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Elite Traveler – ET Insider – May 12, 2009

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ET Insider – May 12, 2009

Elite Traveler Insider –

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May 12, 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. Defending the Rich on NPR…And Helping The Economy…

2. Oprah Says Private Jets Are A Good Thing, and We Agree…

3. American Express Re-Affirms its Customers Are Worried…

4. More success stories from the past 2 weeks …

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. Defending the Rich on NPR…And Helping The Economy….

In my President’s Letter for the January/February issue, I urged readers that if they had money, they should enjoy it and spend it, and offered them the additional point that it would help the economy. As I wrote it, I thought that I might be setting myself up to be called “elitist,” among other things. But then again, one of the great attributes of a readership whose Average Household Income is $5.3 million and Net Worth is over $40 million is that I knew they had it, and I figured they still had a bit of room on the credit cards to help the economy.

Needless to say, the readership of Elite Traveler is not exclusively made up of Angels, nor do I condone readers who make money in illegal ways. Usually they find themselves as non-readers (not on private jets anymore, grounded for some period of time in a non-luxury resort). Of course, any editor understands that their readership, whether affluent or poor, is not entirely comprised of good Samaritans helping old ladies across the street.

At any rate, I was happy to survive a recent ambush attempt by Media Critic Bob Garfield on his nationally broadcast radio program On the Media last Friday. (By the way, I was and still am a long-time admirer of Garfield). In the end, hopefully (maybe) I was enable to enlighten a few folks to the importance of spending by the Rich to the many people who work in the fields of luxury, hospitality and many tangential industries whose livelihoods are currently impacted by the negative economy. If that’s the case, I will be extremely satisfied. The audio can be heard by clicking here; the transcript (with some notes) are below:

Introduction by BROOKE GLADSTONE: A few months ago, Doug Gollan, the editor in chief of Elite Traveler Magazine, written for people who own private jets, wrote a letter to his readers. Doug writes these letters every (other) month, but this one seemed to hit a nerve. Harper’s Magazine reprinted it and bloggers discussed it.

The letter begins, quote, “As we enter 2009, it is amazing to see how the general media has tried to shame wealthy individuals into not spending. The fact of the matter is the economic slump was not caused by the wealthy, it was caused by aspirational consumers who took out bigger mortgages than they could handle, leased cars they couldn’t afford and took vacations they shouldn’t have.

Should a person with a net worth of, say, 100 million have scaled back his or her holiday party because of the times? If we want to speak about getting the economy going again, the answer is no.”

He continues. “I do hope you continue to do the things that provide you the enjoyment that you’ve earned and your financial wherewithal supports. There are quite a few people depending on it. With best wishes for an Elite 2009, all the best, Doug Gollan.”

BOB GARFIELD: Gollan’s letter suggested that the rich have a bit of a P.R. problem. When we called him in Acapulco – where he is, naturally, on business – (it is called Tianguis, the Annual Mexican Travel Fair) he told us he wrote it in response to the outrage surrounding a multimillion-dollar birthday party thrown by Steven Schwarzman, a New York City businessman and investor (Actually they added that later; the letter was just to remind readers how important their spending is and I used the Schwarzman birthday as an example).

DOUG GOLLAN: If you started to say, where did that two or three million dollars for that party go, well, you know, some of it went to the florist, who employs people and had to furnish all of the table settings and the flowers. Obviously, money was spent on a caterer, and that caterer probably for that evening had to hire additional people – busboys, waiters, bartenders, you know, the people who clean up after a party for 500 or 600 of your favorite friends.

(I also mentioned – it was edited out – the Town Car drivers, the decorators, the music techs who support the bands and entertainment, the off-duty police who probably make some extra money working security, etc.)

And so, part of the motivation for writing this was understanding the importance that our readers hold for the economy. And my message was really simple. If you want to do it, you’re entitled to do it. By all means do it because you’re going to help the economy more than by keeping the money in the bank.

BOB GARFIELD: So you’re a populist.

DOUG GOLLAN: Yeah, exactly.

BOB GARFIELD: Man, yeah well –

DOUG GOLLAN: [LAUGHS]

BOB GARFIELD: – or not.

DOUG GOLLAN: [LAUGHS]

BOB GARFIELD: Did it occur to you that people would read your piece as just tone deaf to the misery and despair of, you know, ordinary people who are in extremis in these difficult economic times?

DOUG GOLLAN: I love when people talk about people being tone deaf because I would turn it right around. What’s better for that caterer in Newark, New Jersey, to have someone throwing the party or to tell their people, we have no business this week, I can’t pay you?

