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ECONOMICALLY SPEAKING BY MAKING SURE YOUR SUPERYACHT OPERATES EFFICIENTLY, BURGESS YACHT MANAGEMENT CLAIMS TO SAVE YOU BOTH EFFORT AND EXPENSE. BUT IS THAT CLAIM JUSTIFIED? BY CARRIE WORRALL In the present economic climate, a yacht owner looking to control or reduce the costs of superyacht ownership might be tempted to see yacht management as an unnecessary expense. Mark Binnie, Director of Yacht Management at Burgess, counters that his team delivers considerable economic benefits to yacht owners, with certainty and visibility of operating costs, protection from financial risk and maintenance of re-sale value. Of course, he would say that, wouldn’t he? But with over 60 yachts currently under Burgess management, clearly many owners agree. So let’s examine exactly how and where professional yacht management earns its keep. The Burgess service is structured around five specialist disciplines, each geared to streamlining yacht operations. How does each of them deliver value? 1 Marine Operations The major benefit here is cost certainty. By maintaining insurances and Flag State certification, and through careful planning, the team aims to protect owners from unexpected large costs including legal claims. In the event of an incident, the Flag State or court will ask ‘did the owner behave in the manner of a responsible ship owner?’ Having a professional manager in place offers strong liability protection. Conversely, hiring an incompetent or inexperienced manager will afford no liability protection! Burgess can also reduce costs through co-ordinated procurement for anything from provisions to entertainment subscriptions. Yacht crews are very busy, with limited time to spend researching suppliers. Yachts not maintaining meticulous records and certification may be fined or detained under today’s more rigorous Port State Control Inspections. ” The greatest savings ” The shore-based manager, with the benefit of the team’s pooled knowledge, is better placed to carry out a global search across multiple suppliers. This delivers direct savings on items such as fuel, charts, insurance and bespoke items of high value. Some companies even offer discounts in order to have their product associated with Burgess. 3 Accounts Cost control is important to all yacht owners and Burgess has the experience to prepare realistic and accurate budgets based on the size, type and planned usage of any yacht. From managing purchase order systems to monitoring yacht credit card spending, good accounting is the basis of efficient yacht operation. “Many owners operate their yacht as a stand-alone business apart from their other business interests,” notes Mark. “Owners’ accountants can do the work, but with over 25 years of worldwide yacht operations, we know what things ‘should’ cost and can pick up discrepancies that a non-specialist would miss.” Another consideration is that many retailers will extend credit to a yacht managed by a reputable company like Burgess. If the yacht tries to purchase directly they are often requested to pay up front. 2 Technical Management Burgess offers 24/7 technical support for their managed yachts and will also undertake a preventative maintenance regime, on the basis that it is far more cost-effective to maintain proactively than to repair reactively. Mark Binnie has seen this many times. “At Burgess we strongly recommend the use of a computerised planned maintenance system on all our managed yachts and most owners are keen for the benefits this brings.” There are examples of things going wrong aboard self-managed yachts without planned maintenance. “One such yacht was cruising in Italy a few years ago when both generators failed catastrophically at the same time. The cost of replacing them far outweighed the cost of maintaining them properly. Worse, the owner spent the remainder of his holiday taking day trips from the shipyard.” Burgess’s 24/7 technical support has helped avert major technical problems, reduced downtime and resulted in major savings for owners of managed yachts over the years. “Using our experience and the technical data held on file, our technical team can talk crews through trouble-shooting procedures including such issues as re-starting main engines, generators, air-conditioning, sewage plants and other essential engineering systems.” The value of technical services is also realised at the time of sale. “Any concern about reliability will deter offers,” warns Mark. “Buyers will also use the highest estimates for essential work to leverage down the sale price.” On the other hand, yachts that are properly maintained to the highest standards, with well-documented maintenance regimes and up-to-date certificates will hold their value and sell more easily. come from ensuring that purchases are made wisely from reliable, quality suppliers. yacht management { 94 }


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