ET Insider – March 11, 2008

Elite Traveler Insider –

March 11, 2008

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:

CONTENTS:

1. At Davos, Private Jets and Talk of Climate Change

2. More Bad Economic News, “Last Gas” Before Recession Deepens

3. Private Jet Travel to Double by 2013 in the Middle East

4. Tata Groups Launches Fractional Jet Company for India and Asia

5. Private Wealth, A New Magazine Makes its Mark

Advertise in private jet terminals for as little as $1,000 per month. Ask us about Luxus Networks! Email us at sales@luxusdn.com

1. At Davos, Private Jets and Talk of Climate Change

As many of you who read this newsletter regularly know, I am a big fan of Robert Frank’s book Richistan for the simple reason that it goes beyond research numbers and actually gives a glimpse of how the Super Rich live.

There is one scene where a billionaire is speaking about how he turned in his fleet of gas-guzzling SUVs for hybrids because they were more environmentally friendly. The same billionaire has a private 19-hole golf course and a staff of 105 at his residence there.

I am sure if he were asked, “Are you making significant changes to your lifestyle because of concerns about green house gases and the environment?”, he would say “Yes.” Of course, there would still be the golf course, several jets, and a couple dozen more cars, including some Rolls and Bentleys.

I was reminded of this story when I read a recap of the recent Davos confab which this year focused on “Climate Change.” With 2,500 world leaders attending, ZurichAirport saw a 900 jet increase in private jet flights during the conference and an increase of 20 helicopter flights per day shuttling delegates to the conference venue.

The conference organizers are of course sensitive to the carbon footprint they leave. According to the report, “The 38-year-old Forum is trying to shrink its carbon footprint this time around by offering free transport from the Zurich airport in one of 94 Audi A8s – including 12 equipped with heavy armor – that run on low-emission biodiesel fuel.”

I like to always add to the famous line, “The Rich are Different than you and me.” The main difference is that they spend a lot more money. I can tell you that over the next 24 months as aspirational consumers cut back, it would make a lot of sense for luxury marketers to come up with an action plan on how they can get deeper into the very deep pockets of these elite travelers!

YOUR BEST CUSTOMERS ARE HERE: Elite Traveler delivers more readers (318,000) with a $1 million + Household Income than Departures (34,000), Robb Report (30,000), Town and Country (47,000), Vanity Fair (44,000) and The Wall Street Journal (128,000) combined. Source: Prince & Associates

 

2. More Bad Economic News, “Last Gas” Before Recession Deepens

The Dow has fallen from over 14,000 in October and, with another 150- point drop Monday, closed at 11,740.

The Wall Street Journal over the past three days had major headlines such as “Weak Dollar fuels More Stress,” “Housing, Bank Troubles Deepen,” and “Jobs Data Suggest U.S. is in Recession.” The sub-lines weren’t any better, with notes such as “Largest Payroll Fall in Five Years.”

What’s more, it sounds like the news ahead is even worse: “March May Be Quite Cruel,” one story started, noting that in year-end audits, banks may find that many of their corporate borrowers are in bad financial shape.

You might remember, courtesy of The Journal we shared with you last fall, that corporate debt would be the next shoe to drop!

So now I’d like to sell you some Insurance. Burt Tansky of Neiman Marcus noted that despite a 7.4% plunge in same store sales, their core luxury customers will continue to shop while aspirational “trading up” consumers had cut back. The term being used by Mass Affluent research specialist Pam Danziger is “Trading Down,” a play on the book of several years ago called “Trading Up” that showcased Mass Affluent customers charging up their credit cards to gain a piece of luxury they really shouldn’t have been buying. Credit goes to Conde Nast’s portfolio of Mass Affluent titles and other publications such as Town & Country, Departures, Robb Report and Travel + Leisure that do a good job of servicing that $100,000 to $200,000 Household Income crowd.

O.K. Back to insurance. Hopefully your business is going strong, but who knows what the next monthly sales report will show, or perhaps you are already seeing cracks in your Mass Affluent customer base.

The Super Rich are still spending, and in fact, the latest Prince Research shows over 80 percent of consumers with a Net Worth of $30 million + actually plan to increase spending in 2008.

The question is, of course, why?

The answer is three-pronged. First, the Super Rich are being asked to give more by charities who are finding that their Mass Affluent base of givers has dried up, and the Super Rich have responded by giving more. “The feeling is ‘I am doing my part, doing more, thus it is O.K. to reward myself,” said Prince & Associates’ Russ Prince.

Next, over 90% of the Super Rich are self-made, coming from Middle and Upper Middle Class backgrounds. Many of them have made their fortunes in the past five to ten years, and they don’t have much confidence in the government’s ability to fix the economy. In fact, their outlook on the economy is quite negative for the next several years. “Their attitude is: Party like there is no tomorrow,” Prince says, as they feel fortunate to be where they are today and having come from the Middle Class, are unsure what calamitous events could bring them back to earth five years down the road.

