Elite Traveler – ET Insider – April 12, 2011
ET Insider – April 12, 2011
Elite Traveler Insider –
April 12, 2011
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.
In this issue:
1. The Independent: Super Rich Earn Up To $24,000 Per Minute
A recent story by The Independent took a look at the income disparity between Ultra High Net Worth individuals and everybody else. I challenge any luxury marketer to read the below and not put a bigger emphasis on marketing to UHNWs.
“Two recent metrics examine 2010 take-home among the super-rich – that top one-hundredth of one percent of Americans whose median household income exceeds $27 million a year, nearly 1,000 times what the bottom 90 percent of Americans make. USA Today’s CEO pay survey and a look at hedge fund manager earnings from Absolute Return + Alpha (AR), a magazine dedicated to hedge funds, both reveal that even as hundreds of millions of Americans remain mired in the recession, top earners, like the companies they work for, are doing better than ever.
“Viacom CEO Philippe Dauman topped the USA Today list, with a combined $84.5 million in pay, between a $2.6 million salary, an $11.25 million bonus and a $70.5 million return on stock options in 2010…
“All told, the 175 CEOs that USA Today collected data on made a combined $1.84 billion, with a median annual pay of $8.8 million. This represents a 26 percent jump in annual pay from 2009; average private industry workers, on the other hand, saw pay raises of 2.1 percent over the same period.
“Meanwhile, hedge fund managers are making money that makes CEO income look pitiful by comparison. The top 25 hedge fund managers in the U.S. made a combined $22 billion, bolstered by surging gold prices and a generally bullish market. This works out to an average of $883 million in 2010 income for those 25 managers, the third-highest in history.
“Far and away the top earner among them was John Paulson of Paulson & Co., who personally made $4.9 billion in 2010, largely in gold. Other hedge fund managers invested heavily in the emerging lawsuit market, lending millions to law firms heading up major class-action suits. Interest on the loans is passed on to the firm’s clients in additional fees, meaning that many plaintiffs who are victorious in class-action suits end up paying for the “privilege” of winning.
“Even assuming Paulson works at the high-end of the industry standard for people working for hedge funds – say, 60 hours a week – his astronomical pay would break down to about $436 per second on the job. It would take him one minute and 48 seconds to earn the median yearly income for American men.”
At $24,000 earned per minute, it is easy to see why UHNWs can be ‘heavy user’ customers for luxury purveyors. And with 411,000 readers who make $1 million + per year, more than any media, Elite Traveler has become the place to make sure your company is seen by this lucrative and larger than expected segment.
============================================================ Not another magazine or newspaper in that stack of unread mail: With over six private jet trips every two months, that’s at least six chances for wealthy private jet travelers to see your advertisement in Elite Traveler. And even better, share it with friends on the jet! ============================================================
2. Private Jets Help Hawaii’s Shaky Economy (From 2 to 70 private jets a day)
While the mainstream media and politicians may like to diss private jets and their users, a recent story by Hawaii Business detailed how elite travelers can almost single handedly bring back and economy, creating jobs and getting things back on track.
Starting with the headline, “Movie stars, billionaires and corporate execs are arriving more often in private jets, and that’s good business for a host of local service companies,” the article noted: “Travel by private jet – a leading economic indicator for lifestyles of the rich and famous – increased by double digits at key Hawaii airports last year, which was great news for dozens of local companies that fuel, feed and ferry these wealthy fliers…
“Takeoffs and landings in private planes at Kona Airport rose 27 percent last year compared with 2009 – the first increase in two years, according to the state Department of Transportation.
“The increase was 16 percent at Kahului Airport on Maui and 14 percent at Honolulu International Airport. Behind those numbers are celebrities such as John Travolta and Oprah Winfrey, says James Pratt, Honolulu’s airport manager. In Kona, computer billionaire Michael Dell and other high-tech entrepreneurs are leading the charge of the flight brigade.
“Private jets can fly you in and out of airports that are much closer to your actual destination, they arrive and leave whenever you want, and your limousine can drive right up to the plane.
“Statewide, landing fees from private jets were up 9.3 percent in 2010, generating $590,586 in income for the state, according to the Department of Transportation.
“Hawaii is a popular private-jet destination for us,” says Greg Johnson, founder of OneSky Jets, a New Hampshire-based company. “People like to be able to go there comfortably when they can. We fly a lot of people to the Big Island. And they are paying north of $100,000 to do a round trip.”
“The most economical options for his clients traveling to Hawaii are chartered jets that cost $4,000 to $6,000 an hour, Johnson says. But that doesn’t include extras such as fuel surcharges, overnight crew accommodations and catering.
“The rebound has been good for business at SpeediShuttle LLC and Arthur’s Limousine in West Maui, says Cecil Morton, the company’s president and CEO. “He says the company has seen a sharp increase in group business from American and foreign corporate executives flying into Maui on private jets. They are booking everything from a Mercedes-Benz Sprinter for 11 people to a Bentley that rents for $400 an hour…
“At Krystal Enterprise Limousine Inc. in Honolulu, owner Clint Chuc also credits flights by business aircraft for the boost his business received at the end of last year, when he started getting more calls to pick up passengers from private planes at the airport. “The money started flowing from tours that would last up to 10 hours,” says Chuc, who charges $70 an hour for a tour.
“In Kona, Clare Bobo, co-owner of Blue Sky Catering, went from laying off one staffer in April 2010 to rehiring that person and adding another in November to keep up with the in-flight catering demands of clients, who include a Hollywood movie director and a computer executive.
