We have interviewed our co-founders Dirk Agter and Viktor van Savooyen on how the pandemic affected the market, the current market trends, and their visions for the future.
(20 min read)
Interviewer: Daria Petrova
Co-Founder: Dirk Agter
Co-Founder: Viktor van Savooyen
Q1: How do you think the pandemic effected the yacht sales market?
Dirk: Much has been written about the effect that the COVID virus has affected the world and the leisure marine business. In retrospect, we didn’t expect such a boom in yacht sales, with prolonging delivery times as a result. Clients didn’t postpone their decision to buy a boat anymore and on the other side, the shipyards reduced their production capacity. The actual situation is that prices increase almost every quarter and potential boat buyers have to count on delivery periods of more than one-and-a-half year
Viktor: it’s quite clear that shipyards are still coping with the unprecedented price increase and delays of key components and materials for production. This is evident through their constant change in commercial policies communicated to the dealer network. This puts the dealer in a more precarious situation with greater risks and also reminds the consumer/buyer about the importance of choosing a healthy and trustworthy dealer/partner that will oversee the purchase and guaranteed the success of the handover, and ultimately be there the following year tending to the aftersales and warranties
At the same time, consumer and market interest are increasing, in some sectors escalating to heights never seen before. One would have thought that the market would react adversely to the triple effects of the pandemic, higher interest rates, and inflations, but it’s rather the contrary. Why this is, is unclear to me personally, but from a business side, it’s more explainable. In a volatile market, there are several opportunities. Some of them have been particularly active these last two years, going in and grabbing up companies for scraps that were in dire need and that are huge in the volumes of yachts being distributed through the yacht charter market. This clearly shifts power and also politics within the dealer networks representing and distributing the yachts to the various regions. The larger companies and dealers dominate the market and charge more for fewer services. The smaller and much more regional dealers, need to give more services to compete.
One would also think that the pre-owned brokerage market would take over all trade, partly that is true, with the lead times of new builds extending more than two years (or two seasons) and consumer interest dwindles knowing that you have to wait two or more year until you can expect your handover. On the other hand, our colleagues in East Asia, have more than 10 times their new yacht sales, with orders exceeding 350 yachts in one season compared to a pre-pandemic sales season of 40-50 units. The pre-owned market is filled with tricky loopholes and barriers. It’s a seller’s market.
Q2: The yacht charter market on its part has suffered significant losses in the last 2 years. Now the pandemic situation in the world seems to be under control, do you think it’s already back to normal?
Dirk: I don’t agree with the term significant losses. Of course, charter companies went bankrupt because of the strongly reduced charter sales. The big charter organization struggled to fulfill their part of the contract with their investors, but both corona-years showed a very strong charter season in the second half, not enough to make up for the first half of the year, but it showed that clients want to rent boats, certainly in uncertain times like we are in. The invasion in Ukraine has mostly its effect on the Russian clientele; they are not allowed to travel and can’t spend their money in the western world. Companies aimed at the `Russian market will have to re-invent themselves and change their target groups.
Viktor: It’s not quite clear to the consumer market (prospecting buyers) how the yacht charter market works. It’s a fiercely political environment with highly esoteric sharing of information and close to a nepotistic setting: the relationships among the major shipyards and major dealerships and charter companies are so incredibly dependent on each other that you would almost think it’s one and the same company. Partly true, with less than a handful of venture capitalist companies owning most of the stakes in the leisure marine industry. One of the last and remaining family-owned businesses, Beneteau Groupe, for example, was bought up last year, leaving that company open for a whole new direction and management that will have huge implications on the market, specifically the yacht charter market.
Most of the major key stakeholders: shipyards, dealers, and large charter companies, are not competing directly with their closest rivals, but rather trying to keep the smaller companies out and from not taking market shares (or re-distributing the purse).
