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Elite Traveler – ET Insider – June 5, 2006

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ET Insider – June 5, 2006

Elite Traveler Insider– Following the Private Jet Lifestyle

privatejetlifestyle

Elite Traveler Insider– Following the Private Jet Lifestyle

June 5, 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, 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.

  • Keeping Your Private Jet Dry…$25,000; Not Flying Commercial…Priceless…
  • Private Jet Travel Surges in Dubai, Austria…
  • Split Offers Glimpse into the Private Jet Lifestyle…
  • Price is Not an Object for the Elite Traveler…
  • The One-Percent Core Customer Concept and How to Get More Sales…
  • En Vogue, One Gulfstream is Better than a Small Subdivision…
  • The Good News: Your Marketing Worked; the Bad News…

“All of our people, including Shaquille O’Neal, Bo Derek, Maria Shriver and Reba McIntire love the book. We put them on all of the private jets. Great book!”

-Tammye Johnson – FBO AvCenter, Louisville, KY

1. Keeping Your Private Jet Dry…$25,000; Not Flying Commercial…Priceless…

As the number of Super Rich traveling by private jet grows, and more are turning to private jet travel for their entire family, the need to house private jets is expanding rapidly. In Colorado Springs, JHW Investment Co. broke ground last week on a $1 million expansion of its existing 15-acre development at the Colorado Springs Airport.

“There’s more and more interest due to the complications with airline travel. You have to get to the airport two hours early, be screened, undress for security and maybe be strip-searched,” said Dick Janitell, managing partner for JHW.

Cost to rent a hangar is about $25,000 per year. However, JHW is not alone at Colorado Springs Airport. In a separate project, 24 private “condo” hangars are being built and sold for private planes. Already, 100 hangars are at the airport, with airport officials predicting an additional 50 in the next two years.

“Entire families read the magazine, all the way down to their kids!”

-Victoria Hallak, Million Air Teterboro

2. Private Jet Travel Surges in Dubai, Austria…

The number of private jet movements in and out of Dubai International Airport increased by 57 percent in 2005 (6,216), compared to 2004 (3,940) and movements in the first quarter of 2006 were 24 percent ahead of the first quarter of 2005, according to figures released during the recent Arabian Travel Mart. Of course, the surge in private jet travel and the private jet lifestyle is not limited to Dubai or North America. It is worlwide. Take note, last year Innsbruck, Austria had over 21,000 private jets landing and taking off Travelers with them! . It is why we say, where in the world your top customers and prospects are Elite Traveler is there.

“Our clients enjoy reading the magazine cover to cover. They enjoy the high quality and look forward to the Hotel, Spa and Resort issue which is an extra perk.”

-Jeanette Wuisman – Landmark Aviation, Dallas, TX

3. Split Offers Glimpse Into the Elite Traveler Lifestyle…

I often say the customer who walks into Harry Winston on Fifth Avenue in New York tomorrow may today be in Dubai today and next week Sydney. So, while it is often hard to comprehend the global nature of today’s New Jet Set (see the Newsweek article on our web site in the Press Room section at www.elitetraveler.com) and their elite travels (and spending), sometimes divorce of a long married Super Rich couple provides a glimpse. For example, early details of the split between Greg Norman and his wife Laura reveal principal residences in South Florida and Sydney, with additional residences in the Bahamas and Colorado. There is a twinjet Bell Helicopter and a state-of-the-art Gulfstream 5 long-range private jet the Normans use for travel between homes and on business. The couple announced their divorce from their home in Australia several weeks ago; however, Mrs. Norman was most recently pictured walking along the beach near their home in Florida.

In a separate item showing how hard it is for marketers to stay connected to the Super Rich, Denise Rich, as reported in The New York Post, is getting ready to spend the summer on a yacht in The Med. However, the Super Rich Ms. Rich won’t be yacht-bound. Reported side trips are planned for Moscow, Abu Dhabi and Libya. Elite Traveler is pleased to have BPA-audited distribution not only on mega-yachts in The Med but Russia the Middle East and Africa as well, providing luxury marketers the only media in the world that actually follows their best customers and prospects.

“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

4. Price is Not an Object For The Elite Traveler…

Worried you are pricing your product too high for the Super Rich? Think again. Here are some recent purchases we have spotted elite travelers opening their wallets for: Flying a family pet to Colorado after a child was upset the dog was left back in their Westchester, NY house. Cost – $25,000; Catering for a private jet flight from London to Italy for a birthday weekend celebration with friends. Cost – $9,000 one-way. In fact, several of our friends in the private jet industry who sell either fractional shares of private jets or jet cards providing access to private jets tell us that a significant number of their customers already own their own jets. So why are they buying more? Flying a spouse to meet them and flying in the kids as well as having a back-up available so they never have to mix with us in an airport are among the chief reasons.

