacht ownership as a commercially attractive investment for newcomers. This will inevitably mean looking at some fairly radical changes to charter rate levels and structures to attract a wider audience. The potential in these new markets is extremely exciting, but a long process of education is required before any real business will result.
Stephen Birt
I think sometimes in this little market, people are missing the point. People don’t buy yachts, they buy an experience and you can have the nicest looking yacht, badly run, and it’s a disaster. You can have a yacht that’s not so expensive, well run, well maintained and maintaining its asset value with a really competent and happy crew. It’s not about building the ultimate yacht, it’s about operating the ultimate yacht. It’s all about people; you’ve got to train them well and keep them happy because they provide the experience
Alexander Murbach, Sales Director, Lasersec Systems AG
Yacht security needs to be discussed more. Piracy, for an example, is a big problem; yachts aren’t excluded from that. Some yachts might just avoid places, whereas a container vessel can’t. Some yachts will have exposure to pirates, or robbers, not just in the Gulf of Aden but all over the world. There’s an educational need to let the industry know non-lethal deterrent solutions, a lot of people still don’t know what yachts can be equipped with. All the major shipping companies for the past years have been doing a lot of research to find the best equipment and yachts designers and system integrators should do the same.
James Lawson
A need for the industry to work together to narrow the gap between buyer and seller expectations, so that buyers realise that, in most cases, decent yachts are not available at any price, and sellers take a realistic view of the current value of their yacht. Also, more specifically, I would like to see refund guarantees becoming the norm, rather than the exception for new build contracts —partly to provide buyers with better protection and partly to entice the banks back into pre-delivery financing, albeit on a more sensible basis than before.
Marcel Onkenhout, CEO, Oceanco
Ensuring integrity: potential owners are often beset upon by the entire industry, everyone wants a piece of a high net worth individual, so there is often a lot of negativity. Owners are told horror stories that make them fearful of everyone and thus gun-shy. It would benefit the yachting industry to come together to extol the virtues of the yachting lifestyle, not the pitfalls, drawbacks and lack of integrity. We could also do with more independent, reliable and honest (good and bad) information about the industry, the yachts and the services.
Nicholas Stark
Discussion from some at GSF about the old-guard shipyards and how anything else is inadequate was interesting. That opinion was a reflection of the differing perceptions of the history and the quality of yachts, which may not necessarily be based on the value of the boats, particularly with the emerging yards. Think of the Taiwanese electronics industry – a couple of decades back, ‘made in Taiwan’ was considered slightly derisive. Now ‘made in Taiwan’ for electronics is a sign of quality. I think the expansion of borders and expectations will be good for the market, be good for owners, may put pressure on established yards and provide opportunities for the start-ups.
A Better Future
If you could change one thing about the superyacht industry, what would it be?
MaryAnne Edwards
Reinstate the shipbuilders bounty within Australia, or a similar scheme that other countries have in place which would put Australian yacht builders on an even keel with the rest of the world
Marnix Hoekstra
Make building cost less and lead times shorter.
Sonay Günay
‘Secrecy’ is a key word. There are so many things in our market that are ‘confidential’ and yet everybody knows about them! Brokers, shipyards, designers, lawyers, everybody; we all love our job, but don’t respect it. Nothing is ever kept confidential. Why? It boosts our egos to let everyone know what we are doing. If we behave like this, how can we expect our industry to improve?
Nick Hill
United efforts, leading to fewer boat shows, seminars and forums.
John Leonida
For it to be more international and less parochial.
Mohammed Khan
I would bring about better business discipline into the industry in three key areas – governance, structure and management process. This, over time, will deal with issues such as code of ethics, as it will send a clear signal to all potential owners, charter industry and others as to who they should focus on to maximise value. This will ensure the best service to clients and will separate the good, long-term players from the cowboys.
Peter Southgate
We as an industry need to sell ourselves, be more positive and gain respect for our contribution to the global economy.
Alison Vassallo
There is scope for governments and the industry to work hand-in-hand in improving relationships between administrative authorities in the various port states, service providers and superyacht users. It must be recognised that by their nature, superyachts bring substantial input to the revenue of the countries they choose to visit.
James Fwu
I would totally change the flag and class rules, because they are killing the industry little by little; today, they are just way too much. Rules for commercial and navy ships may be necessary, but they are not built for fun. In the case of yachts, those codes are simply killing creative ideas and the fun.
Alice Huisman
We build yachts not ships. They both float and transit oceans. We need to be proactive about EU and international regulations that make them appear as equal. If we don’t, then the future client will indeed buy his cattle ranch instead of a yacht!
Carlos Vidueira
If we could significantly raise the level of professionalism throughout the superyacht industry, many of our current challenges would be overcome. There is simply no place for unprofessional behaviour in a €23 billion industry that services the ultra-luxury segment. The unintended consequence of tolerating unprofessional behaviour is the restriction of our industry’s ability to grow and prosper.
Joe Degabriele
Inject a dose of realism and level headedness at all levels. Some of the crew, captains, managers, brokers, yards, service providers etc, have forgotten that our industry is a very demanding one, which necessitates an extraordinary effort in order to be successful, and that, unlike other industries, becoming very rich quickly is short sighted.