In terms of having the right message, I think my message is maybe more on target than a lot of the stuff that’s being blabbed about on these nightly cable programs. [LAUGHS]

BOB GARFIELD: Tell me about the audience for Elite Traveler.

DOUG GOLLAN: Six-hundred-and-fifty-thousand readers, the magazine comes out bimonthly. And if you want an average household income, it’s 5.3 million. The main distribution is aboard private jets and also some of the big yachts, in the summer in the Mediterranean, in the winter in the Caribbean.

BOB GARFIELD: When your readership encounters a television show like, for example, Real Housewives of Orange County or Real Housewives of New York or of Atlanta, or any of the places that these freaks reside are they appalled? Are they themselves fascinated? Or are they – you know, is there chagrin over the fact that they’re somehow being caricatured, along with the rest of the cartoon characters that populate these shows?

DOUG GOLLAN: Well, that’s a, a good question. I would say most of the people on those shows, obviously, don’t represent our readership because they’re more at that aspirational level, and they’re not people who are at the level in terms of wealth where they’re flying by private jet.

BOB GARFIELD: Okay, so the hoi polloi have always had a kind of love/hate relationship with the rich. And at a time like this, I suppose the resentment tends to spike.

DOUG GOLLAN: I think, you know, seeing the wealthy on their yachts and their jets was generally tolerable when they were also able to dip their toe in the water. But, obviously, we’re in an economic crisis right now, and many of with their mortgages in their own homes, they’re underwater – car payments and things like that – they are having to make cutbacks in their own lifestyle. And, you know, it’s a little bit maybe of envy that they see other people who are financially so well off that they don’t have to change the way they live.

BOB GARFIELD: So do you have any other advice for the fundamental P.R. problem in 2009 of having more money than you know what to do with?

DOUG GOLLAN: Unfortunately, it starts to a degree in Washington, D.C., where you have elected officials whose number one job is to get reelected. And certainly, trying to explain to the general public the importance of rich people is probably not what you would call a great campaign platform. So, you know, it’s a challenging time, I do believe, for our readership. But if there’s a good P.R. person out there that’s got an idea, put them in touch with me.

BOB GARFIELD: [LAUGHS] All right. Doug, thank you so much.

DOUG GOLLAN: Bob, it was a real pleasure. And, again, thank you, and a pleasure to talk to you.

BOB GARFIELD: Doug Gollan is president and editor in chief of Elite Traveler Magazine.

Thanks to Bob for giving me a chance to get the message clearly out there.

In response, I got the following email that I appreciated:

I listened to your interview on NPR today and I wanted to say that I agree with your position on the spending of the wealthy. I live in Newport, Rhode Island, a town which is survives almost completely on servicing the well-to-do. While I have my doubts about the theory of trickle-down economics as a whole, wealthy people spawn entire industries to service even their most frivolous pursuits. Instead of resenting them, which is a pretty worthless endeavour, I say, “Go spend!” As a boat builder specializing in restoring wooden yachts, I depend almost completely on wealthy clients. Whether they like it or not, most of Newport has to admit the same in one form or another.

However, I don’t think it’s necessary to be an apologist for this opinion. I suspect one of the aspects of being a truly wealthy person requires a certain imperviousness to public opinion. Luckily for us, the rich tend to do what they want, regardless of the economy. It’s the upper middle class that I worry about. The ones that aren’t quite secure enough in their assets to not worry about their expenses. They’re going to make this summer tourist season pretty uncomfortable for us. I’ll be keeping my fingers crossed. It was a good interview, though, and I hope you have a successful summer.

Best Wishes,

Adam Palmer Newport, RI

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. Oprah Says Private Jets Are A Good Thing, and We Agree…

From Robert Frank’s Wall Street Journal Column:

The private-jet industry may have finally found its savior.

During a speech to Duke University’s graduating class, Oprah talked about the secrets and joys of success. Among them: owning a mansion and a jet.

“It’s great to have a nice home. It’s great to have nice homes! It’s great to have a nice home that just escaped the fire in Santa Barbara,” she told the students. “It’s great to have a private jet. Anyone that tells you that having your own private jet isn’t great is lying to you.”

She went on to explain that “you haven’t completed the circle of success until you help someone else move to a higher ground and get to a better place.”

The golden nugget here is the jet part. In these times of hair-shirt capitalism and envy politics, the wealthy have been going to great lengths to pretend they don’t enjoy luxury or want nice stuff. If Oprah were like most of the faux-populist rich today, she would have said something like, “I don’t need private jets, in fact I’m happier flying commercial and living in a small house. I like the simple life.” Of course, she would be lying.