It would then be surprising for the consumer to find out that most of the larger and/or global charter companies are more sensitive to a volatile market since their heavily co-dependent and leverage on operative financing with huge commitments to their fleet of yacht charter programme investors with demanding benefits and right to claim. The explanation to this requires one to look at who they have all driven the market towards only growing their fleets and sizes of yachts, feeding a charter brokers/agency network of demanding “first charterers” that only seek newest yachts, at the lowest price, during the pivotal high season weeks. If you build your business model around this, then you are bound to become incredibly volatile when the market can support your massive need for cash flow. On the other hand, the smaller and independent charter fleet operator has found it easier to navigate around market fluctuations, something we have mentioned and discussed at length in another piece.
The latest example of two major charter companies not being able to service this latest market fluctuation is Navigare Yachting and Dream Yacht Charters. Both were struggling for some time to fulfill their commitments to their charter programme holders and not paying their berths and marina fees, resulting in several incidents where they have to leave urgently and also change marinas. In the summer of 2021, both companies were saved and a new stakeholder and majority owner came into buying up the companies, creating one big stakeholder and owner of the two largest charter companies in the market. We are yet to see where this leads, as during 2017-2020, both Navigare Yachting and Dream Yacht Charter, were on an acquisition spree, not just expanding worldwide with huge investments into new charter locations, but also buying up many charter brokers/agencies and also two of the biggest booking platforms containing most of the client data and consumer data.
Q3: Did big charter companies like Dream Yacht or Navigare face big problems due to COVID? What is their way out of this pandemic caused situation?
Dirk: The large charge companies all faced huge problems because of the huge debt they carry at one side and the other the investors who they promised too much in their contracts. The business case of these companies is to purchase cheap, keep the costs low and make use of funds from either leasing companies or boat investors. Their only goal is growth, against every price. These companies were hit at all sides: they had ordered a lot of new yachts, leasing offers were postponed, charter income dried up and suppliers became more and more inflexible because of their growing uncertainty if they get paid or not.
Viktor: All of the bigger charter companies are struggling due to what has been outlined here but also because they are facing more and more competition from local and independent charter fleet operators that are becoming better and better each year and retain their loyal and satisfied community. It’s long coming and anticipated that both these companies would need an extra cash injection. Perhaps it’s for the better, that we now have a new stakeholder in these companies and they can perhaps change direction and become less of a destructive part of the charter market and not offer unreasonable discounts to charter guests, and not offer unreasonable guarantees to their charter programme holders that they can’t fulfill. Addressing this will bring back confidence again to the majority of prospecting buyers that have previously been deterred from owning a yacht for charter ownership because they have had first-hand experiences from badly maintained yachts or second-hand experience from program holders and owners.
Q4: Buying a boat is a process with many decisions to make. What are the main services Yacht-Match offers to its clients to help them overcome the pitfalls?
Dirk: Yacht-Match services are based on consultancy. And consultancy means that we stand next to our client, we are on his side in his process to purchase a yacht but also during his ownership. Because of being a spider in the worldwide web, we give our client an unprecedented overview of the market. With our unbiased advice, we create clarity in the type of yachts, in equipping to their needs, and in the financing possibilities. We explain the applicable sailing grounds, create the matching ownership program, and support them during their ownership with tailor-made yacht management. And if the client wants to sell his boat we will help him with quick brokerage results.
Q5: If we think of buying a yacht as a process or a path, which are the main steps and the main hurdles?
Viktor: It all begins with a wish to have your own yacht that gradually goes over to a strong desire, when you are already seeing yourself on its deck, holding the steering wheel and looking into the horizon… At that point you are just at the very beginning of the process with many important decisions to make and Yacht-Match will be happy to guide you through this path. The main questions you will be asking yourself are
- What is the right ownership solution for me? (The options might be Shared Access Programmes, Shared Ownership Programmes, Charter Ownership & Management Programmes)
- What is the purpose of the ownership and exit plan?
- What yacht model/type is most appealing to me?
- What financing do I need?
