Elite Traveler – ET Insider – March 24, 2009
ET Insider – March 24, 2009
Elite Traveler Insider –
March 24, 2009
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. Death of the Middle Class Millionaire and Their New Shopping Haunts
3. Super Rich Keep The Light Burning For Mega Mansions
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. Death of the Middle Class Millionaire… and Their New Shopping Haunts…
Long the driver for the trend of trading up, and the powerful engine to Luxury for the Masses, a recent piece by Robert Frank in his Wall Street Journal column showed that in 2008 the bottom fell out of the low level millionaires as they got clobbered in the market, by declining home prices and a spending hangover that has sent them back to their Middle Class sensibilities sans the luxury autos, five-star vacations and designer fashion and jewelry.
In fact a recent survey by The Luxury Institute showed some of the favorite shopping venues for the Mass Affluent consumers are not on Madison Avenue or Rodeo Drive, but are in big boxes – and not the blue type. Target and Wal-Mart were in fact at the top of the list as this once high-living segment now counts every penny.
Frank reported, “the population of millionaires in the U.S. fell 27% last year, according to a study by Spectrem Group, the biggest percentage drop since the wealth-research firm started collecting its data about a decade ago. The Chicago firm’s millionaire population study showed that the number of households in the U.S. with a net worth of at least $1 million (not including primary residences) dropped to 6.7 million in 2008 million from 9.2 million in 2007.
“The number of households with investible assets of at least $1 million sank 26% to 4.4 million from 5.98 million. Households with a net worth of $5 million or more also took a hit, with the ranks falling to 840,000 from 1.16 million.
“The population of millionaires is now at levels last seen in 2003-2004, meaning that the economic crisis has all but erased the millionaire boom of the past five years…
“The study also showed that nearly half of all millionaire households had lost more than 30% of their net worth, with 17% saying they had lost 40% or more.”
I think the two surveys support the private jet traveler marketing model even more. The fact is travel by private jet today from a marketing perspective identifies two critical criteria: The folks today on private jets are still substantially wealthy; and even more importantly, they are not hunkered down but are still living the private jet lifestyle. As MarquisJet founder and CEO Ken Dichter likes to point out, when you are on a private jet, life is good.
And for marketers today, what’s better than a market that’s rich and happy?
Elite Traveler’s BPA audited circulation aboard private jets and mega-yachts in over 100 countries means your ad is guaranteed to reach the highest spending luxury audience in the world no matter where they are from and where they happen to be today – each issue is read by 407,000 readers with a Household Income of $1 million +, the highest of any magazine or newspaper in the world! Sources: 2007 Prince ET/MMR for others
2. Private Jets Talk Back
Recently, Robert Frank had a good piece in his WSJ blog outlining how the private jet industry is coming to the defense of its customers. Prince & Associates in January conducted for Elite Traveler some extensive research with private jet owners, and a couple of the key findings showed they aren’t giving up their jets. They earned their money themselves, therefore they have no guilt about spending it. You only live once, right?
With that in mind, I wanted to share some of the comments back to Frank’s blog that I thought were interesting:
1:05 pm March 9, 2009 Curt wrote: Private aviation results in 1.2 million American jobs, and a yearly economic impact of over $150 Billion. It is one technology area where we still are a world-leader, with Gulfstream and Cessna being prime manufacturers; foreign jets largely use U.S. made engines and cockpit avionics. It’s a net export industry. All a jet does is provide incredibly efficient transportation; in the right hands, used the right way, it is an extremely powerful tool in the furtherance of a prosperous economy. Only viewing the excesses of improper use by failed companies is a myopic and distorted view of a tool that can really make business fly.
1:48 pm March 9, 2009 Dave Stone wrote: How ironic and sad that our captains of industry and commerce allow themselves to be tarnished by the lowest elements of our country, our elected politicians. The politicians who preen and primp before the cameras at hearings they’ve called to beat up on the private sector, then quietly take off in their transportation we pay for. This will continue until people with guts stand up to these petty tyrants.
2:10 pm March 9, 2009 DRW wrote: Coming from the user of the world’s largest business jet – Air Force One – it is hard to take these comments seriously. And President Obama is considering the purchase of a fleet of Presidential helicopters. A fleet of about 30 helicopters! I can understand one helicopter to use and one backup. I can even understand another backup for a total of three. What is the justification for about 30 helicopters to carry the President?
2:11 pm March 9, 2009 Jack wrote: The CEO that takes a private jet to his golf outing, got to spend multiple additional hours at work being productive. A CEO’s time is much more expensive than the savings he would get from flying commercial. Plus for each private jet, multiple people are employed for that time period around 3 employees for 1 passenger. Commercial flights will give about 8 employees for 300 passengers. You do the math.
And who flies a private jet from Washington to California nearly every week? That would be the Speaker of the House, Nancy Pelosi. And that one is paid by TAX DOLLARS.
