“When I first started in yacht brokerage, you would go down to a yacht, take pictures and then go and get the film developed,” recalled Richard Lambert, head of sales at Burgess, in an exclusive conversation with SuperyachtNews.
“You would then get your specs [specifications] typed up on a typewriter and manually stick photos onto spec sheets and post or fax them to your clients.”
As primitive and nascent as this may sound, Lambert, Michael Mahan of Worth Avenue Yachts and Michael Busacca of Fraser have informed me that yacht brokerage as a general concept actually remains relatively unchanged since the nineties.
For millennials, such as myself, contextualising the impact technologies have had on revolutionising processes and shifting client behaviour is hard to fathom, but Lambert described the industry’s technological evolution as “not always quick”, but overarchingly, “remarkable”.
“In the nineties, brokers were relied on as a point of contact and a reliable source to a much higher degree than today,” Mahan explained. “Without a broker by their side, clients knew very little. What you were selling back then was your knowledge of the product, because you yourself had to go out and find it, understand it and talk about it. There weren’t a lot of boats, but without the internet, the brokers who were willing to travel and do inspections were experts.”
In terms of interacting with clients, Lambert said that, ironically, brokers actually spoke to their clients a lot more then than now, due to changes in communication; there was a lot more face time. And clients are, by all accounts, less patient today: “They used to be happy waiting three days for a brochure, but now they expect it within three minutes,” Lambert said.
“There was definitely more of a focus on wining and dining clients back then, because other communication was so slow,” explained Mahan, who recalls a technological turning point being in the form of his car phone in 1994; and then a phone pack in 1996.
"What you were selling back then was your knowledge of the product, because you yourself had to go out and find it, understand it and talk about it."
“You also had much more of a relationship with the listing broker back then,” Mahan continued. “You spent a lot of time talking to them before you presented boats to your clients. Now, someone in your office has been on the boat, or you’ve read about it online – there is enough information to present it to your client without talking to the listing broker.”
Mahan described boat shows as being a “broker’s best friend” and “the only real way of exposing multiple products to clients”. Busacca agreed: “They were crucial, but there were a quarter of the boats back then. Today, you can sit down with an iPad and flick through the yachts, their GAs and their interiors; you can show them everything they need to know. Before, you would have to inspect every boat at a boat show.”
Mahan recalled how the US market slowed down considerably at the start of the 1990s, because the United States Congress enacted a ‘Luxury Tax’ that was signed by President George H.W. Bush in November 1991. The tax was levied on goods such as watches, private jets, expensive cars, and of course, yachts. Congress enacted a 10 per cent luxury surcharge on yachts over $100,000, adding significantly to the purchase price of a yacht.
Issue two of The Wood Report, in 1993, described it as “fundamentally flawed” and “unreasonable”. In fact, it turned out that the same tax had been applied to the purchase price of a pleasure boat some 70-years earlier, in the 1920s, and had virtually wiped out the yachting market.
“It slowed the market down considerably,” Mahan added. “But, actually, the service industry did very well because people were fixing their boats instead of building new.” But, it didn’t last forever: in August 1993, it was repealed due to disappointing revenues, although the luxury automobile tax remained in effect until 2002.
That said, Busacca mentioned that his company at the time, Broward Marine shipyard, which had the largest order book in the world at the time, was still “selling boats like hot cakes”, despite the added tax.
“You also had much more of a relationship with the listing broker back then. You spent a lot of time talking to them before you presented boats to your clients. Now, someone in your office has been on the boat, or you’ve read about it online.”
With the dissolution of the Soviet Union in December 1991, the other preeminent yachting market of today that was yet to truly mark its territory in the yachting sector was Russia. It wasn’t until the early 2000s that Russian oligarchs, former Soviet republics who accumulated rapid wealth during the period of Russian privatisation in the aftermath of the dissolution, placed orders – and became known for – their appetites for the largest yachts in the fleet.
Mahan’s clients were going wherever the dollar was strong to build boats: “They were going to Australia, New Zealand and Europe. You didn’t get Asians and Russians, but over the years, as global wealth has grown, more and more regions have crept in – and regions you would never have expected back then, such as India. But the US, Europe and the Middle-East were all strong markets back then and continue to be strong today.”
For more superyacht industry throwbacks and anecdotes, get your hands on issue 182 of The Superyacht Report at the Fort Lauderdale International Boat Show next week, which marks the 25th anniversary of The Superyacht Group, and also has a US-market focus.
We will be exhibiting in the Superyacht Pavilion; stand 617.
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Image credit: Forest Johnson Photography