Philip Demler
Facts should play a larger role than perceptions.
Ian Hornsby
Consolidate the suppliers into a smaller group of more professional, but still competitive, players, with a firmer set of technical standards, in order to provide a barrier of entry to the new small hopefuls, who lower standards and lack longevity. This is likely to happen naturally during the next dip. Some players will be forced out of the market, probably forever.
Jens Meyer, Owner/Director, Koelln-Jacoby
Set maximum commission levels for brokers or sellers, to be established through/by their own community. Get away from the market prices quote to an open book system for builders, within maximum price range. In addition, detail the specifications to a maximum to allow fair competition between builders and achieve the best result for the client.
Thierry Voisin, Chairman and Fiscal, Maritime & Customs Advisor, Thierry Voisin
That this industry be less fragmented and more organised; we need to speak with one voice.
Norma Trease
That there be more cooperation and opportunities for complementary yachting businesses to work together to attract new owners into superyacht ownership. Also, it would be great if we could work together as an industry to promote the ‘fun factor’ of yachting: interesting new destinations, regattas, exciting water toys; even chartering presents excellent opportunities to help owners enjoy yachting in very personal ways.
Kelly Miller
An association made up of superyacht builders whose charter would be to establish a superyacht academy to focus on the development of a curriculum specific to the needed disciplines within the superyacht industry, such as captains, mates, engineers, hospitality managers, etc. The certificate or degree would be recognised as an endorsement from the superyacht builders of the skills and knowledge obtained by the graduates, as it relates specifically to the yachting industry. A critical aspect of this training would include an understanding of typical yachting practices, as they vary from region to region throughout the world. Getting ahead of this curve will have a positive impact, as more and more superyacht owners are located within the emerging markets of the world.
Charlie Baker
All parties involved with new builds should have a certain level of knowledge and experience, and an owner’s representative should be from a background reflecting his or her position.
Toby Allies
I believe we need to improve the level of transparency within the industry in all areas.
Captain Eugene F Sweeney
I can’t answer that, because I think the industry will change itself the way it needs to be changed. It is mature and intelligent enough, and by evolution, it will evolve into what it should be. You don’t need revolution in the industry, you need continued evolution and this will bring the industry to where it wants to be.
Dick van Lent
The level of service in all aspects of the industry, whether the supply company, the service company or the crew and their appreciation towards the owner for their job, needs to improve because that is what creates the industry: a happy owner stays in the industry and boosts the industry. Invest in training and know what to do and what not to do, and learn about business ethics. In particular, crew need to be careful about the confidentiality of owners; ‘secrecy’ is a key word in our industry because our clients – at least the majority of them – hate to be made public.
Remco Immink
That people say what they do and do what they say, and become more professional and transparent. Let’s get rid of people who don’t intend to follow that aim. That would save a lot of time!
Martin Baum
There are lots of things I would change, although perhaps the best place to start would be at the industry’s roots. Some companies have already taken the initiative to work with schools, colleges and universities. By opening the doors and highlighting the career and lifestyle opportunities attainable, we will have a new flow of professionals, which can only lead to a more positive experience for existing and potential owners. The industry, in general, has a responsibility to coordinate and drive such initiatives.
Kees van Doorn
I would bring in more automation and intelligence into the yachts. There needs to be knowledge systems and expert systems to make the yachts safer. Because so many yachts leave port, the people onboard must be experienced in handling the yacht, and I would like to assist them more with increased use of automation.
Henk de Vries III
I would do something about the brokerage side of things to clean it up and make it more transparent, like a proper business. It should be very clear how much money is being spent and on what. It’s so easy to get compromised in brokerage, it can taint the whole ownership experience and it’s a real issue for me. I think this will change slowly because the whole world is becoming more open through things like the Internet, and so it is harder to hide.
Vincent Larroque
It would be comforting for new buyers to know that they have the luxury of choosing the birthplace of their new homes in attractive areas of their choice. Having the freedom to choose the location of their yacht’s birth is becoming almost impossible, as the industry is growing and dock spaces are becoming more of an issue.
Captain AJ Anderson
A code of business practices and corporate governance is imperative. Our industry has shamefully ignored the simple and mandatory requirement to endorse a code of conduct for professionals and a governance process for business practices.
Ken Hickling
Stop thinking you are busy. This is daily life. Work out how to find 15 per cent free time in your ‘busy’ day and allocate this to working with industry colleagues on a project or programme that will be helpful for the next few years rather than the next few months.
Maurice Smit
I would like people to fully recognise the impact of a superyacht. When you attend the launch of a yacht, you see all the people who were involved in the project and you realise what a huge number of people that is, and behind every person is another person or a complete family, and that is all from one yacht and one owner. This is a message we should get out to the world more.
