7. Arthur Bohr on Redefining Luxury Yachting from the Inside Out

In the final episode of Season 1, Arthur Bohr, Monaco Site Director at Monaco Marine, joins Prof. Dr. Phil Klaus and Rebecca Gabbi to explore how the yachting industry is being transformed, emotionally, ecologically, and strategically.

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Transcript

SPEAKER_00 0:00

Welcome to Lux Visionaries, the talk show where the most influential minds in ultra-high-end living share what really drives their success. In every episode, we sit down with the trailblazers redefining what bespoke, personal and purposeful luxury truly means. Nothing here is scripted or staged. It's unfiltered, unwarnished, and unlike anything you'll find elsewhere in the world of luxury. Do you remember the old saying that every yacht owner has the favorite days, the day the buy and the day the sell the boat? Well, we're here to change things. And today's guest is really going the extra mile to educate the industry towards this transformation. We love Nautica, but we know the challenges it comes with. So what we can do is try to take the pain away and deal with it so that we can improve the super yacht ownership experience. And again, our guest today is really pioneering this. So the episode will be all about unveiling the behind the scenes of the yachting ecosystem. My name is Rebecca Gabli, and I'm vice president at Lex and Lux. I will be your co-host and moderator today. So let me now introduce you to the real host, Professor Dr. Phil Klaus. He's co-founder of Lex and Lux, an awarded luxury CX strategist. So, Professor, there you go. We start the episode straight away.

SPEAKER_01 1:26

And good morning, good afternoon, and good evening to our audience. Today in Lux Visionaries, presented by Lex and Lux, we have the unique honor and privilege to talk to the one and only Arthur Bauer. And based on our private conversations we have now here and then, I might promise that this could be a thought-provoking episode, couldn't it, Arthur? It can be. It could be. So for those of us who are not familiar with you, would you like to introduce yourself very quickly? Sure.

SPEAKER_02 1:59

Well, I graduated with in marine biology with a specialization in ecosystem. I decided to move quite um straight away to luxury business. So I managed a few companies in uh the luxury services, uh car chauffeur, travel agency, and developed on the side a conciergery company for uh five years, six years. Um and at the same time I developed family offices for clients. And when you start to be a problem solver for TryNet worth, you end up dealing with a lot more than just consergeries. So I had the chance to touch to uh a lot of uh asset management, and my passion since a kid were watches and cars, so I ended up advising uh quite a few clients about uh where to invest the money in uh in this pleasure side, and I uh decided to take the challenge to go to Joding eight years ago now. Um, there was one of the only assets I was refusing to manage at the time of the family offices, and uh for a few reasons. Uh, and actually, it's been an amazing challenge and an amazing journey. So uh learned a lot from uh from incredible people. So I'm quite lucky to be here today.

SPEAKER_01 3:18

Well, um, my question would then be: if you never wanted to be in Yachting and now you are in Yachting, is it like a love-hate relationship, or is it more like, well, I finally gave in and now I start to like it? Or how so how does that come all about?

SPEAKER_03 3:35

No, not at all. It's um I realized that all the luxury industry were already so close to perfection um that you couldn't really reinvent a lot of uh of the parameters or services you had in luxury.

SPEAKER_02 3:52

And uh with the the little experience I had with clients in in yachting, I realized um that we were not up to the standards that Culture Network were expecting. Uh that you can find in hotel business, in uh private jets, aviation, or in car industry. There's a lot of reason for this, and I didn't know the reason at the time. So for me, that was really the only place in luxury where a kind of revolution could be done. Um, I was quite optimistic when I arrived, thinking that it could be done um fast. And after eight years, I can clearly say that it's not that easy. Um, and because I learned, I was um I was uh not I didn't know what was the uh what was the yachting um and what was the um the leverage you could uh you could use and the um the obligation you had, which now I understand, uh and I understand why it didn't change for now 40 or 50 years.

SPEAKER_01 5:01

It sounds like uh years of frustration because uh it also appears that you thought, okay, it's gonna be just me using my experience and my knowledge and implement it in a new industry which will embrace it completely and then follow a court that might have not been quite as you envisioned it, was it?

SPEAKER_03 5:27

Um yeah, you know, when you when you arrive in uh when you arrive in a business and you're really young, you have those ideas where you think you can uh you can change a lot of things, just uh just being yourself, but that's not the case.