2:20 pm March 9, 2009 Kyle wrote: As Curt wrote, don’t just focus on the negative items you hear about. What you fail to hear about is how many private jets are used at the cost of the owners, to do volunteer flying for cancer patients, terminally ill patients and burn victims, to get them to various treatment facilities throughout the country that they would have never been able to get to had someone not offered the services of these planes. There are many times that these planes are used for good duties, productive business duties as well as those who sometimes use them in excess but that is the case for many things…
2:29 pm March 9, 2009 Peter wrote: Why does Pelosi get a free pass on her private airplane at tax payer expense?
2:35 pm March 9, 2009 Tom wrote: The new helicopter fleet was started by the Bush administration – and was to be delivered before the end of Bush’s 2nd term. But, as is so common with government programs, it is past schedule and over budget.
2:41 pm March 9, 2009 Louis wrote: There is absolutely nothing wrong with a private jet. What is wrong are people who abuse the privilege. If your company is doing poorly and you still insist on using the corporate jet instead of saving money, I would ask you why. If you are traveling to Washington to ask for money from the Federal government but you are traveling by private jet, I would ask you why. Private jets are a tool and some company executives travel by private jet for security purposes.
3:05 pm March 9, 2009 David wrote: Nancy Pelosi has no problem using tax payers’ money on a large private jet for her three day weekends in California. Please keep spending our children’s money Nancy!
3:11 pm March 9, 2009 Dan wrote: If the boards would govern the actions of executives correctly, and not just be rubber stamps lackeys of CEOs and their minions, we’d be ok here. Private companies should be able to do as they please, or at least as the board pleases. Either way, lots of sacred cows get shot during backlashes – even some that shouldn’t. I just hope my company’s CEO isn’t wasting time with his shoes off in some security line at JFK. I need him to get out and line up some more financing for us!
3:19 pm March 9, 2009 Bill wrote: I remember the glee that a fellow meditation retreatant expressed in 2003 when Mayor Daly bulldozed Meigs field. “I love seeing all those fat cats take a hit for a change,” he said. I replied with a question: “What about the people who fuel those airplanes? How about the receptionist at the FBO? The ramp workers, the tower controllers, the mechanics, the sales staff, all the so-called little people who work there?” He was astonished. He said that never occurred to him. Indeed. Envy, animosity and opposition help no one. I work for fat cats. Almost everybody does. Am I ever envious? Sometimes. Do I want my fat cat to perish? Uh, that would be No.
3:41 pm March 9, 2009 Anonymous wrote: As one of my employees so nicely put it “an hourly worker never wrote anyone a paycheck.”
3:42 pm March 9, 2009 Net Jets Fan wrote: There is a simple solution to all who don’t want to fly commercial. Buy your own fractional interest in an airplane. Pay for it yourself, and no one will complain. When the shareholders or the taxpayers are footing the bill, then you are accountable to them. These new shares will stimulate the economy without the added taxpayer (or shareholder) expense.
4:15 pm March 9, 2009 private is the only way to travel wrote: Unfortunately, I do not have the means to own my own jet, but I have flown private on numerous occasions and it is incredible. There is no way I would give up my private jet, the media and public be d*mned.
4:24 pm March 9, 2009 Valerian wrote: Right on with this article. Obama should encourage CEO’s to come to Washington in private jets (hopefully supersonic ones made in America) as long as they are not begging for bailout money. It’s the incompetent banks that should come crashing down, not private jets. And bring back the guillotine – it worked for France.
4:43 pm March 9, 2009 down with the rich! wrote: Congress and Obama is right. No one should ever fly private, EVER!! In fact, no one should FLY AT ALL. TAKE THE BUS!!! Greyhound is much cheaper and better for the environment than flying.
5:58 pm March 9, 2009 Jay wrote: If your personal or corporate finances allow for the use of a private jet then as far as I’m concerned go mad. For a company struggling with finances or even to stay open that is another and corporate responsibility should be considered. The government and media have just hit on something that most people will never have access to and a milking it for all it’s worth. As for companies who have cut back or eliminated private jets at their company for the public perception if nothing
7:03 pm March 9, 2009 ga peach wrote: Gulfstream laying off workers, hurts me, it hurts my town, many businesses in my town depend on Gulfstream employees, (restaurants, grocery stores, banks, auto dealerships), We can complain about those rich CEO’s and companies all we want, but truth be told they are the ones that stimulate economy, they buy the private jets we build, they build new homes, which employs a lot of workers to build. Just remember the next time you bash a company for owning nice homes, think about the people that built it, the stores that sold the material, when you bash someone for owning a private jet, think of me and my family and my town, and remember we benefit from building it.
8:12 pm March 9, 2009 FL Crush wrote: It does not stop with the manufacturers. That industry employs pilots, private flight attendants, mechanics, catering companies, limo services, flight coordinators, dispatchers, FBO personnel, aircraft sales agencies, aircraft management firms and so on. I’m sure I’m leaving many out but you get the picture. 99% of these individuals will enjoy the luxury of their own private flight. Believe me, the CEO’s will survive if they cannot fly private anymore. But will the groups I mentioned be able to survive
12:16 am March 10, 2009 A pilot’s Brother wrote: As the brother of a Corporate Pilot I find the uproar about companies using corporate jets ridiculous. What difference does it make whether it is a corporate executive using a jet for transportation, which is most likely being paid for by the company who won or leases the aircraft or the president or any member of government flying all over the world at the expense of the taxpaying public. Which scenario has the most negative impact on our economy? Something to think about I’d say.
