ET Insider – February 9, 2010

Elite Traveler Insider –

February 9, 2010

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. Shame Over: Big Yachts Are Back in Vogue

2. Elitetraveler.com 2009 Summary and Highlights

3. The Battle for Super Bowl 2011 is Underway – For Private Jets

4. Booz & Company: The Super Rich Consumer Never Went Away

Over 90 percent of today’s Super Rich are Self Made and over 80 percent of the Super Rich have made their fortune in the past 10 years. Now is the best time to make sure they know your brand. 86% believe Elite Traveler is a good showcase for luxury products.

1. Shame Over: Big Yachts Are Back In Vogue

I have to a large degree been a skeptic that those with large sums of money ever made a dramatic pullback on high-ticket stealth purchases — in other words, the type of luxuries they could consume without the world knowing. When I would hear stories about supposedly super rich not buying, my belief was that those who had lost a lot were using “not in good taste” as somewhat of a cover for their own financial turmoil. After all, if you were or are still on a private jet, the belt is not that tight, stop, period. In numerous conversations with luxury executives I would hear stories about expensive watches, necklaces, custom made luggage being sold with price tags in the high six figures. These were the types of acquisitions one could appreciate, yet not have to show off. Yet, the huge drop in the purchase of marks such as Rolls Royce, Bentley and Maybach definitely proved that even those with deep pockets were being image conscious. But now it seems to be over:

According to Bloomberg, European yacht makers Princess Yachts and Beneteau SA said sales are picking up as wealthy buyers resume purchases of their most-expensive models.

“Boats over 100 feet are selling very strongly as the very wealthy feel the crisis less and tend to buy bigger and more modern boats,” Simon Clare, head of marketing for Princess Yachts, said in an interview at the Dusseldorf boat fair. He said he’s “cautiously optimistic” for sales this year. The show ended Jan. 31.

Princess Yachts, controlled by LVMH Moet Hennessy Louis Vuitton Chairman Bernard Arnault, has an order to build its largest boat ever, a 12 million-pound ($19.5 million), 130-foot vessel for a European buyer, Clare said. The company acquired a 15-acre waterfront site in its hometown of Plymouth, England, last year for construction of larger luxury yachts. The company has also added 80 people to its workforce of 1,800 to cope with rising demand.

Beneteau, the world’s largest maker of sailboats, and HanseYachts AG, Germany’s largest publicly listed yacht maker, are predicting higher revenue. European yacht sales plunged about 50 percent in 2009, according to Nick Hopkinson, publisher of International Boat Industry magazine. A third of the members of industry group the British Marine Federation expect an increase in future orders, compared with less than 15 percent who said so in the first half of last year.

The Bloomberg report underscored, “It is encouraging to see that businesses are starting to feel more confident about the future,” said Rob Stevens, the chief executive officer of the British Marine Federation, a trade association for leisure boating.

Beneteau, based in Saint-Gilles-Croix-de-Vie, France, expects revenue at its yacht division to rise 15 percent in the year ending August and 20 percent the next year, Chief Executive Officer Bruno Cathelinais said in an interview. Operating profit will almost triple to 61 million euros ($85 million) by 2011, he said. The company, which posted its first net loss since 1994 last year, aims to double sales of large motor yachts to 20 million euros in 2011, he said.

Sales at HanseYachts will rise in the fiscal first half ending Jan. 31, and the business “is now slowly improving every month,” Chief Executive Officer Michael Schmidt said in an interview. The Greifswald, Germany-based company reported a 57 percent sales drop in the year through July as sailing enthusiasts cut back spending in the recession.

While demand is rising for the biggest yachts, sales of 40- foot, midrange vessels remain sluggish, the executives said, with the Mass Affluent still reeling from hangover having spent most of the last decade gorging on a feast of credit card debt, borrowing against household equity and too many leased BMWs in the driveway.

