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Elite Traveler – ET Insider – August 29, 2006

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ET Insider – August 29, 2006

Elite Traveler Insider – about the private jet lifestyle …

August 29, 2006

By Douglas D. Gollan, President and Editor-in-Chief, Elite Traveler, the private jet lifestyle 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, that 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.

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, that 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.

  1. Unity Marketing: Consumer Confidence Plummets in Second Quater
  2. Private Jet Bookings Continue to Soar Weeks After London
  3. Adjustable Rate Mortgages Impact Mass Affluent Finances
  4. U.S. Home Sales Fall to 14-Year Low.
  5. As Super Rich Build Homes Bigger than Ever.
  6. Australia’s Super Rich Getting Richer. 

“Other publications fail in comparison when compared to Elite Traveler magazine.”

– Samuel Huskin – Flower Aviation, Colorado Springs, CO

Unity Marketing: Consumer Confidence Plumments in Second Quater

Continuing turmoil in the world and growing doubts about financial direction in the country spurred a 14 point drop in the Luxury Consumption Index, a quarterly survey by Unity Marketing tracking over 1,000 mass affluent consumers who have an average household income of $147,000. 

“All values used to calculate the Luxury Consumption Index dropped sharply in Unity’s most recent Luxury Tracking survey,” according to Pam Danziger, president of Unity Marketing and author of the soon to be published  Shopping:  Why We Love It and How Retailers Can Create the Ultimate Shopping Experience.  “How they feel about their personal financial health dropped.  How they feel about their prospects over the next 12 months dropped.  Their expectations about future spending on luxury dropped.  But most significantly, luxury consumers’ feelings about the financial health of the country declined the most.  At the close of the second quarter, nearly half (47 percent) of luxury consumers believed the country was worse off compared to three months ago.  Only 16 percent felt it had improved,” Danziger said. 

Commenting on the decline in the consumption index, Thomas Bodenberg, Unity Marketing’s economic forecaster said, “A number of factors contributed to luxury consumer worries.  On the home front, gasoline prices have remained high which threatens more price inflation.  They also faced a decline in the housing market, electoral uncertainty as the election season starts to heat up and a reduction in the rate of economic growth.  Luxury consumers too are worried about the long term impact of continued unrest in the Middle East,Iraq, and Afghanistan.” 

“Women have complimented the jewelry.  The following companies keep Elite Traveler in their aircrafts – Net Jets, Charter Communications, Lockheed Martin, US Dept. of Treasury.”

– Anah Joffroy – Signature Flight Support, Englewood, CO

 Private Jet Bookings Continue to Soar Weeks After London

According to numerous reports, continuing UK flight delays and baggage policies for carry-on luggage that differ from virtually everywhere else in the world have kept the demand for private jets high.  

Private jet operators and airports which cater to the business market saw bookings double in the days after Thursday’s security alert and are still reporting levels about 50 percent higher than before, now two weeks later. 

London’s Biggin Hill airport is seeing a 150% increase in private jet flights with an average of 100 departures each day compared to its normal 40. Customers included directors of multinational firms, investment banks and several stag parties, with destinations including North America,

Sweden and Israel.  “We saw a real mixture of customers, both leisure and business,” said Robert Walters, the airport’s business development manager.  “People had to charter aircraft because they couldn’t fulfill their itineraries at the main London hubs. Businessmen are traveling to tight timescales and cannot risk having delays occurring, which have occurred in recent times.”  

“I’ve seen a lot of people reading Elite Traveler; they love the magazine they can’t believe our FBO gives it away for free” – Carol Hammonds – Hammonds Air Service, Houma, LA

Adjustable Rate Mortgages Impact Mass Affluent Finances.

Despite concerns from regulators, lenders continued to issue large numbers of so-called option ARMs during the first five months of the year, new data shows.

 

An option ARM is an adjustable-rate mortgage that gives borrowers multiple payment choices each month, including a minimum payment, an interest-only payment and a standard mortgage payment. The loans often feature a low introductory rate that is used to set the minimum payment in the first year.

 

Many borrowers have been attracted to these loans because of their low introductory rates, which have run as little as 1%. But borrowers who elect to make the minimum payment can be hit with a rising loan balance. They can also face “payment shock” down the road, when their monthly payment resets. Roughly 75% of borrowers with option ARMs are currently electing to make the minimum payment, according to UBS AG.

 

The loans’ popularity comes as rising interest rates are making them less attractive. Many lenders have boosted their introductory rates to 2% or more. Once the introductory period ends, the true interest rate on the loan can be more than 7%, according to HSH Associates, financial publishers in Pompton Plains, NJ That is well above the current 6.64% average rate on 30-year fixed-rate mortgages, according to HSH.

 

There are already signs that some borrowers who took out option ARMs are running into trouble. Foreclosure rates for option ARMs “are rising fast,” according to a report issued last month by Credit Suisse Group. Option ARMs are going into foreclosure an average of 10 months after the loan is made, earlier than for other types of loans, and that is “a cause of concern,” the report said.