SPEAKER_02 5:40

I had exactly the same in marine biology, so uh I um I needed to learn, and I think that uh the learning curve has been uh quite steep. So I learned I learned a lot, and I think that we're maybe at the at the right moment to see uh to see a change. So uh so we we actually see a lot of good um good parameters that are telling us that a change is needed, that clients are looking, some clients are looking for for some change. Um so uh so yeah, it could be it could be the moment.

SPEAKER_01 6:18

Well, the moment for what exactly are there? Of course, our audience wants to know. You say change, but change is a rather abstract construct. What do we where's the pain?

SPEAKER_02 6:31

Uh well actually that's that's one of the that's one of the parameters. Um owning such uh luxurious and expensive assets and having to deal with that much pain is is a part of the issue. And when we see the new generation arriving, they do not own anything. So, how do we deal with the fact that they don't own, but they want to use? So we will need to find a way to actually have some yachts available on the market without having people paying for them. And we know that a boat does not generate income, or really rarely, on some occasions, but not on the long-term period, and even more if you had the five-year um the five-year work you need to perform by the class. So um rather, we find a way to make boats economically sustainable, or at a moment we will have an issue with people requesting and not asset being available.

SPEAKER_01 7:32

It makes complete sense. We had this conversation before, because uh a yacht in itself is a depreciated asset, you know, and the moment you buy it, you know you're gonna lose money with it. You know, it's not that you speculate and say, oh, that will provide me money, but then there's the additional, how shall I say, headache that comes with it, with ownerships, and we had conversations about that. And I absolutely agree that the new generation says, based upon the examples they see from their grandparents and parents, they say owning, no, nautica experiencing, yes, but we both know that that means we create a bottleneck because without owners, there's no experiencing in terms of charter. So, and I remember in our last conversation, you said, yeah, I have a solution for that, but we never came to the solution. So now is your time, you know, and it's also a much larger audience than just the Lex and Lux secluded, nice event, you know.

SPEAKER_03 8:33

Well, I will I will not disclose all of the ideas, but um the um when when I hear that it's an asset, for me that's the that's the first, it shouldn't be considered as an asset.

SPEAKER_02 8:45

Uh, it is one, yes, but it should be considered as a vector of emotions. When you go on holidays and you spend millions privatizing an island or anything, you don't say that you lost money. You invested money in your uh family, in emotions and in experience. And I'm pretty sure that in five to ten years from now, we will not charter a yacht anymore. We will pay for an emotion, and this emotion will include spending some time on a yacht and cruising on a yacht, yes. But the end point is not the yacht by itself. And I charter some boats in the winter, and I love to spend time with my friend, and just being on board the boat is enough. But when I hear the new generation talking about that, it's not enough anymore. So we will need to, of course, keep the existing clientele that love what you can do with a boat, uh, but we will need to have some diversification into it to fit the demands that we're facing now. And clearly we've seen it the past uh the past few years. We had amazing uh growth after the COVID for lots of different reasons. Um looking for freedom, uh liberty. You don't know if you're gonna last long on the planet, so let's spend the money. Um, but we're seeing as well that we lost a part of uh of our clients. The Russian crisis has been has been part of it, uh, has been a reason for it. The Kai YC has been uh has been another one. So we will need to replace those um those clients. And when we see the penetration rate we have in Yarding compared to uh the gross of ultra-high net worth, we can clearly see that those two curves do not match, which means we're missing something.

SPEAKER_01 10:36

I completely agree. I mean, I remember when we gave our keynote speech in Amsterdam and we saw the C report presenting, and they said, look, our demand is steady, and ultra-high net worth individuals are in numbers constantly increasing. And I said afterwards, I do not know if it was just me, but when I see something stays flat and something goes like this, I see a gap becoming wider and wider. And we both know, uh Arthur, and we talked about this with our research and also for Lex and Lux a long time. Um, a lot of shipyards still believe that they're in the business of building boats. And I always say, no, you're in the competition for vacation time and experiences, and you need to realize that. So, so what's your advice on fixing it besides the things that you already mentioned?

