Following the publication of an article in The Crew Report (‘Time to Rethink’, September 2012), where an anonymous captain berates the excessive marketing spend at charter shows, OnboardOnline decided to open up the discussion. Is all the showbiz and glamour associated with brokerage shows worthwhile, or is it becoming a bit of a farce?
Talking to Mex Folan, an experienced captain and engineer and hard core sailor, he remembers his introduction to charter agents and brokers: “Well, I was once told, in no uncertain terms, that they drive the entire industry, that they are at the top of the pillar, and at the centre of the universe and, were it not for them, silly sailor dudes such as I would be sitting on a dock somewhere in the world beside a pond.” An interesting view, and one imagines perhaps that the source of that opinion resides behind a desk in Monaco. Mex concedes that this is a biased opinion; boats and boat people have been around for millennia, and so have these simple sailor dudes.
He is right of course. Brokers and charterers in various guises have been in existence in the business world for many years; how else did people get their product from a to b around the world? But with the advent and growth of the luxury yachting industry comes a different type of customer requiring different ways to impress, creating a whole new career path for charter brokers.
Suddenly wealthy clients wanted to charter these pleasure vessels but, in the early days, they relied heavily on a broker for information and guidance, for which there was a handsome fee. Over time, as clients become more knowledgeable, and the number of brokers has quadrupled, attracting and keeping clients has become increasingly competitive. Marketing techniques have necessarily become more sophisticated and creative, both on and offline.
Competition: Fiercer than ever..
With the economic slump, competition for business is fiercer than ever. Perhaps this is what upsets crew most when it comes to show time. Seeing such lavish displays from charter agents when people are losing jobs provokes strong feelings, despite an understanding of the need to keep up appearances. The Monaco show, being the most glittery of them all, is therefore bound to rouse criticism. This year it was a sea of brightly coloured flags, branding was everywhere, and we saw a whole host of creative displays to attract new customers onto stands. In an effort to make their brands stand out, the PRs organized live bands, lavish parties and, rather than the usual branded bag and a cap, the gifts bestowed were much grander. The logic we are told is that wealth attracts wealth, as success breeds success. It´s an important demonstration of how well the company is performing and how well they know and understand their clients.
Interestingly, not all brokers are thinking along these lines. Jim Evans of Superyacht Monaco said, "In the current climate we believe owners are dismayed by excessive advertising and displays of opulence of any kind. Our model is more businesslike and we believe that to be an accurate reflection of the more austere times we live in." Jim successfully demonstrates there is no need for flashy opulence when the service provided exceeds expectations. Quite simply it does what it says on the tin.
Unfortunately we were not able to talk to any yacht owners directly but we would be very interested to hear your views on the spend and peacocking that goes on during the shows. Is it winning them over or is it actually putting them off?
And all that jazz
We asked our captain if he feels we need all this marketing. He told us, “Perhaps not… but let´s face it, this is a luxury industry. Many yacht owners like to have a bit of glamour attached to their yachts, it is a chance to show off to friends and colleagues. ”So, in this regard, we can say the charter agents do have the owners´ interests at heart.”
As in any industry, there is bound to be an element of one-upmanship between the larger charter agents with the bigger budgets. Marketing strategies for the shows is often a closely guarded secret and sometimes one wonders if the biggest flags/stands/parties are more for the benefit of peers than potential clients. But when the show draws to a close, we all understand that it's tough out there, trying to secure enough business as more and more yachts become available for charter.
The amount of money spent by each company at the Monaco show each year is staggering. One accountant told us the figures he sees are verging on the ridiculous. We heard of one company seriously considering using a live panther at the show. Is it turning into a circus?
Marketers will tell you the Monaco show is an important time for companies to shine and sell themselves to the entire industry, from crew up to owner. It is a tough four days, and when the curtains come down, these companies want to be able to say it was worth it; the financial investment as well as the personal effort. Monaco is still a magical event for many, and it continues to attract the potential for big deals. Many of the antics may appear frivolous, but it’s all in the name of differentiation and selling the brand: “We are different”; “We are modern”; “We are young and cool”; “We are traditional”. Long after the show, this is how they want to be remembered.
