Elite Traveler – ET Insider – April 17, 2007
ET Insider – April 17, 2007
Elite Traveler Insider –
April 17, 2007
Elite Traveler Insider
By Douglas D. Gollan, President and Editor-in-Chief, Elite Traveler Magazine
Welcome to the latest issue of Elite Traveler Insider, the bi-weekly newsletter designed to update our top partners on trends in the private jet lifestyle. This information is provided to offer a better understanding of how to target these globetrotting elite travelers, their impact on your business and other trends that affect you. Remember, private jet travelers are paying up to $10,000 per hour to fly by private jet, so these super rich 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.
“I’m down to a little more than a billion. You can get by on that if you really economize and don’t buy a lot of planes and yachts and stuff” – March 10, 2007, Ted Turner on CNBC’s “High Net Worth”
“We have made two significant sales based on leads from your magazine… The total value of the pruchases is over $15 million!” Myles Newell — The Ginn Company
1. Harry Winston Sells $95,000 Necklace to Elite Traveler Reader…
We all quite liked our March/April cover featuring a gorgeous Harry Winston necklace. However, we were not alone. Not only was Harry Winston thrilled about the editorial coverage, one of our readers took a shine to the shiny diamonds as well and walked in with his copy of Elite Traveler and wrote a check out for the $95,000 necklace on the spot. It’s what we call “the private jet lifestyle.”
“We have made two significant sales based on leads from your magazine… The total value of the purchases is over $15 million!” Myles Newell — The Ginn Company
2. For the Swiss Watch Industry, Tourbillons + Super Rich = $$$
As journalists and retailers from around the world descended on Basel for its annual Watch Fair looking for trends, one fact became clear very quickly to me: Tourbillons are today’s de rigueur timepiece for the Super Rich, and this ultra-expensive, very traditional watch complication is being made available in a wide variety of non-traditional forms to attract the varied tastes of your average centa-millionaire.
The tourbillon is considered one of the most difficult and time-consuming watch complications to make. However, the movement created by Abraham-Louis Breguet over 200 years ago, has quickly become a favorite of the Super Rich. Designed to counterbalance the effects of gravity on the accuracy of a watch’s timekeeping, the tourbillons takes the form of a spinning cage which, with an open case, is an attention-grabber that might be considered the equivalent of a 25-carat diamond ring on a woman’s finger.
Once only the domain of traditional watchmakers such as Patek Phillipe and Breguet or Blancpain, this bling movement has become a way Super Rich can ensure the watch they’re wearing is noticeably different from the ones that most of us wear.
Of course that is if you even wear an expensive watch. Less than one-quarter of one-percent (0.25%) of American households-some 318,000-spent even $5,000 for total watch purchases in 2005, according to the MMR Affluent survey.
Contrast that to the Super Rich who are big spenders on luxury watches to begin with. According to research by Prince & Associates, owners of private jets and private jet shares spent on average $147,000 on timepieces of all shapes and sizes during the same period.
Starting on the low end around $70,000, most tourbillons cost well over $100,000 and now are frequently offered into the half-million-dollar price range and higher.
Whereas most watchmakers only offered one or two of their models with a tourbillon, Breguet now has 12 different models that feature tourbillons and Blancpain has 11.
The number of tourbillons being made and sold is apparently skyrocketing as well. While many watchmakers won’t disclose exact figures, Jacquet Droz went from one limited edition tourbillon with eight pieces last year to two tourbillon models with 28 pieces each. Harry Winston has been making a play for serious-and rich-male watch buyers for nearly 20 years. Its flagship Glissiere tourbillon retails for $267,000 and this year it will make over 200 tourbillons. Chopard produces some 100 tourbillons per year for its ultra-luxe customers. Greubel Forsey is a niche watchmaker that makes only tourbillons, and a representative quickly points out in the world of tourbillons, “not everything has been done.” In the race for even more accurate timekeeping it used Basel to show its 24″ Incline in which the tourbillons spin every 24 seconds, a somewhat supersonic speed, and is positioned at a 25-degree incline. The company this year is increasing production by over 50 percent. BLU launched its BLU Majesty Half Flying Tourbillon selling for some $225,000, while increasing its annual production from 24 to 60.
Bell & Ross, known for its stylish pilot watches, for the first time launched a tourbillon and in two days was claiming over 50 orders from retailers, each requiring a 50 percent deposit. The watch retails at $131,000. Cuervos & Soubinos also debuted its tourbillon at $131,000 in a limited edition of eight. Romain Jerome debuted its Titanic DNA watches using iron and coal from the legendary liner with three limited editions of nine tourbillons each.