SPEAKER_02 11:29

Well, it's not an advice, it's just that we're seeing the market correcting itself. We've seen um luxury tourism and hotel industry uh going into yachting a few years ago. Uh, they realized that there was a gap that was way too big for them in between what they were offering in the hotel business and the yachting. Uh, we will talk about it uh after that. And then they what what I love about those big industries is that they sink fast and they close the gap. And the gap is we're seeing uh Orient Express. We had them in a conference uh last week in uh in Monaco, and what they did is just absolutely monumental. Um, we had the chance to discuss with the uh person in charge of experience on board the boat, it's not gonna be uh a yacht uh because it's it's not a yacht. You you cannot decide to sleep in this bay or in this bay, so you will not have this advantage. And so to close this this difference, they will sell experience to client that I think has never been done before. So the the yachting for me is not an industry, it's uh it's a craftsmanship niche business. Uh, and so we don't reinvent the wheel. Let's just take the best from the big industry we see around and apply it to our business. And I'm pretty sure it's well, it's working actually in the maintenance side, and I'm pretty sure it's it's working as well in the experience side. So I think they're gonna lead the way um and push everybody uh to a good path.

SPEAKER_01 13:14

No, I do understand where you're coming from, and as I mentioned before, our research pointed out a long time ago when four seasons yachting approached us. They didn't approach us for yachting, they said, can you help us to become the world leader in ultra-high net worth individual travel? For them, C is just another, how shall I say, complementary service to have the complete holistic experience that their clients are looking for. Nothing more, nothing less.

SPEAKER_03 13:46

Yeah, totally.

SPEAKER_01 13:48

But one thing that's interesting to me, and I believe that's something that came out with our first research about the yacht ownership, and that's something that you are very passionate about, is what we consider the complete service ecosystem that comes with the yard ownership experience. Meaning uh the pain always comes from what we would call multiple stakeholders, but when you look at yacht ownership, I remember when we mapped it out, they are all these service, how should I say, relationships and people they are dealing with? A they say it's like running a company. So you run a company for 52 weeks and three weeks of the year you can enjoy it on vacation. I said that's not matching up perfectly, but they say there are too many players. So tell us about this complex service ecosystem because once we mapped it out on a graph, a friend of mine said it looks like a computer motherboard. I said, Well, now you know how yacht owners are feeling. But are they you are right involved in that? So you try to make um, how should I say, you want to get the right noise out and make it a little bit, how shall I say, acceptable in the first step before we can enjoy it. So, how would you go about it?

SPEAKER_02 15:07

Well, first on what you said, let's say that the uh that the owner is the shareholder and then he needs a CEO to brand the company. The CEO, the problem is who is it? Is it your captain? The captain usually does not have full power, so he has a part of the power, then another one has a part of the power, then another part has a part of the power. We all know that leading a company with three people doesn't exist. So you need to have someone in charge. And it's funny using the term ecosystem because I always compare um an economic system to uh an ecosystem you find in nature. Uh, everybody benefits from the system, needs to give, will take from the system, uh, but it needs to find the right uh space and the right amount it needs to take to have the system at equilibrium and have an healthy ecosystem. And that's exactly what we need to find for an owner. We need to generate an healthy ecosystem around him and make all the people in this ecosystem understand um the benefits of serving the interest of the owner. If we are able to achieve this, which is, I have to admit, super complicated looking at the number of people you have involved, um, that's the ultimate goal for me.

SPEAKER_01 16:30

That makes sense. And uh I know I can challenge you regarding that, because whenever we have private conversation after our um we present our research, let's say at Metstrat or wherever, everybody says, Yeah, we need to work together. And then people come to me privately and say, Yes, they all say we would like to work together. And I always reach out to them, but nothing ever happens. You know, it's like the Italian proverb that every village has their own bell tower. So they all realize there's a need, but somehow it seems we cannot get over the hump. What will it take, Arthur, to get over the hump, despite the option, of course, that people will leave and then you need to change, you know.

