ET Insider – August 23, 2011

Elite Traveler Insider –

August 23, 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. Excuse Me, Each “Corporate Jet” Generates $1 Million and 5 Direct Jobs

2. What’s Rich? WSJ’s Robert Frank Takes A Look

3. The $46,000 per Month Four-Year Old

4. TEFAF Sees Record Private Jets And Other Records

5. Pessimism Grows Among Mass Affluent Consumers

6. Why Elite Traveler Isn’t Your Ordinary Magazine Buy

1. Excuse Me, Each “Corporate Jet” Generates $1 Million and 5 Direct Jobs

Recently FlexJet CEO Fred Reid visited our offices, and when the subject of ‘luxury shame’ came up, Reid became very vocal.  “Our owners know how many people they employ with their companies, how many people they’ve employed and jobs they have created in their lifetimes, how much in taxes they’ve paid and how much they’ve given to charity.”  It is a sentiment I fully endorse despite the rhetoric from Washington, DC.  By the way, it took our President separate private jet flights two hours apart to get to Martha’s Vineyard for his 10-day vacation  (The First Lady and family flew up four hours earlier than the President). Interestingly, like a lot of luxury industries, a lot of well-paying jobs are created.  And I am not just thinking about all of the folks employed at retail by the luxury industry. Specifically, a recent Aviation Daily piece cited “a New York Statewide Airport Economic Impacts Study that shows direct economic and job benefits from private jets at New York’s 67 general aviation airports and five heliports employed 9,100 people and generated $1.12 billion in 2009. Each corporate jet based in the state generates $1 million in spending and five direct jobs.” Reid made the valid point that making private jets is one of the last bastions of manufacturing where the United States is a leader, making it even a stranger strategy to politically bash the industry.

Reid reported that private jet flying for his company is up six percent this year, and there is no reticence by his customers about flying privately.  And in my opinion, there shouldn’t be.  Private jet fliers are the heavy users of luxury hotels and resorts, the biggest purchasers of designer fashion and high-end watches and jewelry.  As we celebrate 10 years of Elite Traveler next month, we will continue to proudly promote the private jet lifestyle to our over 600,000 readers worldwide, showcasing great products and experiences to them.  After all, spending equals jobs.   Even a C-student like yours truly understands that.

============================================================ 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. What’s Rich? WSJ’s Robert Frank Takes A Look

The idea that making $250,000 per year makes one rich may be a political topic, but it should also be front and center with media buyers and marketers of luxury goods.  A while back, we covered a Washington Post study that showed the average American family making a quarter of a million dollars a year is under water.  In other words, the $250,000 Household Income consumer is not got to be a big customer for luxury brands; if lucky, they’ll be ‘trading up’ for a once-a-year or every-several-year splurge for a $3,000 something or other.

Robert Frank then took a look to see how much money you have to make in order to be a private jet owner or user:  “For those, like the president, who may not be well-versed in Jetonomics, here are some of the basics. The numbers come courtesy of Jay Duckson at Central Business jets:

COST OF BUYING A JET:  New Citation CJ (entry level jet)-$5 million. Annual operating costs (fuel, hangar space, pilots) about $500,000. Cheapest Used Jet-$100,000 to $500,000.  Annual operating costs (hangar, pilots, mechanics, fuel) about $1 million a year.

COSTS OF CHARTERING A JET:   Typical charter – $3,000 an hour.  It is possible, of course, that someone earning $250,000 a year might spend 5% to 10% of their annual income on a single flight by chartering, in which case we could call them “corporate-jet fliers.”

But it is unlikely. Even more unlikely is someone earning $250,000 a year paying $500,000 to $1 million a year to operate a jet – even if they received it free.

According to Mr. Duckson and others, most of those who own their own jets have net worths of $100 million or more and earn more than $10 million a year-minimum.

For media planners, my message is:  You need to aim HIGHER – Elite Traveler delivers 407,000 readers every issue that make $1 million + HHI per year – with many making lots more.

If you want to get your message in front of people who can buy lots of luxury products and services, 2012 is a good time to look higher – let me just recommend you include Elite Traveler in your plan!

============================================================ 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 $46,000 per Month Four-Year Old

From Reuters: “Supermodel Linda Evangelista is asking French billionaire Francois Henri-Pinault for $46,000 a month in child support. He’s the father of Ms. Evangelista’s four-year-old son, Augustin James. And Ms. Evangelista argues that $46,000 is the minimum required to provide for young Augustin in the manner to which he has grown accustomed.

Readers outside New York are probably thinking: “What’s this kid eating?!” Readers in New York are thinking: “She should ask for more.”

To find out how a four-year-old could possibly burn through $46,000 a month in Manhattan, I called Natasha Pearl, president of Aston-Pearl, the New York-based lifestyle-management firm for wealthy families. Here’s the breakdown:

CHILDCARE.  Forget the nanny. Kids like Augustin need a round-the-clock child-care team, what the wealthy call “full, 24/7 coverage.” Ms. Pearl says that requires three nannies, with two rotating on full schedule and another as a backup. “And that third nanny preferably has some specialty skill, like teaching the kid Mandarin,” Ms. Pearl said. “And if he’s a boy, the third staffer might be a manny to run him around the park and throw him baseballs.” Total cost: About $23,000 a month or more – half the total.

