Elite Traveler – ET Insider – April 11, 2006
ET Insider – April 11, 2006
Elite Traveler Insider –
April 11, 2006
By Douglas D. Gollan, President and Editor-in-Chief, Elite Traveler Magazine – serving the private jet lifestyle…
Welcome to the latest issue of Elite Traveler Insider, the bi-weekly newsletter designed to update our top partners on trends in the elite luxury market. This information is provided to offer a better understanding of how to target the Elite Affluent market, its impact on your business and other trends that affect you. Remember, that private jet travelers are paying up to $10,000 per hour to fly by private jet, so these über wealthy consumers could be and should be your best customer. We talk about them and how you can get more of them and more from them.
Famous elite travelers recently spotted reading Elite Traveler in private jet airports: Gwyneth Paltrow, Jessica Simpson, Katie Holmes, Paris Hilton, Dave Matthews, Jennifer Lopez, Heather Locklear, Kid Rock, Jewel, Nicole Richie, Beyonce Knowles, Shakira, Salma Hayek, Arnold Schwarzenegger, Goldie Hawn, Jay Leno, Bill Clinton, Jerry Seinfeld, and Elton John.
“They love the magazine. We have people show up at the first of every month just to get the next issue and they even take a few back to their friends and family!
-Stephanie Nieves, Sebring Airport Authority
1. The Wisdom of US Airlines is Good for Private Jets….
If I were an executive at a private jet company, I would send a wonderful holiday gift each year to the top executives at US airlines. With each move they make, it is almost as if they must think, “How can we really piss off our customers?” Then they couch the announcement in phrases such as “Based on customer feedback.” Well Northwest – or as flyers of the airline know – Northworst – is now charging for premium aisle and emergency row seats. Even better, if you change your flight or if you are one of their top customers who later secures an upgrade, the fee is non-refundable. Delta, which tried and failed to launch an “airline within an airline” called Song, is front-and-center when it comes to bad service and bad ideas. For example, remember the Song store in New York’s SoHo district? Just what you want – a store run by an airline – that was trying to encourage you to book on the web. Hmm, interesting. Well Song’s last song is being sung, and the one small upside is Delta is putting first class seats back into the Song planes as they are being put back into the Delta fleet. So what lessons did Delta learn from Song’s failure? According to Joanne Smith, Delta’s vice president of consumer marketing, “Another key learning from Song is that our business customers want the option of First Class – particularly on long-haul flights.” All I can say is that most of us probably could have figured that one out without having to madden frequent flyers by cramming them into economy seats between New York and the West Coast. Is it any wonder rich people fly by private jet today?
“Our clients enjoy reading the magazine cover-to-cover. They enjoy the high quality and look forward to the Hotel, Spa and Resort issues which are an extra perk”
-Jeanette Wuisman – Landmark Aviation, Dallas, TX
2. Private Jet Traffic Jams and Who’s Aboard?
Private jets are taking over as the chariot of the super wealthy as the iron horse left the four legged variety in the dust in the 1800s. A recent article in the Wall Street Journal citing the proliferation of private jet travel in the US projected that within five years there will be some 400 private jets arriving in Las Vegas’ McCarran Airport daily, making up nearly 20 percent of movements. That’s in addition to private jets that land at several other nearby private jet airports. Other commercial airports that expect to see big increases in private jet travel include Midway Airport in Chicago with 355 daily landings expected and Love Field in Dallas with 350. And who is aboard these private jets? When Cartier’s Worldwide CEO was recently asked by a reporter if the jeweler had flown in its top customers (estimated to spend over $1 million annually) First Class for a special VIP reception in Paris, he responded that they all came on their own in their private jets.
Elite Traveler is distributed aboard private jets worldwide with BPA audited circulation via over 1,000 private jet airports from Dallas to Delhi and Paris to Palm Beach. In fact, we have over 4,000 distribution points featuring private jet terminals (FBOs), caterers, fractional ownership and jet card companies, charter operators, corporate flight departments, aircraft management companies and directly to owners through their pilots who place Elite Traveler aboard their jets. What’s more, we are on private jets small and large from Learjets to privately owned 747s – yes 747s. In other words, Elite Traveler is the only worldwide magazine that delivers luxury’s top customers to you and brings your marketing message front and center with these elite travelers as they relax aboard their private jet!
“Fascinating, they always want to buy something they see. The products offered and destinations are just what my customers are looking for!”
