COVID-19 and The Yacht Market

By Sue Grant

The start of 2020 was another year for the Sales Group, and our main concern was the handling of the Brexit situation and dealing with VAT, RCD and the rest. Wuhan and the problems there were white noise and seemed very far away.

covid-19-and-the-yacht-market-1.jpg

It wasn’t until March that it became clear that this awful pandemic was closing in on our part of the world. The Berthon Group established a task force as it edged ever closer to us and events moved so quickly it was hard to keep up.

By the end of March our world was upside down. The Berthon Boat Company, the beating heart of the Berthon Group, was closed with over 100 skilled craftsman on furlough. The UK, and French offices were working from home, and the USA and Spain looked to be going the same way. Only Sweden continued, with worries about international business but open.

covid-19-and-the-yacht-market-2

For the Sales Group, our world stopped turning and we resorted to Discord, WhatsApp, Teams, Zoom and the rest, as well as the old fashioned telephone.

Our priority was to deliver the new yachts that we had on order, complete the sales in progress and to come up with a plan to market and sell our clients’ yachts in the future as well as those in production but not yet sold. It was a very strange time. Early spring turned to early summer, and a new normal, as for most of the rest of mankind, was upon us.

As the summer approached, governments around the world seemed to get a grip on things and restrictions lessened, the dreaded R number fell and for us all there was a chance that the world might again, start to turn. And so it did, and we all took the first cautious steps towards normality.

For the yacht market, those tentative steps turned into a jog and then to a sprint as yacht owners reclaimed their yachts, went sailing and motor yachting and revelled in the joys of being out on the water with all that this brings. Not only was it healthy, it was fun, and most of all, a yacht offered an escape capsule against this frightful disease. A comforting place where families could spend time isolated from this awful threat.

The marinas in northern Europe, the Mediterranean and the USA quickly filled, owners decided to trade up, new yachts became the thing to order and buy for the earliest delivery possible.

In our industry there has been concern for a number of years that not enough new entrants were coming into the sport. It was thought that sailing was a hereditary sport and would die out. The new generation of yachtsmen weren’t buying, they were renting and there were serious worries for the future of the yacht sales business in all segments. This, at a time when there were many other fun things to do with our leisure time – holiday houses in exotic places, action holidays of all types, flying, golf and experiences that could be rented providing memories and with none of the carrying costs that a yacht owner has to put up with year on year.

COVID-19 changed all that. Experience holidays, safaris and all those exotic locations were off. Owning your own secure area that could move, and be fun to cruise with and which could take you to tremendous places was in. The pendulum had swung.

Our sales curves in all offices recovered the March dip and by September they were almost vertical! New yachts were hot, brokerage yachts almost too hot to touch and there was no sign of the trend tailing off.

We saw Cannes, Southampton, the FLIBS cancelled, and yet the clients continued to want to buy. We closed 3 sales on Christmas Eve. The traditional shut down prior to a Christmas holiday that throughout Europe at least, slows the market, and the business world (in fact anyone not purveying Christmas goods) did not happen……

Of course by the time that we came through Christmas, COVID-19 was once again in charge, and the whole world had only a very muted celebration. And so here we are again, working from home, unable to show yachts in the UK and with limited access elsewhere, and planning for the new season….

By this time, Discord, Teams and the rest are second nature and like most businesses we have hugely improved our technology to operate effectively whilst we are away from the office. This is a positive when we arrive in better times but just now, it is scant comfort.

Whilst the recent (third) lockdown in all our offices has been harder than the first (showing boats physically not allowed), shipyards and marinas are at least operating, and the clients have not stopped wanting to buy and sell. As we assimilate what has been the most serious medical emergency for a generation, the international vaccination programme enables us to look forward to better times. And that is most certainly what our clients are doing.

It is frustrating for us all to wait for news, but the one thing that is certain about COVID-19 is that despite the awful damage it has done to the people of Planet Earth, the wasted lives, misery and loss of life, we all now see the way to defeat this dragon. The time will come when it will be slain and the world will turn, not in quite the same way as before COVID-19, but to a new and positive rhythm.

Our clients recognise that and are planning for those days, knowing that the 2021 season may be limited – but of course 2022 and 2023 and on will all have glorious summers with time to spend out on the water.

We expect that the yacht market will be extremely busy this year as people decide to invest in quality of life, with their families and close friends and in enjoying all that being out on the water has to offer.