 

The worry for luxury marketers:  As payment rates are re-adjusted, Mass Affluent consumers have substantially less income every month to spend on non-essential goods and services.  The strategy for luxury marketers:  Focus on the very high-end who can spend in good times and bad.  This top of the pyramid has deep spending pockets-and for them, a luxury lifestyle is a necessity.

“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

U.S. Home Sales Fall to 14-Year Low.

While private jet travel among the rich is booming, and the size of their homes seems to be getting bigger, The National Association of Home Builders’ index for U.S. sales of new, single-family homes fell in August to 32, its lowest point since February 1991 when the economy was in recession.

 

Meanwhile, the slowdown in the once-sizzling housing market is spreading, with 28 states and the District of Columbia reporting spring sales declines, led by big drops in former boom areas of Arizona, Florida and California, according to a report from the National Association of Realtors.

 

The housing market index, compiled by the NAHB and Wells Fargo, was down seven points from July’s unrevised level of 39. August was the seventh straight month of declining builder confidence, as gauged by the index.

More potential buyers are taking a “wait-and-see” approach to the market, and high energy prices also seem to be weighing on demand, according to analysts. In addition, real-estate investors and speculators are withdrawing as expected after a big influx in 2004-05.

 

The index was based on a survey of 436 home builders, who answer questions about sales prospects now and in the near-term. When the Housing Market Index is under 50, it means the number of builders who see “poor” sales outnumber those who see “good” sales. It has been under this threshold since May.

 

Within the NAHB’s Housing Market Index, the component for present sales of single-family homes fell seven points in August to 36. Meanwhile, expectations for sales in the next six months decreased six points to 40, and the traffic of prospective buyers fell six points to 21, the NAHB said.

 

The NAHB index fell during August in all four regions of the country. It was down three points to 34 in the Northeast, down five points to 15 in the Midwest, down nine points to 41 in the South and down ten points to 42 in the West. The numbers are adjusted for seasonal variations.

 

Nationally, existing-home sales were down 7 percent in the April-June quarter this year compared with the same period in 2005, the National Association of Realtors said Tuesday in its latest state-by-state look at housing conditions around the country.

 

The survey showed that the biggest declines occurred in states that had been enjoying red-hot sales during the five-year housing boom. The five biggest declines this spring compared to the April-June period of 2005 were Arizona, down 26.9 percent; Florida, down 26.7 percent; California, down 25.3 percent; Virginia, down 23.9 percent, and Nevada, down 23.5 percent.

“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, W

As Super Rich Build Homes Bigger than Ever

You would have to travel back to Buffalo’s Golden Age, to the grand mansions of Delaware Avenue’s Millionaire’s Row and the sprawling country homes of the old money elite, to find a 17,000-square-foot home being built in this region.

 

Or you could drive to nearby Clarence. Nine times the size of a typical American home, the biggest house built here in more than a century will roll out the welcome mat in a year or two along a country road in Clarence.  Among its features: an Olympic-size indoor pool and another outside; an athletic court, possibly either for basketball or rauqteball, in the basement; a master bedroom and suite that, at 638 square feet, is nearly as big as some of the first suburban homes.  And that doesn’t include the master suite’s 1.5 bathrooms and a walk-in closet twice as big as the average American bedroom. 

 

“It certainly rivals some of the homes of yesteryear,” said Joseph McIvor, executive vice president of the Buffalo Niagara Builders Association.

“People thought it was going to be a Hampton Inn at first,” Clarence Councilman Joseph Weiss said. “It’s that huge.”

 

Situated on seven acres just off Goodrich Road, the home is being built by a young couple with roots there. Ludvik Karl’s family runs a Prague-based international company called Preciosa, which specializes in crystal and cut glass products, according to the couple’s 1991 wedding announcement in The Buffalo News.

Tax is estimated at $78,000 a year for their new home, or to put in perspective – more than the after-tax full year income of the average reader for Town & Country, Conde Nast Traveler, Travel + Leisure or Vanity Fair!

 

“I love to see our client’s reaction; they go crazy for the magazine. It inspires us here to make it rich some day”

– Jennifer Masse – Sun Western Flyers, Bullhead City, AZ

Australia’s Super Rich getting richer

A new report shows Australia’s super rich are earning a larger share of national income than at any time since 1950 – and the huge salaries paid to chief executives are a key reason.

 

In 1992 the salaries of chief executives were 25 times the average worker’s salary – but by 2002 they were 100 times the average.

In the 2003-04 tax year, the richest 1 percent of individuals earned 9.2 percent of individual income – up from 8.8 percent in the previous year and double their share of 25 years ago.

 

“The rapid rise in Australian CEO salaries during the 1990s suggests that much of this recent increase may have been caused by higher executive pay,” they said.

The chief executive of Louis Vuitton Australia, Philip Corne, said the luxury goods market had grown rapidly in Sydney despite the city’s comparatively lethargic economy.

 

Of course Elite Traveler reaches elite travelers worldwide with audited private jet distribution in over 90 countries worldwide, including the land Down Under.

 

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