But she didn’t. She told the truth, which is that flying in a private jet is one of the great material perks that money can buy. (Talk to anyone who used to be rich and they will say one thing they really miss is the jet. Apparently Oprah’s ride is a $42 million custom-build Global Express XRS built by Bombardier Aerospace).

For the past few months, the private-jet industry has been mounting an enormous public-relations campaign to get people to fly private again. It will take a recovery and wealth creation to really turn the business around. Perhaps for the public-relations part, it should forget all the boring arguments about jobs and productivity and efficiency and run a picture of Oprah with one simple line: “It’s Great to Have a Private Jet.”

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. American Express Re-Affirms its Customers Are Worried…

I have never thought worried customers were a good target for luxury sellers. That’s why I always make the point that the people flying today by private jet represent the premium target as these folks, by using their jets, are making a statement that they remain relatively unaffected and have a positive view of the future. It also tends to put one in a good mood when they are taking off from Van Nuys, Teterboro or the private airport in Cannes.

American Express of course has been battered as its core Mass Affluent customer base has increasingly defaulted on charge and credit cards and cut back spending, and a new survey demonstrates the extent.

“The Survey of Affluence and Wealth in America,” presented by American Express Publishing (Departures, Travel + Leisure, Food & Wine) and Harrison Group, found that 53 percent of its readers worry they could run out of money. Almost three out of four (73 percent) cited a belief that the current recession will last longer than a year. That marks a 10 percent jump from those who felt the same way in December 2008, and a 25 percent increase over September 2008. The same group is deeply concerned that the United States could be headed for a depression.

The study contains further grim news for jewelers: Jewelry has been grouped into the same category as private jets when it comes to items that the rich are not willing to spring for–at least for the time being.

“Our data suggests that in 2009, we’ll see a decline in retail spending among affluent and wealthy consumers,” says Jim Taylor, vice chairman of the Harrison Group, a Waterbury, Conn.-based marketing and research consulting firm that co-authors the quarterly study. “The negative outlook is, however, modifying. The rate of decline is now in the single-digit range for everything we measure, except private jets and jewelry. This contrasts with rates of decline in excess of 25 percent last year, in luxury categories.”

At the same time, the recession continues to bite deeply into purchasing intent, the survey said. Across the 15 categories measured, the trend line suggests continued, although moderating, drops in purchases in the categories of fashion, automobiles, luxuries and jewelry.

The report also notes that “being in the black is the new black,” and that more than three-quarters of those surveyed (76 percent) reported taking pride in their newfound thrifty shopping habits, and another 65 percent now describe themselves as “smarter” shoppers.

“Beginning last Christmas, shoppers–especially women–began to take pleasure in saying no to unexamined consumption,” Taylor said. “They began to take pride in their ability to resist the urge to buy and started to examine why they needed a new dress, a new fixture, anything really. And then, they derived pride–self-esteem–from their ability to make careful, reasoned purchase decisions.”

During the past 12 months, respondents have also been saving 16 percent more of their household income and increasing contributions to their retirement plans by 6 percent, the study showed. At the same time, they’ve reduced their financial investments by 7 percent. The dramatic shift toward saving, versus spending, underscores respondents’ beliefs that the recession will continue for an extended period of time. More than three out of four said that the real estate and banking crisis has negatively affected their sense of financial security.

The study included more than 1,500 upper middle class, affluent, super affluent and wealthy individuals, and was designed to assess the impact of the current economic turmoil on financial planning and spending. The respondents have discretionary annual incomes of at least $100,000, ranging up to $5 million.

Representative of 10 percent of the American population, the group accounts for half of all retail sales, 70 percent of all profit margins at retail and 80 percent of all non-retirement account assets, according to a release on the study.”

As mentioned, fortunately for luxury marketers Elite Traveler readers continue to put their money where there mouth is, and support the economy!

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.

3. More success stories from the past 2 weeks…

– Mr. G. S. from Shanghai, China spent over $100,000 on monthly business class trips between the US and Asia and within Asia on Cathay Pacific

– Mr. F. C. of Marlboro, NJ spent $12,000 on an a stay at the Four Seasons Resort in Great Exuma, Bahamas

– Mr. M. C. of Bermuda spent $29,000 on two Hublot “Big Bang” watches

– Mr. D. C. of Phoenix, AZ spent $3,800 on a Brioni suit

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!

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