Mehmet Karabeyoglu
Reduce the number of shipyards, so we all make a little money. VAT issues need to be explained professionally, but with different combinations and permutations; such as European resident with European flag, European resident with non-European flag, non-European resident with European flag, etc, and the above should be considered whether the yacht is commercially or privately registered. There are also other leasing schemes, temporary importations, and so on. One other issue could be different levels of MCA below or above 500 gross tonnes and unlimited and short range, and, of course, private versus commercial use.
Chris van Hooren
I get upset by the attitude of some designers, who think that designing a yacht is only designing a thing of beauty. Designers have a very important role to play in our industry to bring new vibrant ideas into the market, which drives our industry forward. However, yachts are also very complicated pieces of machinery, and naval architects and marine engineers should also play a more prominent role in the early stages of yacht design. You see designers who haven’t a clear insight into technical constraints and complications and the costs involved. Having said that, I’m a naval architect, so perhaps I’m biased!
Henk Dreijer
Ensure transparency and ethics in the industry: we need a stronger commitment to professionalism by all parties within the industry in order to ensure that we are perceived as a serious industry with a serious product and services to offer. We also need to differentiate between the professional players and the opportunists within the sector.
Tripp Nelson
All parties involved in a new build or major refit must understand that if a process is rushed beyond its designed capabilities then there is a high probability that some aspect of that portion of the project may suffer. For example, the exterior fairing and painting process is often rushed due to delays in the build schedule because of order changes, weather, delivery times or some other factor. Typically, the contracted delivery date does not change but the time allowed for fairing and painting the yacht is compressed. This compression often leads to decisions to paint larger areas than originally planned in order to make up time. It also leads to shorter cure times for the products because the applicator must ‘hurry up’ to make the delivery date. Everyone involved with the project needs to work together and respect the other trades that are involved in order to deliver a finished yacht that meets and exceeds not only the owner’s expectations but also those of the people who contributed to the project through their respective trade. Improving communication and an understanding that rushing a process can lead to costly rework later on will increase owner satisfaction.
York llgner
The client and the realisation of his dream should be the aim of all parties working for the project. Only the people who add value to the benefit of the owner should be involved. This simple rule reduces the complexity for the owner and yard and saves money.
Jacqueline Lyne
I’d like us to be looking outwards rather than inwards, which we do too much. We’ve gone down the road of professionalism and improving standards, but we need to look further afield to encourage more people into the industry and avoid being seen as a ‘closed shop’. For crew, who we are all largely dependent on, there needs to be a real focus on how we engage new crew. We need to continue to raise standards and make yacht crewing a career to be proud of. Overall, the industry needs to be less driven by the ‘we’ve always done it this way before’ mentality, and to be more open to creating and seizing new opportunities. We would be well placed to stop thinking of ourselves as ‘different’ or ‘special’ and apply some sound business practices to our respective sectors of the superyacht industry as we move forward.
Thomas Hackman
Adding some professionalism into some of the design and construction processes, by adapting methodologies from the best in class in the commercial shipbuilding sectors – for instance, in order to shorten the construction time of a yacht by one to two years. Having said this, we have seen tremendous development in the last few years. Exterior and (even) interior designers actually understand the conflicts and limitations of naval architecture; and commercial shipbuilding in many areas is still far from perfect.
Paolo A W Bianchi
Make the relationship between the boat owner and the yacht management companies clearer from the perspective of a marina operator/owner, and define their true functions.
Jonathan Beckett
Clients should choose their brokerage house with care, and the trust element must be a driving force in the relationship from the start for a good outcome to be achieved for all involved.
James Lawson
Harmonise the VAT rules: exempt commercially operating yachts from VAT and specify what constitutes `commercially operating’. Ensure the industry understands and complies with the requirements. Clarity and transparency from without, to mirror the requirement for clarity and transparency from within.
Stephen Birt
There is more to the yachting experience than just building and selling a yacht; there is the ongoing operation of it that can make or break the owner’s experience of the industry as a whole. You can have a beautifully built yacht from a good yard, with a very reputable broker; you can then hand it over and if it’s poorly managed, the interface between the crew, captain and the representation is not well done, the maintenance is too high because they’re not doing it properly, with bad refit periods that go on too long and cost too much, then the whole thing is spoiled and the guy leaves the industry and tells all his friends how bad it is.
Alexander Murbach
The problem right now is, when a yacht is already in operation it seems to be more cost-sensitive about purchasing additional equipment, so the solution would be to plan to have [security] equipment installed in the process in building the yacht. If you’re spending €50-100 million, spending €50,000 on a defence solution is nothing. So the designers should already start off building in deterrent solutions because they’re available and useful.
Nicholas Stark
Generally speaking, there’s not as much boundary pushing as there could be. It’s been said that reasonable people will never change the world, because a reasonable person will see the futility of it, so the world is in a sense defined by the paradigm shifters, the ‘unreasonable’. But owners who don’t accept the norm say: ‘Let’s push the boundaries’, and the shipyard replies: ‘They’re boundaries, they won’t be pushed’, to which the owner replies: ‘I’m paying the bills, let’s push!’ and the yard must say: ‘OK, let’s try’. Ultimately, you get a result that’s somewhere between the norm and pure art; that is when the interesting projects come about.
This article originally appeared in The Superyacht Report.