Market Report 2019 Opening Remarks

By Sue Grant

Wow, what a year! Guiding the Berthon bus through the byways and highways of the yacht market in 2018 required really good navigation, nerves of steel and a lot of humour!

Despite Brexit, tariffs from the other side of the Atlantic, currency shifts on an epic scale and yet more regulations, it was a great year for Berthon. We increased market share, annexed a new office (in Mallorca) with refit, service and guardiennage, and added important new yacht brands to our portfolio. The message from 2018 is most definitely that rather like Del Boy and Rodney – he who dares wins. Or more to the point – he (or she) who hesitates loses market share and relevance whilst technology and the way that people use their yachts, changes fast. Understanding the new today, is key to retaining and increasing market share for our team in the UK, France, Spain and the USA.

As with 2017, on the brokerage side of the market, good yacht listings are hard to come by. A shortage of middle aged yachts is still being felt and whilst recent, good condition and well equipped yachts are good currency if correctly priced, those that are significantly more mature and in need of work, are most definitely harder to place.

The most difficult segment this year has been the 70’ to 90’ size range where yachts are reassuringly expensive to run, need crew and a plentiful refit budget. This becomes increasingly difficult because, as these yachts age, the refit bills ramp and the residual value falls, making a relatively cheap buy an expensive business. You have to be deeply in love to opt for a yacht whose refit cost is equivalent to her buy price. She hemorrhages money to run, and all in the knowledge that on sale you will be lucky to recover even the buy price.

This year, we have sold 12 yachts off market, by placing them either before the owners were quite ready to bring them to the market, or by actively finding a yacht for a specific enquiry. These sales have to be carefully managed to ensure that all the normal due diligence is undertaken and the normal purchase process is followed. We have also been asked to help with embryonic sales agreed between buyer and seller, which judder to a halt as the hard questions and necessary paper trail rattle into view.

On new yachts, the issue continues to be delivery for those yachts in demand. Yards are running lean and do not have resource available to build significant numbers of yachts into stock. This is healthy but does mean that buying a new yacht requires more patience and in some cases, the loss of new entrants into the sport before they even sign on the dotted line.

Of course over the past years it has been clear that the way that people yacht has altered significantly; yachts are used less, in an environment where the yacht is not the only pastime of her owning family. She needs to perform in between a holiday house somewhere warm, skiing, flying, mountain climbing, golf and the rest. This means that the weather needs to be reliable, as does she and she also needs to deliver as a holiday destination. In the case of blue water cruising, it is likely that she will have been bought for the project and will be on sold at journey’s end. We recognised this trend 2 years ago and consciously increased our travel patterns to make sure that we are on top of the locations of the yachts that we are now selling. This is an imperative despite having a 4 office infrastructure.

Talking of offices, a big move for us this year has been opening in Palma de Mallorca with our all new Berthon Spain. Headed up by Andrew Fairbrass, previously Sentinel Yachting, with a successful and active service, refit and guardiennage operation, with really good engineers, shipwrights and technicians, excellent yacht valeters and experienced captains. Watch out for the white Berthon vans flashing around the ports in Palma. This new operation enables us to offer a full service for clients either buying or selling in the Mediterranean, as well as good advice and help in securing berths and getting the best out of this amazing cruising area. We already have a significant Berthon sales and guardiennage fleet in Palma and we look forward to extending this in 2019.

In the South of France we had a challenging year, but new yacht sales into this 2019 have been tremendous and we are also offering a new brand in France about which we are very excited. The Cote d’Azur continues to delight and to attract an international set of yachtsmen to its glamourous shores.

Berthon USA continues to flourish and we were delighted to add Mark Von Drashek to the team at the end of 2018. An accomplished yachtsman and very well-known project manager on larger yacht new builds, Mark also has form as far as FPB is concerned, so his hands on knowledge makes him a welcome addition to our team.

The office in the UK remains busy with the same team in place; results have been very solid this year despite the B word and whilst we wait to hear the outcome of the machinations between Westminster and Brussels we are focusing on offering the best possible service for our clients of all nationalities.

As far as new yacht sales are concerned, 2018 was a very big year. We were busy delivering new Windys in Northern Europe and the Mediterranean; they continue to be the must have accessory for those who like to drive, and the SR Windys are much in demand, especially with the new SR43 due out later this year.

The Cannes Boat Show last September saw us with 2 new brands – Pearl Motor Yachts and Iguana. Pearl are a UK company which produces outstanding flybridge motor yachts from 62 to 95 feet. Designed by Dixon and with fabulous interiors by Kelly Hoppen, they provide a stepping stone for our clients from the top of the Windy range at 52 feet. Commissioned in the UK they are bespoke and well-crafted yachts full of clever design ideas which brought awards Cannes, and later at Monaco.

