What part should they play in the yachting industry?
In an age of growing technology & globalisation, bigger is often regarded as better. Since the rapid growth experienced in the 80’s & early 90’s, The Yachting Industry has been dominated by large, cumbersome companies, diversifying between Yacht Management, Re-Fit, Crew Recruitment & of course Brokerage & Charter Management.
A quick online search for ‘Yacht Management Companies’ provides 12 results on the first page alone, with 11 of these companies providing the full list of services mentioned above, raising the question, ‘who are the true industry specialists?’
Bristow-Holmes have had the pleasure of working & meeting professionals from every corner of the industry, including a select number of exceptional management companies.
The role of a Management Company is to work exclusively for their client’s. To provide transparent accounting, impartial advice and operational expertise throughout the day-to-day running of the client’s Yacht. Yacht Management Companies owe a duty of care to the owners & representatives for which they work.
The onus is to fight for the best deal for the Yacht Owner. This could be for the annual servicing of Engines & Generators, Re-Upholstering Exterior cushions, or pushing for a warranty extension from the shipyard… the idea is, a Management Company can be trusted to act as if the Yacht were their own. A monthly fee is invoiced to the owner, with the assurance of complete transparency & an obligation to dutifully and faithfully represent the Owners best interest.
So why is it that so many Management Companies provide Brokerage Services? As a Boutique Brokerage, our focus is to successfully market & sell our clients Yachts, we are incredibly honest with our approach to the marketplace and openly explain our fee structure.
Bristow-Holmes retain a commission on the completion of the sale. Are Management Companies as transparent?… Is there a conflict of interest?… Who are the specialists? And what is their motivation?
‘Big Boat Management’ Manage a 40M Yacht, overseeing the following services…
- Unlimited Crew Placement
- Monthly Account Breakdown
- Berth Reservations & Fuel Booking
- Taxi & Transfer Booking During Summer Months
- Advice & Negotiation Throughout Ownership
Monthly Fee: €5000 PCM
Should the owner decide to sell the vessel, ‘Big Boat Management’ are faced with a decision. Do they maintain complete transparency? Providing support to a Professional & Experienced Brokerage in the best interest of their client? Or Do they open ‘Big Boat Brokerage’ with limited knowledge and experience? With only the hope of a commission payment on the sale.
A Conflict of Interest…
With an annual management fee of €60,000, can the owner trust ‘Big Boat Management’ to genuinely push for the sale? Given the fact that upon completion, the new owner may choose to appoint another Management Company?
The incentive for large Management Companies to retain management outweighs the one-time commission on an eventual sale! Why would any Management Company actively market a Yacht, if the sale resulted in a reduced annual income?
Who are the Specialists?
Bristow-Holmes are proud to work non-exclusively with a number of ‘True’ Yacht Management Companies, companies that have no interest in expansion into Brokerage, but truly work in their client’s best interest.
A true management company will request a pitch from 2 or 3 Brokerages, and put forward the best proposal for their client. This distance allows them to advise their client with true neutrality, as an honest Management Company should.
We have seen an increase in the amount of ‘Management Only’ organisations. It has been reassuring to see a serious shift in attitude, with so many owners faithfully using Management Companies, it is important the honesty is returned with good work practice & ethics.
Bristow-Holmes do not work exclusively with any Management Company, however we can confidently recommend a number of trusted and established ‘Management Only’ businesses.
Why Does it Matter?
We are often asked the question, ‘Do you plan on expanding into Charter or Management?’ The simple answer is no. Bristow-Holmes are true specialists in Yacht Brokerage. We are confidently throwing and catching the same ball, with a 100% success rate. With every additional ball that enters the equation, the risk of dropping it increases – We don’t juggle, we sell Yachts!…
So, what does the future hold for big business in our industry? Well, Bristow-Holmes sincerely hope to see growth in the more specialist areas of the market. Whilst the largest companies continue to grow, with lazy tentacles in all aspects of the marketplace – Smaller, more powerful disruptors are providing a genuinely bespoke & boutique service. A personal solution for every situation. For Yacht owners & ‘True’ Management Companies, we are open for business and look forward to building sustainable relationships.