During this crisis we have seen extraordinary numbers from the new yacht manufacturers. We sell Moodys in the USA and Hanse increased production over 40% from the first lull in the pandemic to the end of 2021. For Windy – there is a clean sweep of boats sold for this season barring the odd one – a 44’, and we are now working on contracts for 2022! It is the same for Pearl for their award winning Pearl 62 where delivery is not now possible until mid-2022. Solaris the same, and the demand for new yachts shows no sign of waning.

The brokerage market has also had a massive shot in the arm during the pandemic (no pun intended). In all segments in which we operate there have been good levels of activity. In some cases we have seen prices rise – examples of this would be Dale Nelson, Windy, Hallberg-Rassy, Swan and Najad, for example.

covid-19-and-the-yacht-market-3

Those buyers who felt that the chaos caused by COVID-19 would mean that they could bag a super deal have been sorely disappointed and whilst they dithered with below market price offers, the yachts that they bid on have been snapped up by buyers eager to get on with a purchase and to get out on the water – he who hesitates Rodney….!

Normally we see some segments that are active, and others will be out of fashion and the yachts that occupy them fall in value and are very difficult to sell. More mature yachts with high maintenance costs being an example that immediately comes to mind. The unloved segment is gone, there are buyers across all segments and the market is moving at pace that is both breath-taking and scary.

Of course there are yacht owners who push the envelope on price, and they will remain yacht owners rather than sellers, but maintain your yacht and price her sensibly and in the current COVID-19 market she will sell. If you try and get away without the annual service completed, someone else’s boat will appear more attractive. Buyers want to go straight to sea.

In 2020 and during the normal quiet winter quarter we sold a number of yachts off market and often yachts coming to the market have had buyers waiting to snap them up. Sometimes it has felt that we were a watery match making agency.

COVID-19 has made us all look at the art of the possible and to change the way that we market and sell yachts. Before this crisis it would be unthinkable that a buyer would part with hundreds of thousands or millions of their hard earned euros, dollars or pounds without seeing the yacht they were purchasing live. Blind purchases did happen previously, but it was rare and fraught with difficulties. Now whilst not the norm, it no longer raises eyebrows. We have been lucky that technology has allowed for good video, and systems for conducting virtual viewings. All this was in the works anyway, but we have certainly honed our skills to embrace these facilities.

As with many things in life, contractual COVID clauses have become the norm, and in the absence of any alternative, many buyers have simply dug deep, said yes and become the owner of a yacht that they have never seen – let alone touched, or sailed, very often in a different country or in some cases a different continent.

Fortunately, surveyors still operate and if you are in a position where you are considering taking this particular plunge, we recommend a very thorough survey with lots of contact and a very detailed approach to doing the research. Always remember that surveyors are not there to impart good news, they are there to report on condition, to pick up faults and to look for any irregularities relating to coding, flag and the rest that could be a problem for you as the new owner.

However, they do not consider the interior furnishings, the spatial look of the interior and how comfortable the cockpit is if you want to curl up and read a book. These are things that you need to think about yourself. A good broker will spend as much time as you need to make you comfortable around these important nuances, and for larger yachts, her crew will help you to understand how you will feel when you are spending time aboard her once she is yours.

As the edge comes off COVID-19 and as more parts of the world open up, we believe that the imperative to sail, motor, explore and take part in yachting will grow with it. Tomorrow’s yachtsmen have been taught to become more mobile and selfsufficient than ever before, to understand their priorities and to want to spend time with their special people in their own space. Whilst the necessity to do things remotely has moved the fulcrum of office life away from the physical office, it will of course swing back to some extent, but this lived experience that we are all having, will mean that nothing in or around the office will ever be quite the same again.

Few of us will regret the endless meetings around a table (we have Zoom and Teams for this now!) or the need to stay late at the office to show the management team that you are on it. The work/life balance has shifted forever and with it the possibilities for spending more time afloat have grown with them.

Great new technology was there anyway and it is developing fast. We have embraced it – no choice – and we will continue to do so.

The Berthon Sales Group goes through life clutching a glass that is always at least half full, and because of that, despite the horror of COVID-19, we see reasons to be cheerful about what will follow it. We see more people enjoying yachting and spending proper time aboard their yachts. We see them going further, doing more and enjoying the ownership process in a way that was not previously the case.

covid-19-and-the-yacht-market-4

We look forward to the time when we can show our clients’ yachts live and live again the more normal yacht brokers’ life of hands on yacht selling, boat shows and the rest. COVID-19 has been a shocker but maybe what follows its demise will be positive for us all, yachtsmen, and those who are both yacht mad and who make this industry their living.

Read Another Article
Download Market Report 2021 (3.20MB)

Search BerthonInternational.com