You don’t own this industry and it needs a shake
Ahoy Club has caused quite a stir since bursting onto the scene this year with initiatives that challenge conventional models of ownership and charter. So, there was never any doubt that ‘The Disruptor Debate’ at the end of day two of The Superyacht Forum, chaired by The Superyacht Group’s Martin Redmayne, would likely be a full-blooded session.
Joining Redmayne on stage were three yacht owners and market investors: Ian Malouf of Ahoy Club; Philippe Bacou of Yotha; and Matty Zadnikar of SeaNet, a fractional ownership company.
Bacou is quick to argue whether Yotha and Ahoy Club are in fact ‘disruptors’, as the programme defines them. In his words, they are “the providers of new tools to advantage owners, charterers and all members of the industry”, adding fluidity to processes. “We see digital bringing more productivity and safety in financial transactions and simpler contracts bringing additional security. This is what we’re trying to provide,” he said.
Malouf mentioned that his primary objective is to improve the market and his secondary objective is to make money. “I think we’re portrayed as a one click and you’re there business, but we have a large team and we are a full-service digital platform. We have the cheapest structure in the business and we expect it will go lower before it goes higher.”
Redmayne asked how their respective businesses have been received by the superyacht market, which, as we know it, tends to be fairly resistant to change. Bacou said, “The market has responded aggressively because we’re coming in and offering reduced commissions, but if we reduce commissions, it’s because we’re providing a different service.”
“We have the cheapest structure in the business and we expect it will go lower before it goes higher.”
“When you provide something that is automatic instead of manual it reduces costs. What we are doing is making savings here. Of course, we all want to make money, but it comes down to global satisfaction.”
“We have the cheapest structure in the business and we expect it will go lower before it goes higher.”
Malouf also criticised the market’s approach to new entrants: “Their behaviour has been poor but expected,” he said. “We’ve been treated like we’re coming into an industry of brokers who think they own the boats. Our pricing structure is cheaper and we’re being told by many that it’s not acceptable and that it is an act of price-fixing.” He added it’s “cartel-like” behaviour.
Redmayne questioned how these ‘solutions’ have been received by owners. Bacou answered: “To be honest, not a lot have tried because we are in a profession that is reluctant to change. When you say you’re going to pay a big amount of money for an internet platform to book a charter, it’s not something you would do naturally. You would buy food on an internet platform, but sending a down payment of €100,000 is different.”
Malouf said the difference between him and previous yacht owners who have invested in the market with little success is that they were not committed and not funded. “I am both”, he said, “and I’m also not accountable to shareholders because I am the only shareholder.”
The representative of a large brokerage house congratulated Malouf and Bacou on their initiatives. He then posed a question to Malouf: “Sometimes, it’s easier to change things from the inside than it is from the outside, and I know you feel on the outside right now and the industry looks at you as being on the outside and wants to keep you there. But as an industry, for what it’s worth, we have MYBA, LYBRA and IYBA – these are the industry bodies that keep us in shape. What happened when you went to the industry bodies to say; here is a way to improve the client experience and a way to grow the industry, what do you think?”
Malouf responded: “Sometimes you have to break things to fix things and that’s what needs to happen. You’re talking about joining arms and walking down the road, which we’re witnessing and it’s a behaviour that’s unpalatable. The question of why didn’t we go to the industry is the reason we are here. For you to even ask me that question is a joke”.
“You expect me to bend a knee for the incumbent and say, is it ok for me to enter your industry? Well, you don’t own this industry and it needs a shake, is getting a shake and will be shaken by us. What happens in a market is you have a business and competitors come in and compete, and whoever provides the best service for the best price and for the best commodity usually ends up with the best business.”
The brokerage house representative’s retort was that most of the companies that make up the brokerage sector have informed and conscientious brokers in sales and charter. “There are lots of things they’ve learned and do. The very best have 50-60 per cent repeat business. How are you managing to get industry knowledge so that your clients and our clients and everyone’s clients are benefitting from your platforms? How are we going to get the best out of what you’re bringing to the table?”
“You expect me to bend a knee for the incumbent and say, is it ok for me to enter your industry?”
Malouf responded: “We have 3,000 yachts on our platform listed with their retail price, which is what you guys charge, and the lower price we charge, because we take it out of the commission. You can search for boats quickly. It’s not about ringing a broker and asking for a broker-friendly brochure, which is then put together with their name on it and within a week or two you get a response.
“From there, they [brokers] look at the yachts on their books, versus the yachts not, rather than trying to find the yacht the client wants. We [Ahoy Club] go to the central agents who represent the owners and say we have a charter for your yacht and we get told to f*** off! We respect the central agents until they disrespect us.”
He continued: “A few central agents will block a charter from us getting to the owner. Our remedy to that is that we respect your CA agreement until you breach it by not recommending our choice. That’s when we’ll go to the owner – it’s simple and fair. We’ve done over 100 charter contracts so far – we make no money off the small charters but they’ll come through. You talk about building relationships and that’s what we’re doing. You guys are hanging on to clients you have a good relationship with over many years and you are still stripping them of 20 per cent [commission per charter].” Malouf added he was “urging” the market to join him in adopting similar platforms.
In an effort to settle the hostility between Ahoy Club and the brokerage sector, a representative of MYBA said he would be happy to review a MYBA membership application if Malouf would like to apply to join the association.
Redmayne closed the session by asking each owner to provide one piece of advice for the industry. They answered as follows:
Zadnikar: “Put your commission drive aside and focus more on what the client wants.”
Bacou: “I think the market will enter into a big and deep evolution due to new technologies. Don’t miss that step – it will come very soon.”
Malouf: “Stop your disrespect.”
BY FELIX SOWERBUTTS
