ET Insider – June 26, 2012

Elite Traveler Insider –

June 26, 2012

Elite Traveler Insider

============================================================ More than ever private jet travelers, or elite travelers as we like to call them, are the most lucrative market for luxury brands and service providers. With readers spending $10,000 per hour to fly privately, the over 600,000 readers Elite Traveler reaches each issue provide you a great way to make sure your message is in front of consumers who have the money to be good customers. With our Asia Edition, Elite Traveler Superyachts, our over 60 Elite Traveler Destination Guides at Elitetraveler.com, our global database of private jet owners and our award-winning custom marketing team, we would welcome the opportunity to be of help to you in making sure you get a bigger share of our reader spending

With a Net Worth of more than $25 trillion, I hope you will agree elite travelers should be a key target for your marketing! =============================================================

In this issue:

1. Wealth-X: Ultra-Wealthy “Defy Being Categorized By Geographical Location”

2. Why the Rich Recovered And The Rest of Us Didn’t

3. The $300,000 Vacation: It’s Not Much If You’re An Asian Elite Traveler

4. Hello California, Here We Come

5. Billionaire Sells Hawaiian Island; Billionaire Buys Hawaiian Island

6. Elite Traveler Sells for Charles Krypell

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1.Wealth-X: Ultra-Wealthy “Defy Being Categorized By Geographical Location”

Singapore-based Ultra-High Net Worth research firm Wealth-X gets it.  In their latest research findings – about the U.K.’s richest inhabitants – they note that most of these folks are British in tax base only.  It “reflects the attraction the United Kingdom holds for the ultra affluent, who are increasingly global in their outlook and lifestyle.”

Mykolas D. Rambus, CEO of Wealth-X, was right to the point: “The growing trend of the ultra wealthy choosing to establish residences in the most cosmopolitan cities around the world has implications for all professionals operating in the financial services and luxury sectors. Professionals need to understand these ultra wealthy clients, who defy being categorized by geographical location, should they wish to create consistent strategies of approach.”

============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY global publication targeting and reaching private jet travelers to have its circulation successfully audited.  View our BPA statement here. ============================================================

2. Why the Rich Recovered And The Rest of Us Didn’t…

Writing for CNBC, Richistan author and former Wall Street Journal columnist Robert Frank notes, the “Federal Reserve tells us that wealth of the middle class declined by more than a third between 2007 and 2010. The wealth of the top 1 percent, however, grew by two percent.”

While Frank notes, “These statistics will no doubt fuel partisan politics by some who argue that the rich have gained at the expense of the rest and that the system is rigged for the rich,” he goes on to point out a reason we have previously cited: “The wealthy have a greater proportion of their wealth in stocks and less of it in homes. Stocks and financial investments have rebounded. Homes haven’t.”

A recent piece in The New York Times suggested in some markets home prices won’t recover to pre-recession levels until 2030!

Frank points out that “in 2009, the top one percent had only 10 percent of their wealth tied up in their homes. They had much more of their wealth – 38 percent – in financial investments, including 9 percent of their wealth in stocks. The middle class and upper-middle class… had more than half of their wealth tied up in their homes. They had less than a third of their wealth in financial investments and only 1.6 percent of their wealth in stocks.

What happened since the crash?  Stocks and many financial investments are now edging closer to their pre-recession peak. Housing prices, however, remain way below their peak-by as much as a third or more in some markets.

And want to talk about the concentration of wealth?  Here’s a Frank gem: “the one percent owns more than 60 percent of the nation’s individually held stocks.”

============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY publication in the world delivering 400,000+ readers with a Household Income of $1 million + ============================================================

3. The $300,000 Vacation: It’s Not Much If You’re An Asian Elite Traveler…

A recent piece in New Asia noted that for those Super Rich Chinese and their private jets, where they go and what they spend, no expenses are spared (yes, we know there are the popular myths that even the rich Chinese don’t stay in luxury hotels).

But let’s start first with their private jets, where Chinese consumers tend to like custom interiors. The article notes, “one such private jet is designed to look like a European palace. Intricate wood carvings adorn the walls, and oil paintings decorate the ceiling. There are cushy leather chairs if one needs to hold a meeting, or one could just adjourn to the bedroom for a nap.”

David Velupillai, marketing director at Airbus Corporate Jets, said: “We can do a round table for six. Because the round table is the center of Asian family life, but we can also convert that table into a square which is better for playing mahjong and other games. We can even do a karaoke bar.”

It costs some US$10 million for a more humble private jet to about US$68 million to buy an Airbus ACJ318. And this does not include the few million US dollars each year needed for maintenance and fuel fees.

Rupert Hoogewerf, founder of the Hurun Report, said: “They just want the best. Like if they buy a car, they are going to buy a Rolls-Royce or Bentley. You got to have one in your collection if you are over a certain status. Rolls-Royce sells a thousand units a year. ”

Another example:  Eurocopter collaborated with Hermes and Mercedes-Benz to develop two designer helicopters, spacious enough to hold golf clubs.

Bruno Boulnois, CEO of Eurocopter China, said: “Our model can accommodate eight VIP passengers in a very luxurious environment. The color is very auspicious in the Chinese mood, red color.”

For those who own a jet but do not know where to go, or want to charter one for an exclusive weekend, Private Jet Journeys will help arrange their getaway.

The trip could include meeting celebrities, or doing as many things as one wants to in the shortest time.

The company is one of several that have chosen to set up base in China, in recent years.