SPEAKER_02 17:20

Um well, first you need the right person and you need the right system. So let's take the example of the marina we have in Monaco, where we actually generated an ecosystem around owners. We have a turnkey solutions for them, so we remove most of the hustle and the pain. Uh, of course, it has a cost, um, but we deal with the maintenance of the boats, uh, curative and preventive, which allow you to prevent most of the major problem happening on board, uh, clean the boats, um, fill up the tank, do the delivery, organize some trips for the clients. Um, and the second year I've been at Monaco Marine at the marina, I had three clients I recruited from uh Cap Dye who were managing their boat by themselves in the past. So I asked them, how many times do you use the boat and what's the uh the stop of using it? Ah, you know, sometimes it's late during the day and I need to clean, I need to fill up the tank, so I'm not gonna use it. And we realized that those three clients increased the use of their boats from 300 to 700%, knowing that we were taking care of everything. And then it's a virtuous cycle. If the client is using the boat a lot, he's ready to pay for all the maintenance that's needed, uh, and he's gonna enjoy it, and he will never question the price because he's having an amazing time on board, and that's where we need to push people to use the book more, and of course, then to prevent the pain and the hustle. I'm not saying that it's not gonna happen. The question is how you manage this, uh, how you react to this. Um and there's there's lots of ways of doing it. You need to build trust with the client, you need to trust you, you need to bring transparency to gain that trust. Um, and actually, one of the first things I learned from maybe the only mentor I had in my life, he was telling me that um you don't keep a client when everything is going well. Uh, you keep a client when you prove the client your capacity to react. And that's where the client will last with you for 10, 15, 20, 30 years. Uh, because actually, when everything is perfect, they do not realize how complex it is to keep it perfect.

SPEAKER_01 19:34

I always compare it to Wi-Fi. You know, uh, you only complain about Wi-Fi, you only realize Wi-Fi is there when you lose it, you know, when you don't have the connection. And everybody's like, oh, by the way, that works perfectly normally. And um at Lex and Lux, we also try to implement with our clients and help our clients to implement that, but in other industries embraced, and now we're venturing out into the yachting world, and we tell our clients, look, one-stop shopping is pretty much what you describe. Meaning that the clients save, and it goes back to our MEPA framework. You save them time that they can use to create this memorable experience that they all want, and by using that and providing that, we had the discussion. Uh, I gave a keynote speech at the IYBA MEPA summit on Friday, and I had the same conversation that I said, look, guys, this is where you can charge because what our services is not our thing. I said, it's not the service, it's the peace of mind. And let's be quite honest ultra-high net worth individuals, and you are the you come from different industry, you've seen it just like I've been there that got the t-shirt. We see it everywhere else. These kind of post-purchase emphasis, one-stop shopping solution, selling peace of mind. These people will pay for it because they believe it's great value. But is yachting? You are ready for it, but is yachting in general ready for it yet? Do we have in this industry the resources and capabilities that we need, the people that we need to get that going? Or is it more um that we're just gonna sit, consolidate, and wait until uh the bubble bursts and then we change?

SPEAKER_02 21:29

Uh well, unfortunately, lots of people start to change when the bubble bursts. Uh and the really good thing is that human under pressure are never never as good as when they are under pressure. I can I can clearly say that on the boat less than 24 meters, where it can be operated by no crew, just the owner, or one crew, uh, we're already seeing it. And unfortunately, we're seeing lots of owners going back to this size uh with um with. Problem they're facing with the uh with the crew and um and having to run an extra company on the side of theirs. Uh on the big ones, there is some real professional, uh, and the real key for me is to be surrounded by great professionals. The yachting is absolutely amazing when you have the right partner surrounding you, and indeed, it's an absolute disaster when you're not. And the problem is that there's not that much data to find the best partner. There's so many solutions, so it's so easy to get lost for an owner that I completely understand. Uh, lawyers, family offices, management, uh, ownership structure, diverging interest when you're when you're a broker, who do you protect? The newcomers who's the investor of your of your business, or the one who's paying you. Um, so clearly it's it's a super, super, super complicated ecosystem. Uh, and for me, one of the key is to have the least people in charge you can. Uh, so then you have one responsibility and you need one person to take the responsibility. Exactly the same as a company. You have one CEO, and the CEO is managing and taking the decision.

SPEAKER_01 23:17

Yeah. Uh I couldn't agree more with you, Arthur. The idea of having a key account manager is uh pretty much uh only emerging now in Yachting, and everywhere else we look, yeah. How can you not have it? How can you miss that? And in particular, what you mentioned, Arthur, a lot of our research highlights that first-time owners are completely overwhelmed by all of this that's coming. I said, This is what not what I've been sold on. Yeah.

SPEAKER_02 23:49

Well, you know, it's it's terrible to say, but uh for new owners, there is a kind of education to be uh to be done. Uh because as humans, we always compare to what we know, and so many times people uh miscompare yachting. They compare it to cars, they compare it to private jets. Uh, but this is industrial built. Uh Ferrari, they've been testing this car before putting it on the road during a year or year and a half. A yacht, you built it with hundreds of humans, with thousands of human hours, uh, where we all know that we make mistakes, so small mistake for small mistake, at the end is generating some big issues. And for lots of them, they cannot understand that you receive your brand new boat and you're facing problems. Whereas for an educated owner, it will tell you buy a three-year-old boat because the three-year-old boat's been already created from all the warranty, and it's going to be less problem than a new one. But for newcomers, it's impossible to understand, it goes against everything that he knows.

