As the coronavirus continues to change and reshape the world as we know it, Cruising World is reaching out to contributors, our partners in the marine industry, and other sailors to get their take on where they are and how they’re doing. We’re asking five questions to each of them, and in this installment, we’re checking in on Franck Bauguil, the VP of Yacht Ownership and Product Development for The Moorings, Sunsail and Leopard Catamarans.
1. You have one of the coolest jobs in the marine industry, working both in the charter business and with some of the world’s best boatbuilders. Can you describe what you do?
Well, my job really is to sell yachts into our charter program, in other words to get customers and owners to own a boat in our Moorings and Sunsail charter fleets, which we then manage for five years. We also sell catamarans privately under the Leopard brand…direct sales, no charter element. So, there are three revenue streams: along with selling charter boats into the fleet, and Leopard’s direct, we also sell used boats and brokerage boats. The large majority of our business is direct B2C, and being in direct contact is an advantage at all levels, but especially right now.
I also develop new products with Robertson and Caine, the South African catamaran builder. What will we build next? What do we want to achieve? So, I work on a detailed design brief with the R&C design team and the naval architect. There’s also fleet management, so when we make a decision on a new model, we also need to decide which boats we’ll put in what fleets, where and what time. It’s very detail oriented on-going work conducted with our Yield Department
2. You have your finger on the pulse of a lot of manufacturers worldwide. What are you hearing from them?
As far as Groupe Beneteau is concerned, because we work with both Beneteau and Jeanneau, I’m less in touch with them than I am with Robertson and Caine. We have been informed about the closure of the Groupe Beneteau factories, that’s obviously affecting the delivery of the boats we have on order, we are working closely with them regarding the delivery of Jeanneaus to the Sunsail fleet in the Med. We also had a few Lagoons on order, as we had a shortage of boats from Robertson and Caine (after Hurricane Irma) and we are working with them as well on the Lagoon deliveries for the Med season. The workers are on temporary leave, but in France that is covered by the government, as far as compensation is concerned
I have closer contact with Robertson and Caine. They have a factory closure as well, which was triggered by the shutdown of South Africa, the entire country, until April 17. So that’s had an impact on deliveries as well but the impact is still very manageable and can be mitigated. They are closely managing their cash position, but fortunately they have a strong partner with us, their only customer. We’re a part of Travelopia, a travel company, that’s owned by KKR, one of the world’s largest private-equity firms. Our financial strength is facilitating the exclusive relationship that we have with Robertson and Caine. We have strong ownership that will help us get through this.
3. Where do people stand who have an order in with you, or if they want to put an order in? Can people actually do so, is this a decent time to buy a boat or should folks sit tight?
As far as yacht sales are concerned, we had a backlog of customers. This has hit us at a time when the market was healthy, so we had a backlog of contracts, with people who had ordered boats that weren’t delivered yet. So as far as both sides are concerned, charter boats and Leopard cats, we’re basically closing a lot of boats. And our customers are basically staying on board. They’ve been good about sticking to their contracts. For contracts that are pending with a delivery in the future, past the next two or three months, we haven’t had any cancellations so far due to the coronavirus.
As far as generating new business, that’s a little trickier, obviously, in this environment. Of course, there’s been a drop in activity. This has hit everyone hard. But with regard to new business, from a yacht sales standpoint, we’re focusing on the inventory we have on hand that we can turn into cash. We’re offering some really good deals on new and used boats right now. We have some incredible offers on existing inventory. So that’s actually created a good deal of activity, with both charter boats and Leopard cats. Otherwise, the entire Yacht Sales team is safely working from home and are available to service our existing customers, new ones and our owners.
4. And what about the charter side of the business?
I’m very involved in that as well, as part of the executive team. Our charter business has been very impacted by this crisis. Let’s cut to the chase. The BVI is closed, you can’t even get into the country. The Caribbean islands, one by one, basically closed their borders as well. Croatia is currently closed now as well, but this is the very beginning of the Med season.
Some of our bases in the Med are scheduled to reopen on June 1, we have delayed the opening by two months. This obviously could be extended to July 1, but this would make our situation in the Med even harder.
So, we are in a position now that has never happened before, ever, in the 50 years we’ve been in business, where all our bases worldwide are not operating. The focus has been on the safety of our customers, of course, and on repatriation, which is almost completed. We do have a couple of French owners in the BVI who don’t want to go back! Otherwise, everyone has been repatriated to their home country. We’ve delayed recruitment in the Med for our seasonal staff, and we have a temporary furlough of most of our workforce as well. The office staff is working from home, so we can continue to service our customers.
So, our charter revenue is drastically down, basically down to nothing. If you talk to other charter companies, they are basically in the same position. We are encouraging customers to rebook, with more flexible conditions, or we can issue credit certificates to be redeemed at a later date. All the information is available on our websites. We also encourage new booking later in the year.
5. Peer into your crystal ball. Where do you see the sailing world a year from now?
Oh wow, that’s a tough question. Well, we went through the tech bubble in 2000. We went through 9/11—that was very rough for the charter business—but it was a quick recovery after that. And we went through the financial crisis of 2008-2009. But this is new. First of all, it’s global. We’ve never been in a position where all our charter business is affected globally.
Where we’ll be in a year from now depends on how long this will last. If it’s something where we’re looking at being on the other side of this in June or July, we’ll be in a much better position than if it lasts longer. But it will take a while to recover. For the rest of the year, it will be trying to get back to normal. We’re already seeing a lot of boat shows cancelling, one by one, worldwide. Europe. Asia. Australia. Can we get back to normal by the Annapolis Boat Show in October? That’s the question. I certainly hope so, and we will be ready for that.
But I also think this is going to cause a change in behaviors, maybe people realizing they don’t have to go to an office every day. I think people are going to get back to essential things. I think sailing is in that category. People are going to do things they love to do, like being on the ocean. Owning a boat or chartering a boat, these are the true things in life. I think there may be an effect like that as well, which would obviously be good for boating in general, sailing in particular.
For more on some cool boats, visit the Leopard Catamarans Virtual Boat Show