Jane McBride, CEO of Private Jet Journeys, said: “It can be something as simple as flying in New York… taking your family to Boston… visiting Harvard or MIT with your daughter or son, then flying to Miami, boarding a private yacht to cruise to the Bahamas, where you meet with your investment banker in the Caribbean, perhaps you do some investments, shopping there. And you fly out to Las Vegas… to replenish your coffers after your travels.”

A luxury travel package that covers two to three cities would cost about US$300,000, and that would be considered small change, for those who are rich enough to have their own private jet.

============================================================ ONLY ELITE TRAVELER – Elite Traveler (audited by BPA Worldwide) is the only audited publication delivered to global locations for private jet travelers.  ============================================================

4. Hello California,  Here We Come…

Strike Oil (as Jed Clampett and his Beverly Hillbillies of the 1960s TV show did), privatize mines in Siberia or own a plant in China that makes iPads.  Either way, California here we come.

A recent report from Europe claimed, “Some of the same European and Asian wealth that’s been buying up London real estate at crazy-high prices appears to be focusing on Southern California. Sales by foreign buyers in the U.S. reached $82.4 billion in the year to March 31, up from $66.4 billion in 2011, according to a report from the National Association of Realtors – and California was second only to Florida in activity.”

David Parnes, a director at Bond Street Partners, a Los Angeles-based realtor specializing in high-end luxury and investment property, said that Los Angeles is enjoying its biggest influx of foreign capital in years. “Investors are now snapping up foreclosures in greater numbers because comparatively low property prices mean they are able to achieve strong returns,” he said. “Prices in L.A. are showing to 60 to 70 percent discounts against their equivalent in Manhattan.”

Parnes points out many reasons to explain why the world’s super-rich are making a beeline for California. The state is the financial hub of the U.S. West Coast, with Los Angeles already home to the highest number of foreign-born billionaires and Fortune 500 company CEOs outside New York.

Adam Fenner, an executive at California’s Skyline Wilshire Investment Partners, which sources overseas capital for high-quality US real estate operators and funds, said that overseas investors are again viewing the U.S. as “a safer haven.”

============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY publication that delivers UHNW consumers on private jets from more than 100 countries with a single ad. ============================================================

5. Billionaire Sells Hawaiian Island; Billionaire Buys Hawaiian Island…

Full disclosure:  Many moons ago I spent three consecutive New Year’s vacations on the Hawaiian island Lana’i.  It remains more or less unchanged – although its two luxury resorts are now operated by Four Seasons. When I was there they were independent.  It remains one of my favorite places for many reasons, and clearly my taste has been endorsed by yachting and private jetting maestro Larry Ellison.

Ellison, CEO of software giant Oracle and the sixth richest man in the world (Forbes magazine), is closing the deal on the purchase of Lanai, a Hawaiian Island.

In 2004, he contracted the building of 453-foot (138 meter) “superyacht” Rising Sun for an estimated $377 million. The craft is equipped with 82 rooms on five decks, with a combined 86,000 square feet (8,000 square meters) of living space, onyx countertops, onboard cinema and extensive wine cellar. The ship is currently the tenth-longest motor yacht in the world and owned by entertainment industry executive David Geffen.

Ellison is a collector of expensive automobiles and aircraft. He was the winner of the America’s Cup sailboat race, with his multimillion-dollar high-tech multi-hulled craft called the USA-17.

He owns three multimillion-dollar residences in the San Francisco Bay Area, one of which, his Pacific Heights two-story, 10,000 square feet pied-à-terre, has a fountain and a rock garden behind a frosted courtyard wall that with a turn of a key, becomes transparent.

Lanai was sold by billionaire David Murdock and the deal was made public Wednesday by Hawaii Governor Neil Abercrombie.

The real estate involved is 88,000 acres and includes two Four Seasons Resorts, each with its own golf course, a stable, along with residential and commercial properties. The island has 30 miles of paved roads, 400 miles of unpaved roads and no traffic lights.

When Bill and Melinda Gates were married in 1994, every hotel room on the island was booked for the occasion.

The price for the sale of the island of Lanai is not known, but the Maui News estimated it going for $500 to $600 million.

Ellison will, of course, pay in cash, according to the reports Insider has read.

============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY global publication targeting and reaching private jet travelers to have its circulation successfully audited.  View our BPA statement here. ============================================================

6. Elite Traveler Sells for Charles Krypell…

I always say there aren’t any publishers who run around saying, “my audience is that Mass Affluent consumer who’s just trying to survive.”  In other words, every publisher has their pitch, but at the end day there just aren’t very many poor people on private jets.  And of course it is nice when our advertising partners see success from their investment with us.  The following is from New York-based designer Charles Krypell:

Dear Doug,

Charles Krypell is designed to reach the human art.   My jewelry is rare, unique and distinctive, and we believe a great complement for your beautiful magazine.

Elite Traveler is a key media source for us with well over $200,000 in sales we can track directly back to our ads in your magazine over the past year.

The affluent readers you have from your private jets not only appreciate what we do, they have the income to buy my creations.

As you know, we are happy to continue our partnership and have upgraded our advertising for every issue from full pages to spreads!

Sincerely,

Charles Krypell Owner/Designer

============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY publication in the world delivering 400,000+ readers with a Household Income of $1 million + ============================================================

All the best,

Douglas D. Gollan Group President and Editor-in-Chief Elite Traveler, the private jet lifestyle magazine Elite Traveler Superyachts, the superyacht lifestyle magazine Elite Traveler Asia, Asia’s private jet lifestyle magazine Elitetraveler.com, the private jet lifestyle online Elite Traveler Update, our weekly e-Newsletter to private jet owners worldwide