ET Insider – March 17, 2010

Elite Traveler Insider –

March 17, 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. Recovery Shows Luxury Needs To Think Global, Shoot Higher

2. Happy St. Patrick’s Day: Pre-Clearance For Private Jets in Ireland

3. Seoul Joins The Private Jet Crowd

4. Difficult Times for Robb Report: Southease Asia Edition Closes as U.S. Robb Report Sees Single Copy Sales Plummet

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. Recovery Shows Luxury Needs to Think Global, Shoot Higher

An interview in The Financial Times with Swatch Group Chief Executive on the eve of Baselworld affirmed that coming out of the worst recession since the depression of the 1930s, luxury groups need to take a more global view and look for more affluent customers.

In several meetings this week in Italy, executives of Italian luxury brands backed up that assertion. With today’s core customer for luxury more likely than ever to be highly affluent, one key trend is that high net worth individuals and their families continue to be highly mobile, crossing oceans and hopping between continents the same way the rest of us might go to our weekend house a couple hours away.

The highly mobile nature of these elite travelers has large ramifications for luxury brands and providers: Firstly, as moving targets they are harder to reach through traditional media, and as importantly, as the hop the globe they are likely to make more of their purchases while traveling. With three, four or five principal residences, it is also hard to tell if these core luxury customers are home or away, another challenge for traditional media.

Speaking of the rebound to the FT, Mr. Hayek noted group sales in 2010’s first two months had been “strong, while March was very promising”.

Sales of watches and jewelry were not just well above depressed 2009, but even “a single-digit percentage point” higher than the boom year of 2008, suggesting 2010 could be another record for sales and earnings, in spite of the strong Swiss franc.

According to the FT, the figures vindicated Mr. Hayek’s optimism in the thick of the downturn, when he argued the setback was only temporary, despite troubles for some small independent watchmakers and even short-time working and layoffs at bigger rivals.

Underlining the need for a global marketing and communications perspective, he highlighted that the rebound was “not just resilient Asian markets, especially China, but even laggards like Europe and the US.”

Mr. Hayek said Japan, the US and Spain, three markets worst hit in the downturn, would remain “more challenging” in 2010, but insisted there were encouraging signs even there. And of course the target of customers who fly by private jet confirms to marketers that this audience is still well to do financially and living the private jet lifestyle.

For Mr. Hayek and the Swatch Group, he will be hoping they shop among its brands such as Breguet, Blancpain, Glashutte, Jaquet Droz and Omega with maybe even a few hundred Swatch watches as party favors.

One thing is for sure: the Aspirational Market isn’t coming back to luxury soon. In an article earlier this week, The New York Times stated, “The Federal Open Market Committee, the Fed’s chief policy setting arm, in a brief statement, cited recent evidence that ‘Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit,’ it added. ‘Business spending on equipment and software has risen significantly. However, investment in nonresidential structures is declining, housing starts have been flat at a depressed level, and employers remain reluctant to add to payrolls.'”

Out of the Box: Looking for new and innovative ways to efficiently and cost-effectively target potential customers? Advertise in the only worldwide audited magazine aboard private jets, Elite Traveler, 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. Happy St. Patrick’s Day: Pre-Clearance For Private Jets in Ireland

Elite travelers on their private jets will be now be able to “cross the US border” at Shannon airport following the extension yesterday of the airport’s US pre-clearance and customs and border protection facility to private aircraft.

According to a report in the Irish Times, the facility will allow passengers on US-bound private jets that have pre-cleared at Shannon to land in the US as domestic passengers.

The pre-clearance at Shannon for private jet travel is the only one of its type outside the Americas following an agreement between the US and Irish governments.

Interviewed by the Irish Times, Shannon Airport Authority board member Mark Nolan said: “Time after time in its history, Shannon airport has led the way internationally in aviation innovation and once again, here we are first in the field with an aviation winner of great significance to Shannon, Ireland and Europe . . . The facility provides a unique opportunity to develop substantial new private aircraft business.”

Formally opening the service, US ambassador Dan Rooney said: “Pre-clearance is a tremendous idea . . . It is going to be good for Shannon and the entire area.”

The new facilities will allow US government personnel to carry out nuclear and radiation screening of passengers and items.

Chief executive of the European Business Aviation Association Brian Humphreys welcomed the work “to create a new US border at Shannon airport”.

However, Dr. Vincent Cunnane, the chief executive of Shannon Development and a Shannon Airport Authority board member, said there was a need for additional marketing funds to promote Shannon’s new customs facility for private jet travel.

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. Seoul Joins The Private Jet Crowd

With Flag carrier Korean Air offering private jet service options to its First Class passengers and the Korean economy attracting more investment as well as Seoul’s position as a North Asia gateway to China, it should come as no surprise that private jets are catching the attention of the Korean media.

