Goals from Argentine midfielder Roberto Pereyra proved to be the difference between the two sides, with the travelling Seagulls lacking a killer instinct in the final third, something which Hughton was all too eager to point out after the final whistle.
"I thought we were second best in most departments," Hughton said, quoted by Sky Sports. "We had a good period 20-25 minutes before the end of the game but when we did get into good areas we weren't able to produce that quality.
"Watford deserved their victory and we've got a lot of work to do.
"I don't know why we were off the pace. Our preparation was probably the same as Watford's, we had a good week coming into the game, we probably didn't score enough goals in pre-season, but in regards to players being up to speed we've got no excuses.
"We were up against a Watford team who were better than us in most departments and when that happens you're vulnerable at this level."
Despite a disappointing result for Brighton, two silver linings for the Seagulls were debuts for the club's two most expensive signings over the summer; Alireza Jahanbakhsh and Yves Bissouma.
Fellow arrival Bernado also impressed on the left side of defence early on, although an injury to Bruno forced the young Brazilian to play out of position for the majority of the match - and it showed.