Out of the Box: Looking for new and innovative ways to efficiently and cost-effectively target potential customers? Combine the only worldwide audited magazine aboard private jets, Elite Traveler, with an innovative destination specific campaign in private jet terminals, including events, and get to these consumers as they narrow their consideration set through Elitetraveler.com. You can find all the tools you need at www.elitetraveler.com/business.

2. Elitetraveler.com 2009 Summary and Highlights

Most media promote their web sites as a way to reach a different audience than their print product. After all, if you read a paper copy of The Wall Street Journal do you really need to go online to read the same thing again? This approach is underscored by Conde Nast’s new push to bring out digital versions of its magazines.

So now here is something interesting: When you advertise on Elitetraveler.com 80 percent of the audience are readers of Elite Traveler, so in other words you are reaching the same high flying, wealthy private jetsetters you get with our print editions. But here’s the rub: Our content at Elitetraveler.com is organized to fill a different need than the magazine, which provides trends, inspiration, fun, excitement and conversation, otherwise known as buzz and sometimes even substantial sales for the companies we feature.

At Elitetraveler.com, the heart of the content is Elite Recommends, a library of nearly 100 PDF guides users can download and print out in four-color high quality. Some examples are Top Suites of Paris, Top Suites of Hong Kong and Top Suites of New York. All were previously featured in the print version of Elite Traveler, but we also know that when a reader is looking at one of these stories they may or may not be in the trip planning process. So now, at their fingertips 24/7/365 wherever in the world their private jet has taken them, they can access this content.

It’s similar with our Timepieces, Jewelry, Auto, Men’s Fashion and various other guides. Elite Traveler readers know when they want comprehensive coverage of the elite players in various areas of interest, Elitetraveler.com provides them in easy to use download guides. Of course, there’s our continuously updated News Section keeping them apprised of items of interest in a timely manner and one of the most popular areas, Leaders in Luxury, where we interview successful entrepreneurs and top managers who share insights, tips, strategies and passions with our readers.

So is it working? Below is our report card. I hope you will agree, while we are not going to scare Google, if you want to target private jet travelers online we have built a significant audience for you to tap into:

2009 Total Unique Visitors: 227,811, up 175% over 2008

December 2009 Unique Visitors: 26,591, up 152% over December 2008

2009 Total Page Views: 1,386,942, up 71% over 2008

2009 Web Guide Downloads: 73,120, up 379% over 2008

2009 Web Guides on Site: 89, up 62% over 2008

55 Special Advertising Sections downloaded 13,391 times in 2009

Web Guide Highlights:

– Jewelry Review Guide downloaded 12,107 times – Advertiser Sponsored Jewelry Special Sections downloaded 2,195 times – Official Watch Guide downloaded 10,372 times – Advertiser Sponsored Watch Special Sections downloaded 4,354 times – Top 101 Suites 2009 Guide (July-Dec. 2009) downloaded 2,775 times – Top 101 Suites 2008 Guide (Jan-June 2009) downloaded 2,008 times – Advertiser Sponsored Hotel Special Sections downloaded 4,019 times – 80% of Elitetraveler.com visitors are Elite Traveler Readers – 70% of visitors who download travel-related web guides plan to visit the destination in the next 12 months

While the world’s economy today is unsteady, one thing is for sure: The wealthy consumers flying aboard private jets are your best bet, and only Elite Traveler delivers these elite travelers to our advertisers through our BPA audited circulation aboard private jets in over 100 countries, including Russia, the UAE, Kuwait, Qatar, Bahrain, Oman, India, Singapore, Korea and China. All with one ad buy!

3. The Battle for Super Bowl 2011 Is Underway – For Private Jets

Yes, travel by private jet is a favorite whipping boy for politicians and others. However, when it comes to the impact private jets have on the local economies of the places their owners go, there is usually a mad scramble to throw out the welcome mat.

So while National Football League teams are currently on vacation, The Fort Worth Star Telegram reports that Dallas Ft. Worth International Airport is trying to up the ante for the 500-1,000 private jets that will descend on the Metroplex for the 2011 Super Bowl to be hosted at local Cowboys’ Stadium. Private jet companies reported a 25 to 50 percent increase in Super Bowl traffic for this year over last.