Captain Michael Rouse adds, “It seems to be a case of exposure and keeping your brand out there as there are lots of new companies and people coming into the industry.” This is true; people remember the unusual. People talk about the charter company who had a live band singing on their yachts, not the company who gave you a branded biro. But at what cost? Michael goes on to say “I think people spend a lot of time keeping their name at the front of people’s minds which could possibly be at the cost of developing and nurturing existing relationships. But, this is a general comment about the industry as a whole, it’s not aimed at charter brokers specifically.”
Bridging the great divide
It is no secret that a good charter broker takes time to know their vessels and, perhaps more importantly, the crew. Unfortunately, with the boom in the industry, it seems not all brokers are as proactive in this respect and there is often a clear divide between the two sides. As a result, many crew see brokerage as a career based on sales and money, somewhat removed from the people actually looking after their clients and running the boats. As one crewmember hinted, “There is no ‘I’ in team… but there are TWO in commissions….”
One Chief Engineer working on a large motoryacht told us, “Charter brokers were the natural enemy before the advent of all these 'management companies'. Way back, I can remember a charter broker advising a potential charterer to leave a crew tip of between zero and five percent, whilst the brokerage fee was 20%. This came right from the guests. In my experience, charter agents are focused solely on their commission - they'll say anything to make that sale.”
Captain Mex also raised the issue of dealing with certain charter agents who did not understand the complexities of each individual vessel and her needs, “Some yachts require rather more attention and care than others in order to maintain them to the standards expected by charter guests.”
Misunderstood and misrepresented..
Unfortunately this is a common view held by crew in the yachting industry. So many feel misunderstood and misrepresented by their charter agents, and many commented that they had never even met them in person. So when crew attend a show and work their socks off to make the yacht look and feel fabulous for potential buyers and charterers, they can feel a little put out seeing all the marketing, the grand displays of champagne and extravagant parties.
Of course, not all brokers are the same and, many do use these shows to meet and build better relationships with the crew and captains. Equally, when a yacht hosts a group of brokers, providing they make a full tour of the yacht and take time to speak to the crew, it can be money very well spent. If crew make a good impression at these events, brokers are much more likely to remember your yacht when the right client comes along.
Interestingly, most charter brokers we approached declined to comment on the opinion raised in the original article, with one dismissing the Captain´s letter as unworthy of a response. It seems that feathers have been ruffled, which is why we thought this is a discussion worth having. Private conversations reveal scepticism on both sides, and a lack of understanding between crew and brokers in terms of their respective roles, so isn’t it time to air these views more openly?
One broker was willing to be quoted, though they wished to remain anonymous. She says, As a charter broker, you have to be familiar with the yachts you are selling in order to be able to match the client’s expectations. At the same time, since we are really selling the experience of a charter, it’s vital to get a feel of the yacht yourself, to talk to the crew to guage the flavour and dynamic of the team. Considering we entrust crew with our most valuable assets, our clients, getting to know these people is a vital part of doing a good job. I know not all brokers do this, but we should.”
On the other side of the coin, she says, “Generally, crew and brokers are fundamentally different animals doing very different jobs. I can understand why crew are put off by all the bling and spend at shows, but it’s a pretty cut throat environment in charter these days, and everyone is just trying to stand out in the crowd and differentiate their brand. Once we have the client, we all do more or less the same job, some better, some worse, but the real work goes on behind the scenes, and it’s a long way from being glamorous!”
If a good relationship exists with a charter broker who understands the difficulties and legal responsibilities that a captain faces with regard to pleasing charter guests, then perhaps the captain and crew would be less concerned with all the extravagance in attracting clients. After all, clients are what the owner wants, keeping many of us in jobs.
Whatever your opinion, it makes sense to try and bridge the gap in this attitude of ‘them and us”. One experienced sailing charter captain explained that in this industry we all need each other: Owners, Agents, Brokers and Crew. If one element falls down then the system fails.
In short, we need:
Professionally run yachts that meet the increased regulatory and legal responsibilities that a Master must satisfy with regards to statute law - rules we HAVE to follow or face criminal and/or civil punishment.
Management companies that can competently assist a Master in these responsibilities while also keeping owners happy.
Effective industry marketing and sales brokerage to sell yachts and encourage new builds, keeping many thousands of people in work.
If an owner does want to charter their yacht, we need the support of professional charter brokers to attract and manage their clients according to industry contracts and guidelines.
We’d welcome your comments and we’d especially like to hear from more brokers and owners. Please share your thoughts and experiences in the forum.