Challenges, Successes and the Future of Yachting: An Interview with Ocean Independence Sales Director Toby Maclaurin
On the week when we would have been at the 2020 Monaco Yacht Show, Toby Maclaurin takes the opportunity to reflect on an unusual year in yacht sales and look to the future.
On the week of what would have been the 2020 Monaco Yacht Show, Ocean Independence Sales Director Toby Maclaurin takes the opportunity to consider the future of global yachting events, the ever-changing yachting landscape and how the Ocean Independence team are adapting to a new normal. With challenging situations amidst a backdrop of uncertainty, he maps out the modifications made to ensure first class service and commensurate professionalism continue to be delivered to clients around the world.
What are the key challenges now facing yacht owners, shipyards, brokers and other major participants in the industry with the lack of physical shows and with the travel disruption due to COVID-19?
What the big yacht shows normally achieve for the industry has been a hot topic of debate in recent years. Costs have escalated and the shows have morphed from platforms to visit and gather knowledge on yachts into lifestyle spectacles and trade networking events, leading many in the yacht sales business to believe that the shows have lost their way and are not attractive enough environments for many real buyers to visit. Overcrowded and difficult to get appointments at, the shows are increasingly set up for the many, rather than the few – and like it or not, it’s only the few who are the actual buyers.
The coronavirus is giving the yacht show industry opportunity to pause, reflect and hopefully improve. The Leading Yacht Brokers Association (LYBRA, of which we are a founding member) together with the Superyacht Builders Association, the Monaco Yacht Show organisers and other leading luxury goods manufacturers have formed a task force to discuss and agree how the Monaco Show can be improved and adapted for the needs and wishes of our clients first. This is a prime opportunity for the Monaco Show to adjust and evolve in terms of overall efficiency and to benefit the luxury yachting environment as a whole. In theory we would like to see a show that, at least for part of the time, is more easily accessible and visitor friendly to prioritise the needs of the buyer, charterer and owner. Easier to park, easier to enter, easier to move around and with easier access to all the yachts in the show. The majority of our clients do not run to inflexible appointment schedules plus are easily put off by crowds and queues.
In the meantime, it’s up to the industry to prove you do not need a big yacht show to buy a yacht, and in many ways that is already happening. Once travel restrictions were relaxed, we successfully closed 14 sales in a matter of 6 weeks.
How are Ocean Independence adapting and evolving?
We have become even more personal and have dramatically increased verbal communication, not only within our owns teams with weekly rather than monthly (mostly online) meetings for key departments and offices, but also with our clients and contacts. More speaking and less writing have brought us closer together as a company and helped build stronger relationships with our clients. It is vital to speak personally about COVID-19 concerns – writing reassurances and extensive explanations ends up being too lengthy and impersonal for both the reader and the writer.
Making better use of technology, or rather using technology to supplement and enhance the human experience - as opposed to replacing it - has been crucial. For example, live virtual tours, previously almost unheard of, have proven to be a great tool to help to reduce a shortlist of potential yachts to visit before buying. Not only does this save time, but also the impact of travelling unnecessarily. Every yacht broker has been with a potential buyer who remains on board for under five minutes before it is clear that the yacht is not for them. While some are very patient and continue with a full tour, others are less so, because time is so precious. The virtual world streamlines this enormously.
Additionally, more extensive and earlier due diligence has been a spin-off benefit to selling and buying, ensuring better preparation for when the time is right to start the purchase process on an individual yacht.
It is said that when you lose one sense, those remaining become enhanced, and we have seen proof of this during the pandemic. Losing the ability to travel has improved other forms of communication and I would say that as a company, we are closer with each other and our clients than ever before. In many respects, COVID-19 has been a leveller for us all.
With the cancellation of major yacht shows this year, how do you ensure that the company still comes together as a team?
In addition to the more frequent sales, charter, marketing, and office calls, we put into place a company WhatsApp group and have really enjoyed more informally celebrating individual and group achievements. At the instigation of this new way of communicating, we gathered recipes from team members and are in the process of making these into a book. Being such a culturally diverse company, it is a fascinating and eclectic mix - not likely to become a best seller but who knows? We always write a monthly team message covering company developments, but this can be quite dry and very factual. So, we have introduced a weekly email to the company called “Friday Thoughts”, where we can engage with the team more philosophically and informally. We have covered topics from coping with lock-down and difficult situations, effective communication, well-being, and humour, to name but a few of the now 22+ special messages! This has also been a learning journey for us, as managers, to experience the feedback from different team members to the different topics and messages. Again, without COVID-19, this would not have happened.
