As the autumn show season approaches, The Superyacht Owner speaks to Rupert Connor, president of Luxury Yacht Group, at how the industry deals with those it relies on so heavily for the industry’s own existence – superyacht owners.
“I think we’ve driven too many people away from the industry by greed,” states Connor, who believes that today’s technological world means the same job can be done with smaller outgoings. So why, he asks, are so many brokers still asking for the same commissions?
“We are working more efficiently today; we don’t travel as much, our overheads are lower and our FedEx bills have certainly gone down," he argues. "Right now we’re actually working on a really lovely print brochure project and that’s so rare. You don’t need to do those to sell boats anymore, whereas it used to be you had to, and that overhead would usually be absorbed by the brokerage firm, and it would cost a lot of money to FedEx out all those packages and brochures. Now the overheads are much lower but people are asking for similar amounts.”
For Connor, there is still a disappointing culture of trying to get the most pennies out of an owner. And it doesn’t exist in one particular sector of the industry but, sadly, is far reaching. “I’m dealing with a very large boat sale right now, and this boat could have been sold many months ago if it wasn’t for greed within our industry," he says. "I can’t validate and I can’t explain to my client how I deserve a two-million euro commission on a transaction of a boat – and I don’t ask for that, but I’ve had the sale fall through multiple times now because people have their hand out for that amount or more, instead of just being reasonable. I’m still saying, ‘hey, here’s half-a-million euro pay cheque for just forwarding somebody’s contact information to me’. Really, that’s not a good day at the office. Work out the hourly rate in that and I think you’ve done quite nicely.”
Connor has recently sold a yacht whose previous owner, now no longer a yacht owner, continues to be pestered by flag state representatives. “This was a really great boat to sell with an absolutely amazing owner, who should have had the most wonderful experiences in yachting," says Connor. "He’s still being hounded by flag state people who supposedly are managing the company that owned the boat, but they didn’t quite do all the paperwork correctly.” Even though the boat has been sold, a piece of paper needed for the company’s reinstatement is missing due to it being sent by the management company to the wrong address some two years ago. “The address on the letter was clearly the wrong address but they still charged a USD 4,000 reinstatement fee at closing to reinstate the corporation,” continues Connor. “I’m like, this one document was very important, you send it to the wrong address yet apparently you’re not accountable for that at all and you’re standing behind your USD 4,000 invoice to reinstate the company? That’s where we’re wrong and that’s where we need to change. It’s silly nonsense like that, that we as an industry have to be accountable for.”
It all comes down to good practice, and adapting our practices alongside the industry’s evolution. In so many ways, the industry has become more professional, and, like Connor, I believe it is imperative that the gap between professionalism, or lack of, lessens and lessens quickly. And, in the concluding words of Connor, we all must make improvements: “We’ve driven too many people out of the industry; we all have to share this responsibility.”
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