- What destination would I like to start from?
- What are the essential qualities in a Charter Operator that are most important for me?
This is without a doubt best described in our E-book, you should check it out!
Q6: In regards to shipyards and boats, what was the main trend in 2021 and what can we expect in 2022?
Dirk: The main trend of last year was the ever-growing demand for multihulls and this will continue in 2022. In the higher end of the market, we see a growing number of performance catamarans from mainly small shipyards. The large companies still aim at the charter market, but try to enhance the quality and look and feel onboard. There is only one independent shipyard that produces cruiser cats with above-average sailing qualities; Nautitech Catamarans. The Beneteau brand Excess is a copy of this concept.
The shipyards who build monohulls are diversifying; not only cruisers, but they try to attract all kinds of sailors. Some shipyards come with a different version of the same model, from a version with minimum equipment to a racy version (without being a race boat altogether). Others revived an old sub-brand to set it apart from the bread and butter models they build most.
The increased demand for stylish yachts with really good performance has benefitted mainly Italian shipyards, such as Italia Yachts and ICE Yachts.
Q7: In which way were shipyards affected by the COVID restrictions? How does this reflect on prices?
Dirk: The shipyards had to close their production about two years ago and had to rearrange their way of working because of the restrictions but also because of the high number of illnesses within the workforce. The result is a lower output. Decreased production numbers, together with the increased prices of almost all raw materials and equipment have driven the prices up in a manner I haven’t experienced.
Q8: The Yacht-Match team has grown this year. Have you also widened the Yacht-Match service offer? What are the main projects for this and for next season?
Dirk: Despite the restrictions, 2021 was our best year since our five(?) year existence. The mainly international clientele found our company in search of more clarifying information and service. Yacht-Match Consultancy will always be the backbone of the group and in the DNA of all companies.
We found out that several growing groups of boating enthusiasts have a different vision on how they want to enjoy being on the water; For the more environmentally conscious sailors and boaters, we have started Yacht-Match Propulsion, a company offering consultancy in and conversion to e-boating.
Viktor: Yacht-Match International is a separate company that represents the brands Nautitech Catamarans, Italia-Yachts, and ICE Yachts, all brands in their market offer exceptional good sailing qualities, attractive for yacht owners and their crew who value sailing performance.
Charter clients and charter yacht investors expect the increasing quality of their experience and we will address their demands with a dedicated company. The team running that company is experienced in the charter business and will advise charter clients, manage the Yacht-Match charter yachts and support our charter partners with their business. The company will run under the flag Yacht-Match Charter & Management
Q9: Can you tell us a bit about the most important events in the yachting industry in 2022?
Dirk: We expect that the major boat shows will be organized again. For Yacht-Match it starts with the Multihullshow in La Grande Motte, France, 20-24 April. The other important boat show in 2022 will be the Cannes Yachting Festival in September.
The shipyards will organize their own events this season and Yacht-Match will be present at the main events and organize our own local events together with selected partners. You can join the shipyard visits at the end of April, the beginning of May. You can enlist for the exclusive sailing events in Italy in June and we enjoy arranging an exclusive visit to a shipyard or inspection of a yacht if you are just before your final decision.
Q10: Which events are the most interesting for someone who is thinking of buying a yacht? Are all new yachts for this and next season already pre-ordered?
Dirk: Which event is most interesting is depended on your preferences and demands. To avoid wasting your time, Yacht-Match helps you with sorting out where to go and what to leave aside. A boat show visit can be daunting. The overwhelming number of boats and the tremendous amount of information can make you feel rudderless. If visiting a boat show should be part of your decision-making process Yacht-Match will prepare you for and guide you on the spot to make your visit most favorable.
Yacht-Match is in the center of the leisure marine. With our business intelligence, we know as one of the first where there are still yachts available. With your assignment, we can scout the market specifically to find you the right boat, even with delivery in 2023! So don’t hesitate to call us now to discuss your plans.