How has COVID-19 affected the yacht sales market? Do you think the overall impact has been positive or negative?
This depends on how you measure the market. The volume of sales completed saw a drop over a three-to-four-month period, one the market has never seen before. However, the post-release bounce back has also been extraordinary. To date, in mid-September, we have sold 25 yachts during 2020 (with four further under offer) compared to a total in 2019 of 46. Even with the traditionally strong fourth quarter, we are unlikely to hit the volume of last year, however, with our business being what it is, it would not be entirely impossible to meet our original financial target for yacht sales set for 2020. What encourages us greatly is that, during the depths of lock-down, our social media engagement went up. While some of our competitors went noticeably quiet, our team focused on delivering aspirational messaging and posts. It is clear to see that we are now reaping the rewards of this, with the second week in September being the strongest so far for our digital channel sales and purchase enquires.
An informal poll of ‘why did our clients buy yachts in 2020’ revealed an interesting trend. We had thought that this may possibly be related to a need for somewhere safer to be with their families, or an element of “carpe diem” - but no – for the majority, buying a yacht was something they wanted to do anyway. While the pandemic has not made the process particularly easy, it was not seen as reason enough to halt or delay their yachting plans. The well-known benefits of yacht ownership and charter – safety, security, control of environment and freedom – seem to equally apply whether the world is in turmoil or not. Our operational yacht management has consistently seen increased value and uptake in times of uncertainly, such as the global financial crash of 2008/9, and 2020 is no exception.
What short and long-term, trends do you predict in the yachting market?
As yet, I don’t believe the new normal world has had a vast impact on sales market trends in terms of types of yachts bought and sold, but it is interesting to see a re-focusing on what many more traditional seafarers would consider to be the basics of good yacht design and build. With more conversations about range and endurance, cold and dry store capacity, tender size and an increased focus on operating independently, it is nice to see these significant attributes featuring strongly as a priority. These requirements have formerly taken a step back in importance to the latest AV systems and more of what some might say are the aesthetic features only.
Offering shorter lead times, the rise of semi-custom yachts continues with new builds, as does the trend towards a soft-explorer style. However, it is important to be aware of styling over function and, if a real explorer yacht is desired, the build specification should be very carefully and professionally reviewed.
In the charter market, there has not been such a back to basics approach, although it is good to see forgotten areas such as New England seeing a surge in popularity. The more COVID-19-flexible countries have not benefited from a new influx as much as one might think, with clients still opting to visit consistently popular areas in the Western Mediterranean where they feel comfortable.
One exception was a series of back to back charters we completed in Alaska, where families recommended this stunning cruising location to their friends, and so on. While choice and preference of location differed, the feedback was resoundingly similar, everyone had just about the best cruising they have ever experienced, which is great for our brokers to hear and great for the industry.
How has a broker’s role had to alter in these currently challenging market conditions?
We saw tough times in 2008/9 particularly, when the market became more challenging for sales and charter and where the role of an experienced broker was again heightened, with in-depth knowledge becoming critically important. This highlights the difference between being an opportunist order-taker and someone who uses their experience, initiative, and company resources to professionally facilitate the signing of a charter or purchase contact.
We work with and receive enquiries from a number of online-only charter portals and requests from them this year have just about dried up – while our own direct business has clearly picked up. Clients are understandably more cautious who they will be spending their money with and who can guide them through the more complex matter of chartering and buying in a more complicated world. We hope this is a trend that will stay, where clients can fully trust they are receiving the best advice in their best interest, and not just an empty, false promise centred around the best price and no service. We believe this should be a high priority at all times, so that clients can always genuinely benefit from the excellent services provided by a good broker.
How has the OI team responded to the ever-changing yachting landscape over the last six months?
As a management team, we have greatly admired the strength, resilience and determination of our team members. Ours is not an easy company to manage when it comes to the more human elements of business; we have relatively small groups of people in comparatively widespread locations for our overall size. Our local managers and directors really stepped up and the gestures of support and commitment from the team have been reliably heart-warming. Yes, there have been some difficult decisions to make in 2020, but the positives have far outweighed the negatives and we are looking forward to the future with quiet confidence. We now know more than ever, how much our clients enjoy and want to go yachting. Backed by our fantastic team, this spurs us on with great faith and conviction in the services we provide.
For more information or advice on yacht sales, purchase, charter or management, speak to your Ocean Independence broker or contact us.