Business & Finance
Brought to you by: Monaco Life
We speak to Northrop and Johnson Managing Director of Europe Patrick Coote about artificial intelligence in the yachting industry, whether this year’s Monaco Yacht Show lived up to expectations, and what it’s like to head the fastest growing yacht brokerage in the continent.
Monaco Life: Where did Northrop and Johnson begin?
Patrick Coote: Northrop and Johnson (N&J) was started in the United States in 1949, to service the needs of wealthy New York clients, and it gradually spread throughout the US over the course of the next few decades.
About four years ago, the company came to Europe for the first time and set up offices in France, Monaco and Palma. I joined last year with the remit to significantly expand our operations across the whole of Europe. We now have a growing presence in those territories, plus representation in Istanbul, Malta, Italy and soon in London.
What are the key strategies to achieving such rapid growth in Europe?
It is through an absolute focus on three things that underpin our entire brand strategy. Firstly, our exceptional brokers. There are no minimum requirements, standards or qualifications needed to become a broker. It is as easy as getting a business card at the local print shop.
But we don’t want to put anyone in front of a client unless they are highly experienced and knowledgeable, can add value to the conversation, and know exactly what they’re talking about – not in a sales sense, but in a technical sense, from a financial, operational, legal, and taxation perspective, etc. So, we’re being highly selective in who we bring on, and we’re starting to see an appreciation that N&J does add value and is highly professional.
Secondly, our exceptional marketing, particularly marketing in a technological and digital sense. Yachting is a highly traditional space where it takes a long time for a new approach to get traction. In the yachting sector in the past, it’s been all about brochures and advertising in magazines and boat shows – very traditional activities. But we are virtually a fully digitally-focused company; we are 90% focused online. So, when we are either seeking new clients or marketing the yachts that belong to our clients, we are achieving significantly greater visibility for those yachts and generating significantly more leads for our brokers through significant investment in new technology and digital applications.
Thirdly, we are very focused on ocean conservation, because that is the playground where our clients go to have fun, so it’s imperative that we play our part in looking after the ocean to ensure that it is there for our clients to see, swim and dive in. There are numerous initiatives that we are undertaking in this area. Internally, we ensure that our own qualities and practices are sustainable, whether it is travel related, single use plastics related, carbon offsetting our operations, or whether it is providing onboard operational guidelines for the yachts in our charter fleet to try and ensure that onboard practices are as sustainable as possible.
We are also actively encouraging our yacht owners and charter guests to participate in philanthropic endeavours, to go and visit research centres during a charter, to take their children to coral regeneration fields to try and educate those who really have the means to make a financial impact on those philanthropic initiatives.
Is your company’s focus on digital technology a direct response to Covid?
No, it is something of a luck of coincidence. We were moving in this direction over the last few years, and the fact that the whole world has moved fully online in the last years is simply to our benefit, but it is a path we were on well before Covid. But the pandemic has certainly kicked us on – we have had to do five years of development in 12 months, but that’s fine we had the people already in place to embrace that.
What specifically are your advances in technology?
We’re particularly advanced in terms of Artificial Intelligence. We maintain close communication with our prospective clients and all of those who enquire about our listings initially through AI. So, whilst we are creating a huge volume of leads, those leads are communicated with and nurtured via AI technology before being passed to a broker. We don’t want to swamp brokers with leads until we’ve established the quality and true viability of those leads and enquiries, so all of the first stage of communication is via AI.
Can you tell us more about your new Monaco office?
Our new office is twice the size as the one we had previously, and our sales and charter activity is approximately 50% up on last year. We have 18 people in our office here in Monaco.
How do you feel the Monaco Yacht Show went this year?
All of the feedback has been very positive. We saw limited numbers and less boats than usual, but the quality of visitors was high, the level of interest was strong, and you can’t ask for more than good inquiries from qualified buyers. We had a lot of interest in the listings that we had on display, quality listings that were realistically priced, but you never truly know the outcome of a show until a few weeks after when you’ve sifted through the offers and negotiated with the owners. However, initial indications are very positive and the word on the dock amongst the industry was overwhelmingly positive. I think the increase in the ticket price has limited the numbers in a positive way.
As a side… N&J is a member of the Leading Yacht Brokers Association (LYBRA).
Do you feel the organisers of the MYS delivered on their promise to provide something new and better this year?
We had several meetings with the MYS over the past 18 months and I think they took onboard a lot of the industry’s concerns about the quality of visitor, quality of the experience, and the overall return on investment (ROI) for those participating in the show. Therefore, the quality of visitor was better this year, the quayside experience was better, and I think we will see a significant improvement on ROI compared to previous years.
How are you finding the yachting industry in general, given the fact we are just starting to emerge from a year and half marked by the pandemic?
There has definitely been a carpe diem attitude to yachting, and increasingly so over the last 18 months. People who thought they would get a boat ‘one day’, have realised perhaps today is that day because we don’t know what is around the corner, life is uncertain, so let’s go and have some fun. And that sentiment is prevalent across the whole industry. We see very strong sales this year, a very strong market; we see ongoing interest from buyers, and we see shipyards that are full or are filling up and the interest is not waning at all. That’s for both sales and charter. So, right now the prospects for the industry over the next 12 months, at least, are still very positive and very strong.
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