In fact, while Love Field, Alliance and Meacham Field are generally the preferred airports for private jets, DFW plans to make a big push.

According to the newspaper, at a committee meeting Tuesday, airport staff outlined a $3 million project that would boost its general-aviation business. D/FW would improve access and renovate the mothballed American Eagle terminal on the northeast side of the airport so corporate jets could use it.

“We’re still working on some of the business model aspects of it, but we certainly think it will pay for itself,” airport CEO Jeff Fegan said.

The project, developed primarily because of Cowboys Stadium in Arlington, would create an access road to the terminal that will provide an exterior entrance for the 28,000-square-foot building. Although the terminal’s interior is still in good shape despite being out of use since 2002, some renovations are required along with new furniture.

The facility would accommodate over 70 corporate jets, depending on their size, and would be competitive with other general-aviation airports in the area. The airport’s current general-aviation facility, on its south side, can accommodate only 30 aircraft. D/FW had about 2,700 arrivals in fiscal 2009, generating $1.8 million in revenue.

Airport staff expects to solicit bids and have final designs ready this spring, with a November target to complete the initial phase. Or put another way, private jets create jobs!

Only Elite Traveler can guarantee you that your ad dollars are reaching wealthy consumers who are still spending. What do we mean? Our new June 2009 BPA Circulation statement breaks out where our magazine goes – 71 percent of our copies to private jets and private jet terminals, 14 percent to First Class lounges, 3 percent go to Sport Locker Room/Training Facilities and Yachts, etc. This means you know that your dollars are getting to consumers who are still traveling in style, and still spending money – not sitting home worried about the economy. It is a guarantee that your critical advertising dollars are reaching a lucrative target. It is a guarantee no other publisher can provide.

4. Booz & Company: The Super Rich Consumer Never Went Away

Core luxury customers want some love and attention, according to Booz & Company, a leading strategic consulting firm.

Saying that Ultra High Net Worth clients who remained wealthy never stopped spending, they just spent more quietly, Vice President Karla Martin outlined key trends for a packed Luxury Marketing Council breakfast at the 21 Club in New York.

Among the “new” buying habits of ultra high end consumers is more private shopping, having jewelers comes to one’s home and browsing online first.

While luxury business has gone from bad to okay, luxury companies need to recalibrate for a new, narrower market. From “more is more,” high-end consumers now want some “editing” done beforehand.

A benefit for wealthy shoppers is that as the Mass Affluent have walked away from luxury, the still wealthy core customers are now finding shops less crowded. Smart merchants have responded by creating more open space and more space to show the product.

Martin said that the “Sex and the City” effect had in fact caused credit card charging consumers not to just trade up to luxury, but to “leapfrog.” “As soon as the recession came, these women exited in some cases because they were broke. And even with the slight recovery, “aspirational shoppers didn’t come back.”

One of the nice traits about core luxury customers is they are brand loyal and like to feel that the brand knows them and they are not just a bottomless wallet. The Holiday 2008 discount wars made these core customers who still had money angry seeing “people buying their $2,000 jacket for $200.”

Martin cited one major luxury jeweler who found that as they increased store traffic due to the success of their low price silver line, core shoppers who averaged $10,000 to $30,000 per year said they felt shopping there was no longer a luxury environment. After moving lower priced product to separate areas, satisfaction with higher spending customers increased.

One major change: Core customers are focused on detail and authenticity; the signaling effect is dead. In other words, as the Prince January 2009 research pointed out, high net worth consumers are still consuming, but their buying motivation is to satisfy themselves as opposed to showing off their purchases.

Out of the Box: Looking for new and innovative ways to efficiently and cost-effectively target potential customers? Combine the only worldwide audited magazine aboard private jets, Elite Traveler, with an innovative destination specific campaign in private jet terminals, including events, and get to these consumers as they narrow their consideration set through Elitetraveler.com. You can find all the tools you need at www.elitetraveler.com/business.