SPEAKER_01 25:00

I can see that. So, your advice how can we fix it in the fastest way possible before it's too late or before we become a side note? I'm being provocative here.

SPEAKER_02 25:16

Well, for me, it's it's managing expectation uh all the time. Don't oversell, uh, deliver as agreed, uh, bring transparency to what you do. Uh, and if there is a problem, it's not a problem to uh, but actually, having a problem will even generate emotions and and some relationship with the client because you will gain more point with the client solving his problem than having everything perfect. So, of course, having a boat, you have salvants, 10 southern, 15,000, 20 southern parts on board the boat. There's nothing like that in your car, in your jet. So, uh, of course, it's gonna generate the let's let's be honest about it. Yes, and it's the ultimate um emotion. Being on board a yacht with your friend is so amazing that of course it has a cost. Uh, it's gonna generate problem, but you will be surrounded by a team who's gonna solve this problem and they're gonna find solutions for you.

SPEAKER_01 26:13

Yeah, I love that you start with the M for the MEPA framework, managing expectations, because it's pretty much where it starts and where it finishes. And one thing that I find amazing is um that I would love more people to look at the outside, and I always realize whenever I speak with clients, I said if something goes wrong, I said, and you mentioned that before in our conversation, if something goes wrong, it's your opportunity to shine. The best brand ambassadors are generated if something goes wrong to see how you manage it, because let's be quite honest, all the time something will go wrong, and in particular there, yeah.

SPEAKER_02 26:58

And you know, there's another misconception. Um, when I talk to clients, they expect to have palace service on board. Uh in a palace, you have 2.7 staff per guest on a yacht all the way to 50 meters, you have less than one for one. So clearly you won't be able to have the service, but it's been sold as palace services. It's not, you will have a different experience. Um, you're gonna have a staff that know you by heart, so you gain some time on this, you gain some quality, uh, but you won't have the palace service.

SPEAKER_01 27:35

It makes sense, it all goes back to managing expectations, Arthur. It was a delight, a pleasure to have you. We uh I'm sure our audience, just like Rebecca and I, are just impressed by your knowledge, you know, especially for a marine biologist. That's why I I love when I said ecosystem, I said Arthur will pick up on that as a marine biologist, and I love the way you described it too. So um, before we sign off, um, everybody is okay if we invite people to get in touch with you when they want to know more about you, in particular the service you're offering for yacht ownership in and around Monaco. Is that gonna be fine? Of course. Marvelous. Okay. So uh last word, come on, give us something, give us a nice sound pipe. What will be next, what will be the next thing that we hear from Arthur?

SPEAKER_02 28:41

No, I can say that we're seeing some really positive uh sign from some change. So clearly, I think we're going the right way. Um and we're gonna see some uh some great change in the next in the next five years. I see as well a lot of new generation getting into the yachting. When I got into the yachting eight years ago, you could clearly see that all the senior were um on the scene and not that many young people. Uh today we see a lot of development going around with new generation with new ideas, and they're clearly shaking uh the yachting industry, which is a really, really good thing to make the uh the industry change. So uh I'm really happy of seeing what's gonna come.

SPEAKER_01 29:27

Excellent. And on this positive note, which I also because uh some listeners will say, man, these guys are all negative about it. We are not. No, we are not, we're just pointing out the flaws because we love the super yacht industry, we love yachting, we love Nautica, we just want to make it better, and there's so much room for improvement, and I'm delighted that I know people like you, Arthur, who do their very best every single day of the week to get us there. So, together I'm sure we can make it. And on this note, ladies and gentlemen, thank you so very much for having Arthur Bohr on this marvelous episode of the Lux Visionaries. And as Rebecca will say, like and subscribe. So thank you so very much for having us. Thank you and sharing your insights. Thank you.

SPEAKER_02 30:20

Thank you so much.

SPEAKER_00 30:21

And that's a wrap on today's Lux Visionaries. If this conversation inspired you or gave you something to think about, please do us a favor. Follow, subscribe, and share it with those who appreciate real insight. The future of luxury isn't coming, it's already here. And we're giving you the front row seat. So until next time, stay bold, stay curious, stay visionary.