Lastly, and most importantly, “These people can afford it. Buying a $50,000 watch has no meaningful impact on their finances; therefore, it is not something they would even consider cutting back on,” Prince said.

Oh yes, and on the subject of Insurance:

The Super Rich market flying by private jet is your insurance over the next 18 to 36 months. Make sure that your brand is getting its fair share of business from these folks’ deep pockets. Top of mind awareness is the key. These consumers buy on a ++++ basis. For them, it is not a choice. The may have just bought a $3 million house in Aspen over the Holidays, but they will still buy the $900,000 condo on South Beach because they want a place to crash after they had a fun weekend partying at The Ritz-Carlton, Setai or another hotel down there. They may never end up even spending a night in either, although they may have commissioned a refurbishment for hundreds of thousands of dollars.

After the stock market crash in 1987, developing a strategy to put your brand front and center with the Super Rich would have been hard, if not impossible. But with private jets being the chariot of today’s still wealthy, still spending Ultra High Net Worth Individuals, one call does it all.

Elite Traveler puts your advertising in front of the richest consumers in the world wherever in the world they come from and wherever in the world they happen to be via our BPA audited distribution in over 100 countries worldwide. Each issue of Elite Traveler is read by over 300,000 individuals who have a Household Income of at least $1 million. Our readers have an Average Household Income of $5.3 million.

Now with Luxus Networks you can complement this global reach with local impact for as little as $1,000 per month. Luxus Digital is our proprietary network of large, flat-screen televisions in the lounges of nearly 60 private jet terminals in key markets. Each television broadcasts to viewers in the lounge a 60-minute loop of luxury programming which includes top travel highlights and sponsored luxury content (your company’s ad here) footed by a news ticker.

Best of all, a call to us tomorrow could have your marketing message up and running on Luxus by April if not sooner, and you can still advertise in the May/June issue of Elite Traveler.

We also offer you unique events to meet one-on-one with our elite readers, and provide you access to our list of private jet owners worldwide that you can use for both direct mail and email.

Lastly, we have the ability to place your collateral within private jet terminal lounges, as well as to arrange product placement from pourings of spirits to auto displays, shuttles, and even fragrance samples.

I had the opportunity and honor to speak last Friday to the Women’s Jewelry Association’s Annual Conference in New York. My advice to those in the audience: If you have any responsibility for sales and marketing, call your colleagues together tomorrow and create a 24-month Action Plan on how your brand is going to make sure every Ultra High Net Worth Individual has your company in its consideration set the next time they hop off their jet to go shopping!

Or if you remember the signs on the highway, “Last Gas for Next 200 miles,” I can’t tell you how long or how bad this recession will be, but I can tell you we have a gas station open for you 24/7, so come on in and fill up!

Advertise in private jet terminals for as little as $1,000 per month. Ask us about Luxus Networks! Email us at sales@luxusdn.com

3. Private Jet Travel to Double by 2013 in the Middle East

The private jet charter business in the Middle East is worth $500 million a year – and the figure is expected to soar to $1 billion, doubling in the next five years, according to recent reports.

The sector has witnessed an annual growth of 40 percent since 2003, said Ammar Balkar, President and CEO of the Middle East Business Aviation Association (Mebaa) during a recent trade show in Dubai.

“The total number of private jets in the region is 500,” he told Emirates Business on Sunday at the Very Light Jet conference in Dubai. “But the industry is developing so fast that we expect the number to increase to more than 1,000 in the next five years.”

Mebaa statistics show that between 1975 and 1999 there was just one private jet operator in the UAE – but today there are 22.

Dubai handled only six private jet flights in 1998, but the total has now reached 7,000 a year, said Jamal Zaal Bin Krishan, General Manager of General Aviation at Dubai Airports in the interview.

“The rate of increase in the overall use of private jets is 30 percent,” he added. “And keeping the growth in mind, the new Al Maktoum International Airport at Jebel Ali will have a large hangar space to accommodate the growing number of jets that are operating from here.”

Balkar said: “The demand is such that in the UAE alone there are 26 new companies in the pipeline that want to start operating private jets. And in Saudi Arabia there are currently 38 applications from new private jet operators.”

“Security and privacy are also reasons for the increased use of private jets,” he said.

“These jets were once used only by royalty and heads of state but now there is a trend towards businessmen, executives and high-net-worth individuals using them because they are quicker and far more efficient.”

Whereas most magazines only offer a single country or maybe region when you buy an ad with them, Elite Traveler delivers over 100 countries, ensuring that wherever in the world your next best customer may be or come from, your ad will be with them. In the Middle East, our BPA audited circulation reaches private jets in Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates and even Iran!