-Mary Bullock Bagosy – Galaxy Aviation, Orlando, FL
3. Travel + Leisure Readers Count Pennies and Nickels…
Yes, there is the old adage that a “penny saved is a penny earned,” however with a $1.74 million Median Household Income, we know Elite Traveler readers make a lot of money and our research shows they spend a lot. In fact, Prince Research shows our average reader spends over $200,000 annually on watches and jewelry and a similar amount on hotels, resorts and spas. Thus, it is with great contrast Travel + Leisure readers who take home less than $100,000 after taxes will have a new columnist. According to Crains, Travel + Leisure has hired Money Magazine editor-at-large Jean Chatzky and is getting “more budget-conscious.” Among the planned topics: How much to tip and how to make the most of frequent flyer miles. Sorry Jean, you don’t get any miles when you fly by private jet. But I’m sure T+L’s budget-constrained readers will appreciate the tips!
And speaking of tight budgets, The Wall Street Journal on March 11 followed up our recent series on how ballooning mortgage payments are forcing the mass affluent – folks who make less than $200,000 per year – to tighten their belt. The story projects one in eight households with adjustable rate mortgage payments that originated in 2004 or 2005 will default and notes “resets” of mortgage rates upwards will “eat into discretionary spending.” Other factors putting the squeeze on pocket books of the mass affluent include rising property taxes and increased energy costs. In fact, the article notes some 1.4 million mass affluent households will face increases in mortgage payments of 50% based on adjustment of their interest rates. Fed Chairman Bert Bernanke noted the cooling of the real estate market means that the Mass Affluent can’t rely on increases in home value – and equity to fuel spending, and thus will be forced to save to pay bills.
For luxury marketers, it means the focus on high income earners – particularly consumers with a Household Income of over $1 million – will be more important than ever as the spending of these consumers will enable luxury marketers to grow even as mass affluent cut back. And on that note, it is worth noting Elite Traveler delivers 300 percent more million dollar earners than Departures, Town & Country and Robb Report combined!
“Other publications fail in comparison when compared to Elite Traveler magazine.”
-Samuel Huskin – Flower Aviation, Colorado Springs, CO
4. Mass Affluent Net Worth Stuck in Neutral, Maybe Heading Backwards…
At Elite Traveler we highly recommend that luxury companies focus on and define a meaningful marketing strategy to target the Elite Affluent – those folks who have a Net Worth of at least $10 million. And we don’t mean just throwing a party here or there or making a donation to a couple charities. The Elite Affluent are the biggest spenders in the world. In fact, they are very concentrated – for example, only 100,000 Neiman Marcus customers account for over 50 percent of sales. And today, we know most of these folks fly by private jets, so magazines such as Elite Traveler make them easy to target.
Now what about the Mass Affluent – those folks who trade up and splurge on an occasional Hermes tie or add more credit card debt for a pair of Jimmy Choos? Well, the Federal Reserve reported Mass Affluent Net Worth (the difference between Net Assets and Net Liabilities) grew by only 1.5% during the 2001-2004 period, about one-tenth of the growth as in each of the previous three year periods. Most concerning was the rise in home values as a primary driver in the 1.5% growth number off-setting declines in stock portfolio and increases in credit card debt. So with the housing market cooling, the Mass Affluent (Households with under $200,000 Household Income) – the primary readership of titles such as Vanity Fair, Condé Nast Traveler, Robb Report, Town & Country, Departures, Travel + Leisure, Vogue and others – will be feeling quite a bit less wealthy. The likely result is these consumers will be much more price conscious, meaning the super rich – the one-half of one percent who control 50% of the wealth – will play a critical role in deciding which luxury brands prosper and which ones feel the pain.
“I’ve had to increase my copies because the magazine goes so fast. I try to keep one for myself when I can. The pictures inside are so breath-taking.”
-Donna Reed – YYJ-FBO Services, Canada
5. You Have to Have Money to Spend it…
Anyone can be infatuated with a $10,000 watch, but if you don’t have $10,000 to spare, you won’t be wearing it. And keep in mind, you have to earn $20,000 before taxes to buy that $10,000 timepiece! With that in mind, here are the Top 5 magazines by Median Household Income:
1. Elite Traveler – $1,724,000 2. Departures – $188,000 3. Robb Report – $184,000 4. W – $155,000 5. Architectural Digest – $144,000
Sources: Elite Traveler – Prince 2005; Others – MMR 2005