The brokerage market is the part of our industry that is naturally most reactive to world events. Those working in this sector have to swiftly navigate through difficult times in order to survive. Therefore, it is important to hear from the leaders in the brokerage world not just to share their insights on the current global pandemic, but to help educate those who are not so familiar with the work of brokers. Willing to share his knowledge and expertise is the CEO of Burgess, Jonathan Beckett, who predicts that the market will only recover in 24 months’ time. Each market reacts and adapts differently, but all have been impacted as a result of the coronavirus pandemic. Do you see any differences between Europe and the US markets at the moment?
Yes. America is the largest stock market in the world and is very resilient - whether it's a financial crisis or a crisis like this, as soon as Americans see a path to recovery they're the first to react and jump back on the bandwagon.
However, we're in a very challenging time at the moment. I was talking to a client two days ago who is worth close to $10 billion and he has laid off 2,000 of his workforce. This has an impact on the yacht market as, after just letting go of so many employees, to turn up with a brand new Rolls Royce or go out cruising on a new superyacht would be insensitive to the situation. Although, I think the market is showing signs of recovery and we are seeing a light at the end of the tunnel, which for quite a while wasn't there. We're very hopeful that we will see some brokerage activity starting in the next few weeks, but it won't bounce back to where it was before the COVID-19 pandemic. We are forecasting 24 months before we really get back to the activity levels we had before the crisis, leaving us at least 50% down on business this year, probably 25% next year and in 2022 we will be back to where we were. These predictions could be wrong, as no one knows what will happen.Photo: Charl van Rooy / SuperYacht TimesFor some companies, being 50% down in revenue is not easy. How are you managing this?
If you're running a business you cannot be unrealistic and think that business will be down only this year and the market will be back to normal by next year. At Burgess, we're fortunate that we have other services such as a large management fleet and an insurance division. These parts of the company certainly don't pay all the bills but do provide cash flow.
Even though we have reevaluated our figures until the end of 2021, there are a lot of companies like us who are having to manage themselves very carefully. The last thing we want is to see companies not being able to survive, but I can imagine that we will see some consolidation going into the third quarter of this year. Also with some help from the UK Government, we have been able to maintain the salaries of approximately 10% of our London-based employees.Photo: Charl van Rooy / SuperYacht TimesWhat is your opinion on the status of the upcoming yacht shows?
If you look at what has happened with the Monaco Grand Prix, the acceptance and attitude that this year there is no event, but it will come back next year bigger and better than ever is very positive. If we have to miss one Monaco Yacht Show, it's not the end of the world, and if it does go ahead, it may be the wrong message that our industry could send out at this time.Photo: Charl van Rooy / SuperYacht TimesTo some, being on the water with family and friends is one of the most attractive ways to spend the summer and is a better option compared to visiting hotels, resorts or cruise ships. Do you agree?
Yes. This is the sales pitch that many of us have: being on a superyacht is not just the best holiday that you can have, it's also the safest. Photo: Charl van Rooy / SuperYacht TimesWhat have you observed about the market recently and what do you see happening in the long term, post-corona?
At the moment we're seeing some disconnect between buyers and sellers in the market, with quite a lot of opportunist buyers coming into the market, circling and looking for deals. But the deals aren't out there and the sellers are managing to remain firm on their pricing, which in some ways is a good thing. To close a deal we need to have the buyers and the sellers on the same page but a lot of buyers seem to be waiting for the prices to come tumbling down, which I'm not so sure will happen any time soon.
I think we won't really know what the full effect of COVID-19 is on the world economy or our clients' businesses for a long time. One hopes that our clients are resilient enough and have enough cash reserves that they don’t have to lose their private assets. Photo: SuperYacht TimesDo you agree that brokers have a responsibility to help grow the market and invite more non-yachting people into our industry?
With SYBAss, LYBRA and Superyacht Life we are looking at ways to educate non-yachties about the lifestyle - because yachting is a lifestyle choice. Some wealthy people who don't understand what yachting is and how it is a lifestyle spent with friends and family are the people who wouldn't consider it if not educated first. This education we need to do collectively as an industry, and not as individual companies.
This interview was part of the 13th SuperYacht Times Webinar. If you missed out, catch up via the video found below. All past and future SuperYacht Times Webinars can be found here.