What’s the lesson? If luxury companies want to build their business, they need to look higher – not lower. Why not get the person who just bought a $50,000 watch from you to buy two $5,000 watches as gifts? It is a much easier course than trying to get somebody who can’t afford the watch to eventually save up and buy it. In other words, fish where the fish are!

“Our passengers really get excited about the fact that we give out this exclusive magazine for free. Some of our frequent travelers come to the counter just to ask if the latest copy is available.”

-Regine Biland, Lufthansa German Airlines – First Class Senator Lounge

5. The One-Percent Core Customer Concept and How to Get More Sales…

A lot of people like luxury products and aspire to own them – one day. I personally have a long list of things I want but probably never will be able to buy – did I mention the costs for my oldest daughter to study in Florence next year? Yes, sometimes the Mass Affluent “trade up” and make limited luxury purchases. I do like my Hermes ties! However, it is “The One-Percent” at the very top of the pyramid who are the major purchasers. As many of them live a global lifestyle, tracking how much they actually earn is difficult. Many times portions of their wealth and earnings are located in different countries.

That said, according to Emanuel Saez of the University of California Berkley, in 2004 the Top One-Percent of households earned 16.2% of all income in the U.S. – excluding capital gains. Of course, that is a big, big exclusion. Many of the Super Rich earn huge amounts of money from selling stocks, businesses and interests in businesses – all are considered Capital Gains. An example, Peter Morton cleared over $700 million selling his interest in his hotel group, which is a Capital Gain, not regular Income. What this means, is the Top One-Percent actually have earned well over 30% of all income in 2004.

So under the old truism, you have to have money to spend it – at least when it comes to buying the $10,000 Dior handbag, luxury marketers should be intensely focused on “The One-Percent Core Customer.”

Elite Traveler , with Prince & Associates, will be introducing some fascinating research later this month that looks at that Top One-Percent. The report, titled “The New Jet Set’ is based on over 600 interviews with private jet owners and divides these elite travelers into three consumer profiles to segment for marketing practices over 14 different luxury purchasing categories. If you are interested in receiving this research, please email me at douggollan@aol.com.

“Our facility exclusively distributes only Elite Traveler because it’s the best high-end publication. We have lots of clients who request it.”

-Jim Allbaugh – CL Aviation Services, Parker, CO

6. En Vogue, One Gulfstream is Better than a Small Subdivision…

In Rowan County, North Carolina, the government officials are smart and targeted. With some 200 companies in the area that use private jets and a number of NASCAR teams based nearby, they are looking at expanding the Rowan County Airport to accommodate the private jets that these folks use. The officials say other airports in the area are overflowing with private jets and more facilities are needed. What’s more, the report says the tax value of having a $40 million Gulfstream V home-based at the airport is “more than a small subdivision.”

The story reminded me of one I heard several years ago after the fashion magazine Vogue had done a “Vogue Shops Rodeo Drive” event. After the havoc, it turned out sales for many of the stores on Rodeo Drive actually fell as lookers clogged the shoppers’ paradise, scaring away the big spenders. In other words, it isn’t the number of people coming into the store, it’s how much they’re buying. The average Household Income for readers of Elite Traveler is $5.3 million, which is some $5.2 million higher than the average reader of Vogue!

“I’ve had to increase my copies because the magazine goes so fast. I try to keep one for myself when I can. The pictures inside are so breath-taking.”

-Donna Reed – YYJ-FBO Services, Canada

7. The Good News: Your Marketing Worked; The Bad News…

If a recent survey by MasterCard of over 1,000 adults is true, both Australia and New Zealand have done a marvelous job marketing their destinations. Fully 65% of the Americans surveyed say “they dream of going” to the destinations. However, for Australia and New Zealand, that’s where the nightmare begins. Only 1 percent say they actually plan to visit either country, with nearly 70% of those surveyed saying they actually plan to go to Florida. Long-haul destinations have always wanted American travelers – however, the problem is Mass Affluent Americans are constrained by limited vacation time and many other financial pulls at their pocket books.

As governments primarily promote tourism as a revenue or foreign exchange earner, a more sensible approach would be to be very, very targeted. For example, private jet travelers bring on an average of over $200,000 in economic benefits to the destinations they visit. What’s more, private jet travelers are opinion leaders and influencers who can actually spur the Mass Affluent to save up and eventually visit those dream destinations. So hats off to Australia and New Zealand for fabulous marketing campaigns – next time, we suggest they do a better job of targeting their campaigns!

“Of all the magazines we’ve seen, none is as good as this one. Keep up the good work!”

-James McDuff – Mercury Air Center, Jones Island, SC

Please visit our web site at www.elitetraveler.com for more information on elite travelers and how you can get them to spend more with you!

Have a great week!

Douglas D. Gollan

 

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