As a result of tighter safety regulations and the opening of new markets, the yachting industry has changed considerably in recent years. New technologies and a growing demand for sustainability are contributing to this transformation, while a greater level of professionalism has also made a marked impact on this once-lax field. European CEO spoke with the Director of Neo Yachting, Nicolas Valin, about these changes, and the notable differences between emerging markets and yachting’s traditional heartlands. By placing customer service foremost in its business model, Neo Yachting has stayed on top of modern trends. Offering boutique services has also remained part of the culture since the company was established in 2009, which allows clients to benefit from a unique, tailor-made experience.
How has the yachting industry fared in recent years?
The industry has changed dramatically since 2008 and 2009 – and in certain ways it has become much more professional. There are more rules to follow and there is greater complexity at all levels, particularly in terms of financial and safety regulations; this is a logical process, as society is becoming increasingly safety-conscious. The times when an owner would ask his captain to manage his yacht and consider yachting with a ‘do what you want’ attitude are over. Even for smaller yacht charters in the Mediterranean, owners need a proper management company in order to deal with complex operations.
The times when an owner would ask his captain to manage his yacht and consider yachting with a ‘do what you want’ attitude
are over
The demand for bigger yachts has been another notable difference. The average length of yachts has grown tremendously, which has also added to the need for greater professionalism in yachting. One aspect that has not changed is that yachting always starts with an individual with a vision and a project. Success comes when the right team has been appointed; human relations are still very important and allow small companies like Neo Yachting to be able to fight on the same ground as the larger brokerage houses. For example, in early 2014, we sold a 62-metre yacht, which simply would have not been possible 15 years ago.
To what extent is customisation and personalisation important for companies like Neo Yachting?
The strength of Neo Yachting is being able to adapt our service to our customers. There is not one yacht in our fleet that is managed in the same way as another; this is why we are able to win clients from the larger brokerage houses. Our organisation is vertical: each key-account manager in our company simultaneously acts as both the broker and the yacht manager, thus allowing one point of contact for the client. Of course, we also rely on specialists, who are either internal or sub-contracted.
Neo Yachting is specialised in a segment of the market in which customisation is very important; we have upcoming projects for new-build yachts that are up to 40 metres long, and refits of two 30-metre yachts.
In what key ways does Neo Yachting differ from others in the industry?
We place service above all. This is not just a tagline; it is reflected in the way our company is organised. We always place charters and yacht management first, with sales being a consequence of the type of relationship that we develop with our clients. This is the exact opposite of 99 percent of brokerage houses, which consider charters and management as secondary services.
How has the yachting market grown in Asia of late?
The opening of new markets such as Asia, both as a client base and cruising grounds, has been a key change in the yachting industry. Each market within Asia differs greatly, from the rate of growth to the type of clients and projects. Thanks to our partner, Martello Yachting, we are now present in China, Hong Kong, Singapore, Thailand and Malaysia, and we have a very good feel of each respective market.
Thailand is growing fast as a yachting destination; we have one yacht for charter there, and soon will be able to offer two more. Malaysia is also growing fast, but buyers are tighter on price and so are shopping around. Singapore has been our most dynamic market in Asia, mainly for yacht purchases from European clients, and, to a lesser degree, for short-term charters.
As for business in China, it has not grown as fast as anticipated, but thanks to our local partner we are in the best position to adapt to the specifics of the market. The Chinese market is controlled by companies that are based in and operate within the country – hence our decision to forge a strategic partnership there. The yachting market in China will develop parallel to the growth of yacht building, and it will be huge.
In what key ways do Asian clients, particularly those in China, differ from those in more developed markets?
Chinese clients are not very sea-orientated, and have had very little exposure to yachting in the past. In this sense, they do not consider yachting in the same way as Europeans or Americans do. For the most part, yachts are great entertainment platforms where they can mix business and pleasure. In addition, the current strict maritime regulations limit customers on how they can use their yachts; essentially, vessels can be used as day yachts that travel short distances, but overnight cruising is not permitted. For this reason, cabins are not really necessary and the internal layout is very important, so that they can offer different areas for entertainment.
Among the main shipping lines, European-built yachts are not really suited for the market yet. However, yacht building in China is growing fast in order to provide units that are suited to Chinese customers. Cheaper prices are also important, including low-cost labour and no import tax, which explains why Chinese corporations now own Sunseeker and Ferretti. We are currently building a large sailing catamaran for a client in China; the entire project is Chinese and the concept is very innovative. We will be making an announcement about this very soon.
How important is sustainability for the industry?
Sustainability is growing; yachting is following general global trends in this respect. Sustainability is also a way to come back to the real values of yachting, which are sharing precious moments with friends and family, in safety and comfort. In one way, yachting changed with the Mangustas and Leopards. Although these fast, open yachts are now a part of the history of yachting and helped businesses to grow, they also took us away from the basics.
Furthermore, sustainability allows shipyards and sub-contractors to innovate in many different domains. Such innovations include stronger glass with larger openings, exhaust catalysers, and gas turbines that are used as generators with zero emissions. Green cleaning supplies and methods for lower fuel consumption are also available now.
What are your ambitions for the future of the industry and for the company?
The growth of the industry will be slower than in recent years, but it will become more organised, to the benefit of yacht owners. Neo Yachting will grow in the exact same way – slow but steady. We will maintain our organisational structure, namely one point of contact for each client, and we will grow our network of partners in the same spirit. Additionally, we will also work on more new-builds and refits, having developed real expertise in this field.