We are also now working with Iguana. From France, these extraordinary amphibious motor yachts demonstrate that having the ability to come ashore does not mean that you are stuck with average and clunky performance out on the water, and that it’s OK to look cool too. With their revolutionary tracks, they are easy to use and very rugged, taking the ground without effort in mud or with a substantial swell. With two already on order for a Berthon client we are delighted to be involved with this game changing brand.

On sailing yachts, Advanced 80#2 JIKAN, launched last summer and proved herself to be every bit as special as we and our client thought she might be. Fast and supremely good looking with a superb interior, she is the essence of elegant Mediterranean sailing with the ability for serious blue water.

In the meantime, Solaris whom we represent in the UK have bought a new 44’ to the market to complement their range of capable and very funky fast cruising yachts. Their new build facility has increased their capacity and with new efficiencies, ask us about the pricing on the 44’ as you might be surprised how sparse it is…

We continue to do well with the evergreen Rustler brand in the US and the Moody marque is ever popular for their volume and ease of sailing on the Eastern Seaboard.

I feel that it is a bore to talk yet again about currency but it is driving the market totally at the moment. If you are a brokerage yacht owner be aware that once a sistership, priced in a weak currency, falls further, the value of your yacht falls to meet the new normal. We analyse carefully all the traffic that reaches our promotions and website and for sure those holding American dollars are the most frequently interested.

To add to the paperwork coming across the desk is the new IPV code which applies to the UK but which is likely to be a Europe wide effort later. This makes it compulsory to follow commercial codes when testing, sea trialling or delivering the yachts that we are selling. It even applies to an owner who is in command of his yacht on a sea trial! Of this you will read more later in this publication; it is yet another challenge and another new book of rules for 2019 to add to the load – last year it was GDPR!

By the time that you read this, it is likely that Brexit will be settled – or not! For us it is very hard to plan for hard boiled, soft boiled or indeed scrambled Brexit. We work within an international market place and we have to deal with the circumstances as these arise. Because of this, and in common with many other businesses, we already wrestle with the complexities involved with making deals in a different part of the planet. Brexit will not change this, but what it does do is to delay decision making until the outcome is known. What it will not do is to change the tidal patterns, prevent the trade winds from blowing or stop being on the water remaining an extremely good use of time.

Of course what happens with the British flag, VAT and all the rest, remains up for debate. Whilst the answer to the conundrum is far from clear, there are still some common sense steps to take in preparation for whatever the bureaucrats finally dish out.

Yacht design continues to change. Yachts are getting wider, fatter and higher. Interior design is improving every year – much to the good and many of the preconceptions of how a yacht should look internally and externally have been turned on their head. Being green is now cool and electrical drive, lithium ion batteries, solar array and the rest are developing at a rapid pace. This march of technology is all to the good and is driven also by the fact that people are using their yachts differently. Yachts today are a part of their owners’ lifestyle rather than being the activity that defines their owner… More of this later.

For a number of years, yacht search has been managed via the internet and if you want to be a successful player in the market you need to provide an intelligent and thoughtful web offering, with effective information delivery and good imagery and film. We are making a major effort with videos especially and continue to develop this part of our offering as tired, poor information and dog eared photographs taken of a yacht at launch simply do not cut it. Making the effort to deliver good information is also a learning process for the yacht broker and a buyer appreciates dealing with someone who is informed about the yacht they are interested in. Whilst we are confident that our information delivery has massively improved this year, we recognise that this is a never ending voyage and although we have some sea miles beneath the keel, there are many more to go.

All this technology has provided an immense amount of information, pictures, blogs, forums and reviews – all available at the click of a button. 99% of it is also unchecked, unedited and a large amount of it is incorrect. We go to enormous lengths to be as right as we can be. However, this tidal wave of information can be overwhelming and so it is important to gather not just the information that you are looking for but also to ask hard questions about its accuracy. Google search will find it if it has the correct keywords, but their lovely algorithms are not yachting enthusiasts and they do not check the content…

As for the rest, yellow tunics in France, Mr Trump and his tweets, hurricanes, floods and famine, here at Berthon we look forward to continuing to work with you on your yachting plans. Whatever the twists and turns of the next 12 months, the tides will continue to ebb and flow and we will continue to work hard on our marketing and understanding of the market place and to offer the advice that we believe is correct rather than what you would necessarily like to hear. With the same team in place you will continue to recognise faces, names and voices and we look forward to helping you with your yachting passage planning and execution.

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