“I saw a busy day go from two or three business jets parked (in 1994) to over 70 this past Christmas season,” Sauer says.
============================================================ With 41 trips per year, including 11 intercontinental trips and 3+ principal residences, we know where you’ll find elite travelers: in their private jets and in private jet terminals. It’s why we’ve invested in providing BPA audited circulation to private jets and private jet terminals in over 100 countries. ============================================================
3. The $3 Million 40th Birthday Party. That’s An Elite Traveler
I still always roll my eyes when I see local governments who fail to understand the importance of the UHNW segment to creating jobs. A recent story in The New York Times featured a $3 million party – not including the cost of flying in 200 guests from Europe, the money the guests spent on their own in the local economy nor the hotels they stayed in.
Yes, it was showy. The Times described it thus: “In this decadent, hard-partying playground, Kirsty Bertarelli’s 40th birthday celebration rivaled the best of them. More than 200 guests flew in from Europe. A caravan of limousines ferried them to the site, a flashy waterfront home. The party rocked until 4:30 a.m. It cost $3 million.”
Of course, there were lots of caterers, security personnel, florists and wait staff who almost didn’t have a job that night.
“The day before the party, a routine request to the Fire Department to have paramedics on hand caused the city to review the rental agreement, and then threaten to shut down the affair with a police roadblock.
“Summoned on a Saturday afternoon for a rare party-related emergency hearing, Circuit Judge Jose R. Rodriguez listened as lawyers explained that the Bertarellis had no idea their one-night house rental was illegal in Miami Beach, a claim that no one disputed. The judge, holding the ordinance to be ambiguous, swiftly dispensed with the case: The party should go on.”
Of course that didn’t stop Miami’s mayor from being upset that millions of dollars were being pumped directly into the city’s still ailing economy: According to The Times, “The mayor, Mattie Herrera Bower, is incredulous. “If you have enough money, you can get a lawyer to get a judge to break the law,” she said.
The owner of Five Star Island also took offense to the Mayor’s hysteria: “Instead of harassing me and threatening me with lawsuits, the city should thank me for bringing some much needed revenue and hundreds of new jobs to Miami Beach,” said Mr. Kramer, whose investments in the early 1990s helped spur South Beach’s revitalization.
As for the city’s leaders, he had a not-so-gentle reminder: “I bought 16 of the 20 lots on Star Island and transformed it from a trash dump into an exclusive gated community with the multimillion-dollar homes of celebrities.”
============================================================ Spotting Fakes: How can you be sure that a publisher is really sending out the number of copies he or she says? How can you make sure they are actually putting copies on private jets? Ask for the BPA or ABC audit statement. You can find our BPA statement here. ============================================================
4. In Sanya, Elite Travelers Take Off The Chinese Way
Elite Traveler has a 10 year track record serving elite travelers aboard their private jets in Asia, so naturally we are excited about the launch of Elite Traveler Asia this June, complete with 100 percent original editorial content specifically written and edited for our Asian elite travelers. And of course, last fall’s launch of Elite Traveler Superyachts is exciting as China and Asia become a more important consumer market for the superyacht industry.
Private jets descended on Sanya International Airport in the resort town of Sanya before zipping off in a parade of chauffeured BMW’s of various models including the four-door version of the M3 and the 5-series Gran Turismo.
According to The Wall Street Journal, “Almost 150 exhibitors are displaying their yachts, private jets and other luxury toys. Sponsors include Martell Cognac, BMW and Chopard. The show is open to anybody who will pay a 180 yuan fee ($27), but many of the visitors have been invited by the exhibiting brands – some of the elite guests, known as “jet VIPs,” were flown to the resort by private charter plane.
“The best-heeled at the show were also given private tours by show organizers. One man who looked to be in his late 30s, sporting Salvatore Ferragamo loafers and a black Prada over-the-shoulder bag, was shown towards the docks, where he asked his guide: “And where are the biggest boats?”
“Among the sales teams of some of the world’s top yacht makers, the mood is buoyant-thanks to the rising tide of Chinese wealth.
‘”It’s exciting,” said Veerle Battiau, director of London-based Virtruvius Yachts, who was visiting the show for the first time. “We knew we had to come see this, and that we couldn’t ignore this market any longer. And in this country, the rich-they’re so young, much younger than what we’d see in Europe.”
“Sunseeker China has 4 boats on display – more than any other company – including an 88-foot yacht that costs around $6.5 million. On board each of the Sunseeker boats, a model in a black bikini poses on the deck. Joyce Yuan, marketing manager of Sunseeker, says the company hopes to sell six boats at this year’s show, up from four last year.
“It’s a similar story at Simpson Marine, a Hong Kong-based broker that also has offices in China. Mark Woodmansey, a brand manager with the brokerage, said he has already sold three boats on the first day. The three, made by Italian maker Azimut and in the 40-to-60-foot range, cost $1.4 million and above. Mr. Woodmansey said several potential buyers have been sniffing around a 100-foot yacht – a boat that would set you back $10 million to $11.4 million.
============================================================ Would you buy a diamond without a certificate? Would you fly on a plane that hadn’t been certified as safe to fly? Would you buy milk in the supermarket that didn’t have a ‘sell by’ date? Before you buy advertising, next time a publisher says they have distribution on private jets or in private jet terminals, ask for their Circulation statement from ABC or BPA. Ask for them to show you the number of copies going to private jet travelers. You can find our BPA statement here. ============================================================
All the best,
Douglas D. Gollan Group President and Editor-in-Chief