Jonathan Beckett, CEO of Burgess, had two big passions while growing up in England: boats and rugby. An avid sailor and rugby player, he seemed destined to enter the yachting industry. Following his university graduation, Beckett applied for a job working aboard a flotilla of boats in Greece, thanks to seeing an ad in a yachting magazine. He went on to run a sailing school in Egypt, then became a yacht broker in Athens with Halsey Marine at the age of 22. He joined the well-known brokerage firm Nigel Burgess, now known as Burgess, in 1981.
Over the subsequent three decades, Burgess has been involved in a number of significant brokerage transactions, new-builds, and more. Beckett has witnessed new markets emerge, and companies and yacht owners alike adapt to the ever-changing times. In our Leadership Series interview, Beckett shares his views on the key role consultants play for yacht owners, what buyers and sellers alike are doing right—and wrong—and why charter clients tend to prefer the tried-and-true destinations over the more exotic and less-traveled ones.
Megayacht News: Size-wise, yachts have changed dramatically over the years. What else do you think has changed dramatically about yachts?
Jonathan Beckett: Yachts have changed from being a luxury form of camping to the very ultimate in sophistication and technology. Obviously the value of yachts has gone up dramatically, too. If we sold a big yacht in 1981, it would be worth $2 or $3 million. We were lucky as a company in those days. We did a number of firsts. We sold the first yacht for more than $4 million, which was called Midnight Saga in her day. We sold a yacht called Sarina, which became Rosenkavalier, for $6 million, which I think was the largest brokerage deal in its day, 1981. Around 1986, we sold a yacht for $16 million. Then in 1987 we sold Donald Trump’s Nabila for $30 million, which was off the charts. It was front-page news all over New York, and very exciting. We’ve been very lucky. We’ve tended to lead the way with these big-yacht deals.
Megayacht News: Do you find that there are more consultants involved with owners these days?
Jonathan Beckett: Yes, it comes down to the investment and the amount of money that people are spending, so it’s natural to try to protect such an asset. When you build or buy one of these vessels, they’re very complicated. People spend millions and millions on entertainment equipment, navigation equipment, and more. There are consultants for each area: interior consultant, paint consultant, helicopter consultant, galley consultant. They all exist, and they all have a role to play.
Megayacht News: Is there anything about the economic crisis’ impact that surprised you?
Jonathan Beckett: A number of things surprised me. It surprised me how low the market actually went in terms of pricing of existing yachts. I don’t think any of us could have forecasted or expected prices to go as low as they did go and, to a certain extent, still are. The days of saying “No yacht built in Northern Europe has ever sold for less than it cost to build” are over. If you built a yacht for $50 million, you’re not going to sell it for $50 million in five years’ time. How many new yachts have come onto the charter market since the financial crisis is also surprising. The fleet has doubled in the last five years. People are trying to make their yachts work harder for them. The older yachts—yachts of 25 or 30 years old—are very difficult to sell, and very difficult to charter. A lot of those yachts are selling for what their annual running costs are. It’s a problem, actually. They’re too expensive to run compared to their market value. I don’t know what’s going to happen to them.
I think everyone’s surprised at how well everyone has weathered the storm. There have been relatively few casualties, which has been a good thing. But I’m not sure we’ve seen the end of it. I think we may see a bit of a shake-up in the next 24 months.
Megayacht News: So what’s the trick to sustaining momentum? Is it diversification?
Jonathan Beckett: Some of it comes down to reputation. Some of it comes down to which sector of the market you’re operating in. It’s being in the right place at the right time. I think the personalities are changing—the personalities of the buyers are changing, and we need to adapt to that. We are focused on this here at Burgess: adapting to the new market, meeting clients’ evolving expectations. Some companies seem to be living a bit in yesterday’s market. If they continue, my view is that’s just not going to be good enough in 10 years’ time. Absolutely everything you do matters, and I try to explain that to my team.
Megayacht News: Some yacht owners and buyers alike need to be more realistic in their expectations regarding prices. What are the biggest problems on each side?
Jonathan Beckett: The reality of the new marketplace both from the buyer’s and seller’s perspective is that it can take sellers a long time to get in the right place. In fact, a yacht can sell rather quickly if the price is right. Conversely, on the other side, this is a marketplace where there are lots of deals to be done, so once the buyers latch onto this, they try to drive the price down even further. This simply isn’t realistic.
Megayacht News: Charter clients still favor the traditional cruising areas versus exotic ones. Why?
Jonathan Beckett: I think what most charter clients are looking for is a family holiday or a holiday with friends. They want sea, sun, sand, good restaurants and nightclubs. They’re not looking for remote places more than one long-haul flight away. They want to get on the plane at one end and get off at the other—and they don’t want to be too far away from their business or their family. They want to be where the action is. Where everyone else is.
Megayacht News: Among the emerging markets, where do you see the most potential in the next five to 10 years?
Jonathan Beckett: In the next five years, we’ll see growth in Central America. China will take a longer time to come and is perhaps 10 years out. America is still a great opportunity, but even India is still relatively slow and Asia is still slow. China will eventually come, and when it does, it will come on strong.
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