YOUR BEST CUSTOMERS ARE HERE: Elite Traveler delivers more readers (318,000) with a $1 million + Household Income than Departures (34,000), Robb Report (30,000), Town and Country (47,000), Vanity Fair (44,000) and The Wall Street Journal (128,000) combined. Source: Prince & Associates for ET, MMR for others

 

4. Tata Groups Launches Fractional Jet Company for India and Asia

You may know the Tata Group for its luxurious Taj Palace Hotels & Resorts which have expanded outside its home base of India to San Francisco’s Campton Place, the Pierre in New York and the former Ritz-Carlton in Boston. You may have also read that Tata, which has a huge domestic auto business, is expected to acquire Jaguar and Rover from Ford. However, you might not know that for several years, Taj has operated several jets within India to shuttle guests between their high-end resorts (of course, Elite Traveler is aboard!).

Now, according to news reports, Tata Group is making a 36 to 37 percent investment in a newly-floated company, BJETS, in partnership with Singapore-based Briley Group.

Slated to start operations in May 2008, Mumbai-based BJETS will specialize in fractional ownership deals for business jets – meaning each of its jets will be part-owned by individuals who are also entitled to fixed flying time — and aircraft management.

Briley, with interests in aviation and hospitality around the globe, will be the majority owner in the company.

As part of its ambitious drive to be Asia’s largest business jet operator, the newly-floated company has also signed the single biggest order in Asia for a fleet of 50 new jets worth over $600 million.

Aircraft deliveries will take place over five years beginning in the first quarter of 2008, comprising 20 Cessna Citation CJ2+ jets and 20 Hawker 850XP and 900XP jets with options for 10 more, according to reports from India.

“Seventy percent of the fleet will be stationed in India, the rest in Southeast Asia and our aircraft will be able to fly to at least 120 airports in India,” said Mark Pierre, CEO of BJETS.

“The market in India is under-served with only 100 jets” he added.

Pierre expects the company to record a turnover of around $600 million in its fifth year of operation. The company plans to recruit and train over 550 new people worldwide in the next five years, including more than 250 pilots.

The company will offer customers three options. One is fractional ownership in the fleet that assures flying time 365 days a year. The second is a pre-paid card of 25 hours of flying without ownership. Third, the company can manage aircraft for others.

“BJETS will set a new standard in the way we fly and do business in Asia,” said R K Krishna Kumar, vice-chairman of the Tata Group.

Elite Traveler will be there: With our circulation in Asia nearly doubling, we offer you access to private jet travelers flying from China, Hong Kong SAR, India, Indonesia, Japan, South Korea, Macau, Malaysia, Myanmar, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan ROC, Thailand and Vietnam.

Advertise in private jet terminals for as little as $1,000 per month. Ask us about Luxus Networks! Email us at sales@luxusdn.com

5. Private Wealth, A New Magazine Makes its Mark

There is no debating that Prince & Associates is the expert on the Super Rich. With over 40 books under his belt, Russ Prince was recently acknowledged as such by Robert Frank in his wealth column in The Wall Street Journal.

He and his partner Hannah Shaw Grove, a former top marketing executive with Merrill Lynch’s Private Bank, are considered gurus by financial planners for their advice on how to handle wealthy clients and get more of them.

Thus, it didn’t surprise me about a year ago when Russ told me he was a partner in a new B2B magazine, Private Wealth, whose database was put together via tapping their databases of the financial advisors. I have even written a few articles for them, sharing with their Financial Advisor readers on the ins and outs of private jet travel.

Private Wealth, the first and only magazine to exclusively target advisors and providers who cater to the financial, legal and lifestyle demands of the ultra-affluent, is published six times a year by Charter Financial Publishing Network (publishers of Financial Advisor magazine). Private Wealth distinguishes itself with high-quality, sophisticated editorial drawn from the extensive academic and practical experience of its contributors. The publication is intended for the advisor or provider whose established business is centered on the exceptionally affluent, targeting professionals who, at the minimum are controlling $500 million in client assets, and whose average client is worth $ 5-10 million, at the minimum.

The initial circulation is 30,000– powered by a number of exclusive relationships with prominent Associations and Organizations serving the wealth management industry (the PW media kit includes a complete list of these partners).

Through a special agreement with the publishers of Private Wealth, you are invited to advertise in the publication at 25% off any earned frequency rate. For more information on advertising in Private Wealth, contact Kevin O’Toole, associate publisher at 773-327-4911, kotoole@fa-mag.com, or click here to download the complete Private Wealth media kit.

I can safely tell you that I would recommend allocating some of your dollars to publications such as Private Wealth ahead of the “Trading Down” readers of Mass Affluent publications. Of course, don’t forget Elite Traveler! Anyway, please take a look at Private Wealth and I encourage you to contact Kevin.

YOUR BEST CUSTOMERS ARE HERE: Elite Traveler delivers more readers (318,000) with a $1 million + Household Income than Departures (34,000), Robb Report (30,000), Town and Country (47,000), Vanity Fair (44,000) and The Wall Street Journal (128,000) combined. Source: Prince & Associates for ET, MMR for others