Optimism for the luxury yacht sector in 2014 – exclusive interview with Burgess CEO
Jonathan Beckett, CEO of Burgess Yachts has recently shared exclusively his outlook for the luxury yacht industry in 2014.
How has your company performed in 2013 and what are your expectations in 2014?
2013 was a challenging year for us at Burgess – but we rallied towards the end of the year and moved the company into a profit situation. We have been fortunate to have always turned in a “profit” in the past 5 years. this is contrary to market trend.
2014 is looking very much more promising. We are excited at the prospects of the coming year and our expectations are high.
Which are your current biggest markets in terms of sales? What markets you foresee as growing in potential within the next 3 years?
The most important markets in terms of sales are America, Russia and the Gulf States (the Gulf States being a low volume but big $$$ market!).
Our vision for market growth in the next five years remains primarily with the traditional markets – North America, Russia and Central & South America. China is at least 5 years out – if not more – as far as superyachting is concerned.
What is your comp set?
Private aviation, high end realty, art, jewelry and automotive brands along with private wealth advisors are all working with a similar audience of UHNWI individuals globally.
With most luxury sectors affected by the global financial instability, what is your view of the yachts sector?
The yacht sector was dramatically affected by the gfc. the market stopped in its tracks for about 6 months and then struggled to find a new level. exisiting yacht prices (by “exisiting” we mean pre-owned yachts) plummeted to an all time low since the 1960′s and 1970′s – with many yachts selling for up to 50% less than their “pre gfc” market value.
New construction ground to a halt for a year or more – as they could not compete price-wise with the amazing deals in the exisiting (pre-owned) yacht market. There is now a resurrgence at the top end of the new construction sector – which is a very healthy sign.
The charter market was suddenly flooded with more inventory than ever before. The fleet virtually doubled in size. suddenly there was over supply in the market – and this created a highly competitive market place where everything was negotiable. we went from a market where having an available yacht was “the asset” – to where having a client wanting to book a yacht became “the asset”. Today the market has settled and we are returning to normal trading conditions.
What are the current trends in terms of best-selling models? – type, size, price range etc
Believe it or not – the larger the better. there are more yachts over 300ft under construction today than ever before – with 17 vessels of over 330ft being built. extraordinary. And if you want to buy an existing 300 footer there is virtually nothing on the market for sale.
Luxury sectors are increasingly realizing the benefits of cross marketing strategies. Do you have such ongoing or future projects?
Burgess has always recognised the power of cross-branding. It is something we have been doing for many years – and we absolutely plan to continue with this as a main marketing strategy. Possibly our most successful cross marketing campaign is between burgess and rolls-royce motor cars. Several years ago both companies recognised the synergy and we have been cross marketing together ever since – to great effect.
How does your brand relate to luxury lifestyle?
For clients who know and understand superyachting – the Burgess brand is synonymous with luxury and with lifestyle. It is the ultimate brand in the marine sector. a good illustration of how well we relate to the luxury lifestyle in our highly specialised field is demonstrated by our aptly entitled 236 page annual “burgess superyacht living and style” magazine.
How would you describe your client? – what car would they drive, what would be their favorite fashion/watch/accessories brand etc
Our client is highly discerning. someone who appreciates and can afford the very finest things in life. Our clients don’t drive one car – they tend to have a fleet of cars. these would range from Rolls-Royce, Bentley and Aston Martin to top of the line Mercedes, BMW and Range Rover, as well as Ferrari, the McLaren road car and Bugatti Veyron.
Individual and cultural tastes vary for items of a personal nature, but suffice to say that many of our clients are collectors of limited edition timepieces (Patek philippe, Vacheron Constantin, Audemars Piguet, Ulysse Nardin, Chaumet, Piaget, for example). for ladies, favored jewelry and watch brands include Harry Winston, Graff, Cartier and Chopard. Fashion brands will obviously extend to any of the high end designer labels, but also to bespoke niche suppliers for very premium quality goods (handmade shoes, shirts, cashmere, etc). it equally has to be said that some clients can be very low key with their choice of personal items and will not always sport goods that overtly display their wealth.