12:49 am March 10, 2009 MichaelKarvan wrote: I (me) ruled in favor of flying private, my CEO (me) gave me the okay, my VP (me) gave me the green light, my board (me) ruled in favor, my accountant (me) said it is a great write off, and my conscious (me again) said it was stupid to listen to whiners griping about wealthy people flying private. I worked for my money, my cars, my homes, my shit and I do what I want with it and WTF, don’t we as free and opportunistic people get to do what you want in this country… as long as you earn it you can have it. Now all you bitchers go fly a kite.
8:37 am March 10, 2009 Sonya Beckley wrote: I’m glad someone is telling this side of the story. Business aviation is an important part of the economy and most companies that have them pay for them without government bailout money. Anyone at our company can be on the jet if there is a legitimate business reason for it. And we’re all thankful for the workers who made them and maintain them to keep us safe.
6:01 pm March 10, 2009 jetguy wrote: You will take my jet from my cold, dead hands!!!!
4:41 pm March 12, 2009 priscilla wrote: There is nothing wrong w/ owning/operating a private jet as long as your palms are not turned upward looking for a handout/bailout.
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. Super Rich Keep The Light Burning For Mega Mansions
Conde Nast folded home magazine Domino. Architectural Digest looks like a pamphlet. The home mortgage meltdown has meant aspirational consumers no longer have money to pay their mortgage let alone renovate their homes.
That said, the super rich seem to go on spending on their humble abodes, many getting inspiration for the hotels they stay in, including one Indian family that built the first mega-mansion skyscraper with bits of design from The Mandarin Oriental New York. We know our hotel suite stories in Elite Traveler have spurred many a renovation, and in fact, according to Prince & Associates, readers spend over $500,000 on renovating.
A recent Forbes.com piece spotlighted some of the private jet lifestyle on the ground:
“Low-key is a relative term among the super-rich. Computer mogul Michael Dell claims to live simply, yet built a 33,000-square-foot manse in Austin, Texas, in 1997. Called “the castle” by locals for its high walls and tight security, the home sits on a 20-acre spread a mere stone’s throw from Dell headquarters.
“Oracle Chief Executive Larry Ellison, a hard-core Japanophile, blew an estimated $100 million building a 23-acre, 10-building Japanese-inspired imperial villa in Woodside, Calif.
“But it doesn’t stop there. In recent years, he has spent an estimated $200 million snapping up a dozen commercial and residential properties in the ritzy beachside enclave of Malibu, Calif.
“In January, Russian-Israeli diamond magnate Lev Leviev bought the Palladio, an extravagant 17,000-square-foot manor outside London, for $65 million. (That works out to $3,823 per square foot, roughly twice the average in greater London.) The home includes a bullet-proof front door, gold-plated pool, indoor cinema and hair salon.
“It’s nifty amenities like these that help drive up the costs of billionaire homes.
“The $124 million sticker price for steel magnate Lakshmi Mittal’s 12-bedroom spread in London’s posh Kensington neighborhood includes Turkish baths and garage space for 20 cars. (No circling the block for an empty spot on Sunday nights!)
“Visitors to Bill Gates’ 66,000-square-foot compound in Medina, Wash, have the option of climbing 84 stairs to get to the ground floor–or riding the elevator.
“In addition to tennis courts and bowling alleys, Renco Group’s Ira Rennert’s 29-bedroom behemoth in the Hamptons, reportedly worth $170 million, boasts its own power plant.
“Of course, a handful of billionaires both live and work on their estates. Star Wars director George Lucas presides over Skywalker Ranch in Marin County, Calif. Skywalker Sound, a popular post-production outfit, is based on the 5,156-acre spread, which boasts its own fire brigade and draws the regular gaggle of tourists. (The ranch is not open to the public.) Star sightings are the norm. In 2000, Tom Hanks taped sound effects for Cast Away there; last year Sean Penn paid a visit to tweak Into the Wild. Lucas lives in the estate’s main house, where he displays Hollywood memorabilia like Charlie Chaplin’s cane, a prop whip used by Rudolph Valentino, and of course, Indiana Jones’ Holy Grail.
“Across the country, Donald Trump occupies the penthouse triplex of his Manhattan-based TrumpTower. The $50 million apartment, a monument to marble and gold, underwent recent renovations following the 2006 birth of Trump’s fifth child, this one by his third wife, Melania. Little Barron secured an entire floor for himself, with décor inspired by–who else?–Louis XIV. The Donald need only hop on the elevator to get to his offices, housed in the same skyscraper, making his perhaps the shortest commute of any billionaire.”
Elite Traveler’s BPA audited circulation aboard private jets and mega-yachts in over 100 countries means your ad is guaranteed to reach the highest spending luxury audience in the world no matter where they are from and where they happen to be today – each issue is read by 407,000 readers with a Household Income of $1 million +, the highest of any magazine or newspaper in the world! Sources: 2007 Prince ET/MMR for others.