One recent article lamented that while “it takes 26 hours by plane and a layover in London to get to Cape Town, on the other side of the world…it takes only 18 hours if they depart from GimpoAirport on a private jet and pass through Mumbai, India for refueling.

With the Korean attention to industry, the article noted, “That’s an eight-hour reduction in flying time – an extremely valuable savings in the business world.”

Written by the Dean of Korea Aerospace University College of Aviation and Management, the story explained, “The insides of these jets resemble convenient private offices.”

The standby times during departure and arrival are significantly lower when using a private airport terminal, and it takes less time to transfer at the middle stop, too. This is why it’s possible to create economic value that is greater than the huge cost of using a private jet.

According to the article, “the international market for private flights is growing. Jets have become a new form of transportation in recent years, evolving into a pleasant, efficient way to travel for small groups. The phenomenon surfaced as a new class and established itself in the global age.”

Quoting various reports, the article noted, “Business jets in the United States focused on international travel are creating an economic effect to the tune of more than $15 billion per year. ”

And referring to the growth in Asia for private jets, the article put out, “The number of business jets increases exponentially every three days in India, and companies and wealthy individuals in China are expected to buy 600 of these types of planes by 2015.”

Turning to its home Korea market, the piece noted, “Demand is expected to increase by leaps and bounds in the future. Many foreign executives use private jets to fly into Seoul as well. Geographically, Korea has very advantageous conditions as a middle stop that connects the Americas with economic powers such as China and countries in the Middle East.

Only Elite Traveler can guarantee you that your ad dollars are reaching wealthy consumers who are still spending. What do we mean? Our 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. Difficult Times for Robb Report: Southeast Asia Edition Closes as U.S. Robb Report Sees Single Copy Sales Plummet

Single copy sales are often considered the sign of health and vitality for paid publications. (By way of disclosure, Elite Traveler is a controlled circulation publication. Our BPA audited circulation is designed to reach the Uber Wealthy where they live, or in other words in their private jets and in private jet terminals worldwide through what is often times termed Verified, Free or mainly Controlled Circulation.)

One of the reasons magazine watchers pay attention to single copy sales for paid publications such as Robb Report is that it’s relatively easy to manipulate subscriptions with incentives, while selling your magazine on the newsstand is a benchmark of whether or not a consumer is interested in the content.

Having noticed some interesting subscription promotions from the Robb Report U.S. edition and having seen parent CurtCo busily selling off sister titles such as Worth, Showboats and Robb Report Home Entertainment, I asked our Circulation Director to take a look at Robb Report’s ABC circulation statements for the past two years as I had that feeling something might be afoot.

Among the most telling numbers was that from June 2008 to December 2009 publisher’s statement, single copy sales of Robb Report dropped from 48,221 copies to 31,142, a decline of 17,079 copies or some 35 percent.

Interestingly while Robb Report’s paid subscriptions remain virtually flat at 51,376, helped by a 10 percent discount in subscription pricing, Robb Report is attempting to make up the shortfall by increasing its controlled, or verified circulation, increasing its numbers in that category by close to 150 percent from 8,837 to 19,252.

Now while I welcome Robb to try its hand at Controlled Circulation – done right it is extremely effective for hitting specific targets (i.e.- Uber Wealthy consumers flying around on their private jets), if you are interested in reaching private jet travelers there is no match between Robb Report and Elite Traveler.

According to the latest respective publisher’s statements, 77, 839 copies of each issue Elite Traveler go to private jets and private jet terminals (it will increase even more in our next statement coming in the next few weeks!) while Robb claims a mere 4,284 copies in Transportation Outlets, which as defined could mean anything from a Bus Terminal to Airline Lounges to an FBO.

(As a side note for Elite Traveler, an additional 14,891 copies go to First Class lounges worldwide, including British Airways, Virgin Atlantic, Lufthansa, Air France, Thai International, Emirates, El Al, Japan Airlines, SkyTeam, One World and Star Alliance.

The remaining 15.5% are split between Pro Sports Team Locker and Training Facilities, Yachts and Yacht Marinas, Luxury Residences, Boutiques, Exclusive Country and Golf Clubs and Luxury Car Services. Each channel of distribution is broken out on our Circulation Statement with the goal of giving advertisers unprecedented understanding of who gets our magazine and the assurance it is being delivered to the highly desirable targets we say we do.)

While the closing of its Singapore based Southeast Asia edition certainly is not a good sign for Robb Report, clearly the publication is facing some significant challenges with its circulation. A report from Singapore said the March issue of Robb Report there will be its last.

Out of the Box: Looking for new and innovative ways to efficiently and cost-effectively target potential customers? Advertise in the only worldwide audited magazine aboard private jets, Elite Traveler, 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.