SCHOOL.  Augustin is still in preschool, which means that rather than paying the $36,000 to $40,000 a year for private school, Ms. Evangelista only has to pay about $20,000 to $30,000 for a top preschool. That means his school bill – at least for now – is a mere $2,500 a month. CLOTHING.  You can’t be the son of Linda Evangelista and the world’s luxury king and wear Osh-Kosh. To sheath Augustin in Chloe, Berlingot and Jacadi (and of course, the Gucci kids’ line, owned by Pinault) you’re looking at $3,000 a month minimum. EXTRACURRICULARS.  Fencing, chess, French lessons, soccer and all the other add-ons that are required for any successful Manhattan four-year-old will easily run another $2,000 to $5,000 a month. DRIVERS.  “He probably needs his own driver since they can’t split one,” Ms. Pearl said. “If he needs to be at school at 8 a.m. and she needs to be out ’til 2 a.m., they have to have two.” So add another $6,000 to $8,000 a month.

So we’re already at more than $41,000 and we haven’t even gotten to his daily sushi intake, the expense account at F.A.O. Schwarz and the kiddie birthday parties at Top of the Rock. “At first glance, $46,000 seems like an extraordinary amount and it is,” Ms. Pearl said. “But for a fortunate child in New York, it is actually absolutely conceivable that his expenses could approach $50,000 a month.”

============================================================ 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. TEFAF Sees Record Private Jets And Other Records

From The New York Observer:

“Even at a time of fierce competition among international art fairs, the European Fine Art Fair-or TEFAF, as it is commonly called-is generally considered the most prestigious of them all. For a whole week in March each year, more than 200 of the bluest blue-chip art and antiques dealers set up shop in Maastricht, the Netherlands, and offer everything from Old Master paintings to prized snuffboxes to newest contemporary art. Collectors swoon.

“Announcing that next year’s edition of the fair will run from March 16 to 25, TEFAF released what is unquestionably one of The Observer’s favorite press releases of the year, detailing some of the hard work and extravagance that went into hosting the 2011 fair, which attracted New York galleries like Sperone Westwater, Van de Weghe Fine Art, Jack Kilgore & Co, Inc. and Haunch of Venison.

“Below, a handy guide to this year’s fair:

• 333,681: total square footage of the fair
• 200: workers building the fair
• 25: days it took to build the fair
• 154: private aircraft that landed at the Maastricht-Aachen airport during TEFAF
• 144,000: flowers, including:
  • 22,500: carnations
  • 18,000: tulips
  • 7,500: anemones and ranunculus
  • 73,574: visitors
  • 55: countries from which the visitors hail
  • 2,184: man hours spent vetting exhibitors’ wares
  • 100,000: glasses used to serve drinks at the nine-hour preview
  • 1,800: bottles of champagne served during the preview
  • 3,500: bottles of wine served during the preview
  • 150,000: canapés served during the preview”

============================================================ 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. ============================================================

5. Pessimism Grows Among Mass Affluent Consumers

They’re not poor, but they are not readers of Elite Traveler.  They are Mass Affluent consumers who have tasted a bit of the good life but now realize they won’t be joining the club full tilt. A study by TNS, the world’s largest custom research firm, reveals that 87% of Americans with $500,000 or more in investable assets agree that the size of the US government’s deficit is a major concern for them.  Over 1,600 consumers were surveyed.

Across the board there is concern and uncertainty around the U.S. economy and how it will affect the financial well-being of Americans.

– 43% feel the current state of the economy will jeopardize their retirement plans – 40% plan to reduce the amount of money they spend compared to last year

Anxiety about the financial health of the U.S. government is also evident, with: – 56% agreeing that they are concerned that the US government may default on its debt obligations – 60% stating they do not think the US government should increase the federal debt ceiling

TNS also released its latest Investor Confidence Index, which declined in June to 102, its lowest level in a year.  This 11 point drop is being driven by growing pessimism about the stock market and the direction of the economy.

Again, if you are selling luxury products and services, perhaps it is time to put more emphasis on the top end of the market.  Or as I say, ‘if you are on a private jet in these times, life is still good.”

============================================================ 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! ============================================================

6. Why Elite Traveler Isn’t Your Ordinary Magazine Buy

First of all, being on private jets and superyachts worldwide is something no other publisher offers, and thus your access to the world’s richest consumers as they relax and plan their next buying spree with family and friends.

However, a recent story on how the world’s moguls and royalty flock to places like the French Riviera reminded me how the fact that Elite Traveler is on their jets and Elite Traveler Superyachts is aboard their mega yachts really is out of the box and an amazing marketing platform.

According to Main Street, “Like a jet set version of the hajj, July is the beginning of a Saint-Tropez pilgrimage uniting aristocrats and luminaries along the French Riviera. Every year, the French seaside city becomes the epicenter of celebrities and a CEO elite that hole up for multiweek stays at area hotels or private villas or simply dock at the city’s glittery port. “The European debt crisis has done little to dissipate the high-season fervor of rich and super-rich that populate Pampelonne Beach for afternoon champagne showers and $5,000 jetpack rides over the sea.”

Elite Traveler’s unique BPA-audited circulation follows the Ultra Wealthy as we get copies of Elite Traveler to the private jet set where they are aboard their jets in these ultra high end vacation spots, whereas other magazines sit in stacks of unread mail or are disposed at empty homes and offices thousands of miles away.

So if you always want to make sure your brand is keeping company with our elite traveler community of top luxury consumers, let us help!

 

All the best,

Douglas D. Gollan Group President and Editor-in-Chief