Why yacht brokers are braced for revolution

opinion

by Rob Hodgetts

7 June 2024

Brokers panel: Tim Davis, Burgess (centre).

Tim Davis (centre) listens as Chris Cecil-Wright makes a point on a compelling broker panel at Superyacht Investor London.

Antiquated industry ripe for disruption or relationship business reliant on human connections?

Superyacht brokerage could be at an inflexion point, but change might not come from where you think, according to a panel of leading figures at Superyacht Investor London 2024.

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Leading the case for disruption was Tim Davis, chief marketing officer, Burgess who said he is “constantly amazed by how antiquated” the industry is.

“The opportunity for this business to change, to revolutionise, to disrupt is enormous,” said Davis, who came to yachting six years ago via consumer brands such as Virgin, Vodafone and Red Bull.

“I don’t believe there are any other verticals out there that have the opportunity that we do. But I don’t believe there are any other verticals out there that are as slow to take that opportunity.

“So we either disrupt or we get disrupted. And I think in the next 12 to 24 months, something’s going to happen, whether that is internally or externally. It is a hugely antiquated industry with such potential.”

From left to right: Patrick Coote, Tim Davis, Will Christie, Chris Cecil-Wright.

Old ways

Chris Cecil-Wright, founder of boutique brokerage Cecil Wright agreed that the business is “fairly cottage in many ways” but suggested that his small number of clients, generally buying yachts above 60m, often prefer the traditional methods.

“One of the things I find that my clients quite like about dealing with us is that we do go about it the old way,” said Cecil-Wright, who began at Camper and Nicholsons and was a partner at Edmiston for 20 years.

“We do spend time in each other’s company. We don’t just send mail. It is that old-fashioned, relationship-driven business. So whilst I see at the higher-volume side of life, there may be ways to rev it up and disrupt, I don’t necessarily see right at the higher end of the business, when these people are used to a very, very good level of service, how that can be so disruptive. I wait to see.”

Personal attention

Will Christie, founder, Christie Yachts, suggested that at the top end of the market “it is not a binary world” where data can spit out a solution.

“There’s lots of data out there but it’s making sense of it all and explaining it to clients,” said Christie. “I don’t know any industry where the disparity between asking prices and selling prices is so big. It is a confusing and opaque market and you need someone with experience and credibility to explain that to you in person. And I just don’t think machines can do that.”

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Christie pointed to a deal he completed last year in conjunction with Cecil-Wright which was “complicated”. “It required personal attention and relationships and communication,” he said.

“There are emotions, there are egos that require massaging. It’s very delicate. You’re dealing here with people who sometimes don’t need to sell. They definitely don’t need to buy. No one needs to buy a boat. And if the environment is just a bit incorrect or something happens that just upsets them a bit, the whole deal can fall apart. That requires attention and diplomacy. That requires a broker.”

‘Winging it’

But if the personal touch is able to keep the technology at bay for now, the human element is still a variable in the system.

“One of the big headwinds I think we have as an industry is the good brokers versus the bad brokers,” said Patrick Coote, MD, Northrop & Johnson Europe.

“We are unregulated. Anyone can print a business card and be a yacht broker. Half the world seems to think that we are just sort of car salesmen that are just winging it and then earning a huge amount of money. I vehemently disagree with that.”

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Coote said it takes “minimum five years, more like 10 years” to become a good yacht broker, “on a par with a doctor or a lawyer or a senior accountant”.

“A broker should be at the top table of the client, sitting with his lawyer, accountant, tax advisor, with the same level of professionalism and knowledge and able to bring value to the discussion, far removed from the sort of chancers we do experience and do cause problems, particularly from a reputational perspective,” he said.

Customer-centric

Christie, who moved from head of sales at Y.CO to set up Christie Yachts in 2021, warned owners that bigger doesn’t always mean better when it comes to brokerages, suggesting there is a “great disparity” in brokers at the bigger companies. “You might get the sales pitch from the boss, but then get handed a junior,” he said.

READ: Edmiston’s advice, plus market views at SYI London

But for Coote and Davis, the scale of their businesses offer substantial benefit.

“What is a brokerage company? It is a bunch of guys with a rented office and a few laptops,” said Coote, whose Northrop & Johnson is part of the MarineMax group which also owns Fraser Yachts.

“So we are a service business and mainly we offer knowledge, insight and experience. And when you’ve got a sale completing every 72 hours, you’re gleaning a huge amount of information about deal-making, about dealing with problems.”

Davis added: “It’s harder to make sure that that consistency of experience is there when you’ve got more people. But I still think it is the right person on the right day. Essentially when the client says, ‘Have you sold my boat?’, they don’t give a monkey’s whether it’s 250 people or three.

“We’ve either sold the boat or we haven’t, and we may have done that through data expertise or digital expertise but being customer-centric rather than delivering great customer service, I think, is a big point.”

Bad eggs

Despite the competition, Christie suggested that collaboration is key as a broker. “You have to choose who to pick battles with, but if you are a good broker, you realise that the other good brokers don’t need to be your enemy,” he said. “We want to be on good terms with everyone, big and small, because actually it is an advantage to our clients.”

It seems that in the near term the so-called disruption may come from “weeding out the bad eggs” and “working for higher levels of professionalism” among brokers, as Christie puts it.

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According to Cecil-Wright, however, the disruption is already coming from within.

“One of the key differences between big businesses and smaller businesses like Will and I, is that we keep our overheads to a relatively sensible level,” he said.

“And obviously as businesses get bigger, you have much bigger overheads and you then need to ensure that your commission levels stay high. So keeping our costs down means we are able to be very nimble and we don’t have to charge the huge commissions that everybody else has to, so we are in some way disrupting the market.”