Tourbillons Go Flash: Damon Dash’s Tiret used Basel to offer 12 one-of-a-kind tourbillons starting at $195,000, while Jacob & Co. showcased a quarto tourbillon (four tourbillons in a single watch) for slightly over $500,000 plus a diamond-encrusted tourbillon for over $1 million. Corum was offering a Billionaire tourbillon priced at $995,000, that was snapped up by a prominent Florida retailer. Meanwhile Zenith, which has become a darling of editors with its flashy designs from flamboyant CEO Thierry Nataf, was showing off some “well-priced” tourbillons in the low six figures.
Technomarine, which rose to fame by combining diamond watches with colorful plastic straps crossing fun, fashion and sophistication, showed off a Hummer-branded tourbillon. Legendary Jean-Claude Biver, who revived the Swiss watch industry by bringing back Blancpain more than two decades ago, is continuing the renaissance he brought to Hublot using the tourbillon as his center stage at Basel this year. Biver followed up on his $170,000 Platinum, Red Gold and Ceramic tourbillons of 2006 with the Million Dollar Big Bang, Hublot’s signature Big Bang encrusted with diamonds and priced at a cool million. By the end of the weekend, seven of the seven-figure watches were reportedly sold.
Of course tourbillons are not just for men. Chanel offers a $685,000 ruby-encrusted tourbillon to its trendy line of ceramic watches that start at just under $5,000. And for those men who don’t need to show their tourbillons to gain status with friends and onlookers, Greubel Forsel launched a Double Tourbillon at over $300,000. It has a closed faced and looks like any other automatic watch so the wearer doesn’t have to be bothered explaining to onlookers about what he’s wearing.
As you think about the above, keep in mind that according to The National Association of Realtors, the Median Home Price in the U.S. is $225,000, or as they would say in the Basel, slightly more than the average tourbillon.
“Very beautiful magazine, our CEO’s wife loves it when the new shipments arrive, it’s her favorite magazine” Ronn Nelson — Northwestern Mutual Air, Operations Milwaukee, WI
3. Scandal Offers a Glimpse into Super Rich Lifestyle…
Sometimes scandal gives us a glimpse of how the Super Rich spend money. As part of his trial, former press baron Conrad Black ran up a bill of at least $8.4 million every year flying his corporate jet, including trips to an island in the South Pacific and the opera in Seattle, a court was told.
Lord Black of Crossharbour routinely billed the company when he took the jet to travel to his estate in the Florida resort of Palm Beach, a government witness testified.
One trip that caught the attention of authorities was a $565,326 jaunt to Tahiti where Black’s company had no business operations. Records show Lord Black and his wife, Barbara Amiel, took a round trip from Teterboro airport outside New York to Seattle, Honolulu, Tahiti and Bora Bora.
Why stop in Seattle when their jet could fly nonstop New York to Hawaii? The Blacks’ brief stover was to attend the Opera.
“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
4. The Super Rich are Doing You a Favor: MSNReport
While many parts of the Mass Affluent consumer base in Europe, the U.K. and the United States are hesitating on spending amidst the meltdown in adjustable rate mortgages, home prices and increased credit card debt, the Super Rich may be saving the global economy from a recession, according to an MSN report.
The Super Rich spend so much more of their mountains of money, according to a new line of thinking among academics, that they may provide a public service by smoothing out the little dents and valleys in the global economy. As Russians, Chinese, Indians and South Americans join super-rich cousins from the U.S. and Europe due to the rise of emerging markets’ industrial might, worldwide recessions have become much fewer in number and far slighter in severity than in past decades.
Just when many average people in the United States or Europe are slowing down their consumption of goods and services due to the loss of a job or pending home foreclosure, there are an increasing number of super rich worldwide to fill in the spending gap. According to the report, call it the “trickle down” theory.
According to research by Ajay Kapur, an analyst at Citigroup, the wealthiest one million people in the world account for as much spending as 60 million other households. The disparity between the bottom 99% and the top 1% has made any other class distinctions in the richest countries almost irrelevant. Welcome to the new world “plutonomy,” where economic growth is powered by, and largely consumed, by the wealthy few.
Money in U.S. home prices could sink the U.S. economy, for it only takes one new free-spending Mumbai or Moscow zillionaire to make up for tens of thousands of faltering Americans missing their mortgage payments.
Fortunately, there are plenty more than that in Russia alone. The swift rise in the value of natural gas — sometimes called “blue gold” — as well as nickel, aluminum and titanium, has helped create at least two dozen Russian billionaires and thousands more multimillionaires who are spreading their wealth around.
In the United States, the share of total income going to the richest 1% of Americans rose to a record 17.4% in 2005. Meanwhile, the average worker’s take-home pay, adjusted for inflation, has advanced just 0.3% since 2001 while the economy has swelled by 16%.
Of course Elite Traveler is wherever the newest billionaire is via our BPA — audited distribution aboard private jets in over 90 countries around the world. With some 400,000-plus readers, how many Super Rich customers would you like?