What lies ahead for the superyacht brokerage sector is regularly evaluated by those that comprise the market, however it’s a sector that has been and continues to be slow to adapt to the fast pace of its high-flying customers. When you consider the customer journey, and all that entails, brokers are involved at every juncture so it’s key that the information they are providing clients bestows confidence in their ability to make informed decisions.
In the eyes of Roberto Giorgi, executive chairman of Fraser and panellist for 'The Future of Superyacht Brokerage' panel at The Superyacht Forum yesterday, certifications, education and nurturing the flow of information from senior brokers to junior brokers are crucial for the market's future.
“We need universities for brokerage and charter,” he said. “If I want a one-week charter that is completely customised and personalised, I want a well-trained person to provide that. If I'm going to the Galapagos, or wherever, I want the best advisor telling me where to go and I’m willing to pay any price for this value. The barrier to entry should be much higher. Certification is an issue.”
Fellow panellist, and Camper & Nicholsons CEO, Paolo Casani, agreed, adding: “We need stronger associations to prepare people for the future. There are two components to this: training the new generation of sales people, or anyone customer facing, and how we conceive the evolution of their role.”
The role of a broker now, in Casani’s opinion, is very much as an advisor – not just someone who is able to talk about boats, but the legal aspects, the values, when is good to buy and sell according to depreciation, and how an owner can offset costs through charter and so on.
Giorgi spoke of the positive impact the Cruise Lines International Association (CLIA) has had on the cruise market and how the superyacht sector should be striving to unite on a collective marketing strategy for the industry as a whole. CLIA formed as a result of three large associations based in Asia, the UK and the US, merging.
As the conversation takes a turn to the value brokers add to the new-build commissioning process, Casani recalls some research Benetti undertook during his seven years at Azimut. “The contribution margin of our yachts sold by brokers was actually higher than when we sold them internally,” he said.
“Getting the specifications right is the hardest part of building a yacht. If you start with clear specs and a clear stage plan and you can manage all the processes and help the shipyard on one side and the client on the other, it’s much better for everybody. It’s better for the client because they don’t have change-orders and it helps the shipyard with its scheduling.”
The shipyard representatives present during the session were very keen to help educate brokers on their products to ensure a seamless flow of information from the shipyard to the broker to the client. “We can’t put this all on the brokerage community,” said one gentleman, “we need to chip in as well. We want to help you because you have the close client contact.”
He continued: “There needs to be a common goal to advise the client. We [a shipyard] rely a lot on our relationships with brokers and luckily, we have met some real professionals who are interested in understanding the product and knowing our potential and what we deliver. There has to be a give and receive culture and approach to this market.”
Founder and president of The New Yachts Company, Barin Cardenas, who has been in the industry for 18 years, said that while the market has transformed hugely in that time-frame, what hasn’t is the commissions. “We’re still using 5 cent or 10 per cent, or the MYBA sliding scale, but we need to better understand what it is we are doing and how we service more and do more. We would be better off asking for money upfront to deliver a professional service, to deliver a MVP (minimum viable product).”
Cardenas stated another aspect of the process that he considers to be an issue, which is that fees are paid by the seller, meaning the builder, for a new build. “It’s a conflict of interests,” he said. “If we’re talking about how we’re going to change the trust level, and the transparency of it, shouldn’t the client we are serving be paying those fees? It’s no different to an attorney in the build or a surveyor. How do we change that?”
Ian Malouf, owner of the 52m superyacht Mischief and the recently founded digital charter booking company, Ahoy Club, interjected: “If you ask me, the future of brokerage is [a] 1 per cent [commission] for the introduction. It’s currently 5 per cent. In two years, that won’t exist. To introduce an owner to a shipyard and get 5 per cent is a joke. And the lack of transparency stops sales. Once people don’t know what they’re getting charged for, they don’t like it. This is a simple business.”
He agreed that the team of people advising the client during a new build should be paid by the client and not the shipyard. “The biggest buildings in the world are built like that and they’re much bigger than boats.”
Stay tuned to SuperyachtNews this week for further reports on the sessions at The Superyacht Forum.
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