Elite Traveler – ET Insider – May 24, 2011
ET Insider – May 24, 2011
Elite Traveler Insider –
May 24, 2011
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. Bloomberg/Unity Marketing: Nearly Rich Still Cutting Back
The value of your house goes down 33 percent, your spouse gets laid off and you haven’t gotten a raise in three years. No wonder you aren’t off on a shopping spree, and those ads for H&M seem a lot more relevant. A recent article in Bloomberg citing Unity Research and other leading analysts underscored the obvious: “The nearly rich aren’t spending nearly as much as the wealthiest Americans on luxury brands.”
Looking at the segment that earns between $100,000 and $249,999, economist Robert Dye concluded, “The nearly rich are being constrained by falling home prices, income gains that lag behind inflation, 9 percent unemployment and a reluctance to dip into savings after the recession,” according to economist Robert Dye.
The housing crisis and recession took a toll on these households, said Pam Danziger, president of Unity Marketing, a Stevens, Pennsylvania-based company that tracks luxury spending. These consumers — Danziger calls them HENRYs, or high earners not rich yet — still feel financially vulnerable, she said.
“In 2006-2007, this group was really spending their perceived wealth, and now they are spending their real income,” Danziger said. “They’re behaving in a middle-class sort of way, and the smart thing to do is to cut off indulgences quickly.”
Share of Spending HENRYs’ curbed shopping habits are limiting the pace of the recovery, said Danziger. Home values in 20 U.S. cities were down 33 percent in February from the record reached in July 2006, according to figures from S&P/Case-Shiller.
The Bloomberg piece noted elite travelers living the private jet lifestyle are in a separate category, “The highest-income shoppers are insulated from rising food and fuel prices by gains in their financial portfolios, said David Schick, an analyst at Stifel Nicolaus & Co. in Baltimore.”
The report also covers the auto sector: “Car sales also indicate more resilience among the wealthiest consumers, according to data collected by Schick of Stifel Nicolaus. Unit purchases of “ultra-luxury” cars like a Maserati, which costs more than $85,000, climbed 24 percent in April from last year. Demand for “luxury” autos like Acuras that cost between $35,000 and $85,000 rose 9 percent. “Delaying the purchase of a new vehicle was just one sacrifice HENRYs made after overextending themselves in the past,” PNC’s Dye said.
The conclusion was pretty straightforward and an important data point as luxury marketers decide who to target for their Fall media campaigns: “This is a different type of market where consumers can’t spend ahead of themselves,” leading to a tenuous economic recovery, Dye said. “We’re seeing a consumer who can keep pace with the economy right now, but really can’t drive the economy forward.”
Elite Traveler of course delivers those who are not affected, with approximately 411,000 readers who have a US $1 million + Household Income, more than Conde Nast Traveler, Travel + Leisure, Departures, Robb Report and Town & Country combined!
============================================================ Not another magazine or newspaper in that stack of unread mail: With over six private jet trips every two months, that’s at least six chances for wealthy private jet travelers to see your advertisement in Elite Traveler. And even better, share it with friends on the jet! ============================================================
2. Private Jet Travelers Boost Turks & Caicos
One of the programs I am particularly proud of during our first 10 years was an ongoing advertorial series we produced on behalf of the Tourism Board of Turks & Caicos. A destination that was relatively out of the limelight, our ongoing series began by pitching real estate developers on why they should consider Turks & Caicos for hotel, resort, spa and marina development. The program won several awards from HSMAI, the Hotels Sales and Marketing Association International, for its execution.
More importantly it gained close to a half dozen multimillion dollar projects and was used by government development executives as a sales tool in their pitches. Much of that development was on the high-end, and despite the economic turmoil of the past couple years, and local political upheaval, a recent story in the local Turks & Caicos newspaper noted that arrivals at Provo Air Center have more than doubled in the past five years.
“We have had more than 20-percent growth each year over the past five years,” Provo Air Center’s General Manager Deborah Aharon said, noting that this included the last two years when the country overall has seen an economic slump.
2011 started off on a high-note: On January 2 there were 113 private jet flights at Provo, and according to the paper, “With an average of five passengers per aircraft, the FBO is making a significant impact on the overall economy of the TCI.”
Approximately 65 percent of the private aviation traffic is coming to the island for a planned stay-over vacation. With increased traffic come new faces, who bring new market share and revenue to the country.
Fuel stops make up the remaining 35 percent of the traffic that the service-oriented private air terminal received, a figure that surpasses most other Caribbean islands by 25 or 30 percent.
She says the stopovers are important not only for the revenue they create directly, but also the indirect revenue created by the visits. “Often times, people extend their stop by having lunch on the island. Frequently we even see they enjoy it so much they decide to stay overnight or make the decision to come back for another vacation.” Again with the support of the Tourist Board, PAC is also working on programs to attract more flight clubs to the TCI, especially focusing on the slower summer months. “Clearly,” says Aharon, “a good FBO can do a lot for an island economy.”
============================================================ With 41 trips per year, including 11 intercontinental trips and 3+ principal residences, we know where you’ll find elite travelers: in their private jets and in private jet terminals. It’s why we’ve invested in providing BPA audited circulation to private jets and private jet terminals in over 100 countries. ============================================================
3. Angelina and Brad: Portrait of the Private Jet Lifestyle
According to a recent newspaper report, “The A-list parents run up huge childcare, travel and food bills every month looking after their brood.
“They cough up an eye-watering £3million just on chartering private jets for the kids.
“Last month Angelina flew all six children to New Orleans to visit the set of Brad’s latest film, Cogan’s Trade, in which he plays a gangland boss.
“She also recently told Justin Bieber, 17, she would travel anywhere in the world with daughter Zahara for a private meeting with the pop star.
“And this week the proud mum and her kids were due to fly thousands of miles to help Brad renovate the family’s chateau in southern France.
“Sources close to the stars said the Hollywood pair splashed out £541,000 on a nanny for the youngsters last year.
“Angelina, 35, and Brad, 47, were also said to treat their family to first-class airline tickets, five-star hotels and lavish birthday parties.
“The source added: ‘They spend more than a million dollars on private tutors who travel the world with them.’
“They once spent $500,000 for one stay at the Waldorf Astoria hotel in New York.”
============================================================ Spotting Fakes: How can you be sure that a publisher is really sending out the number of copies he or she says? How can you make sure they are actually putting copies on private jets? Ask for the BPA or ABC audit statement. You can find our BPA statement here. ============================================================
4. Private Jet Charters Soar
Private jet charter industry company New Flight Charters reports flight activity for the first quarter of 2011 increased 37.0% over 2010. The company arranged 248 flights during the quarter, over 181 flights for the same period in 2010. A notable increase came in the number of large jet charters, including Gulfstreams, Challengers and Falcons, which increased 278% over 2010 and represented 14% of total charter flights for the quarter. Charters with other size aircraft were up 20.1% overall and proportionally remained constant. All aircraft sectors increased, with the large jet category up exponentially.
Costs for large jet charters averaged $45,924 overall for the quarter and included flights to/from Europe, the Caribbean and Hawaii. Leisure flights were the primary type of charter.
“Large jets are back to pre-recession numbers,” said New Flight Charters president Rick Colson. “Family vacations internationally were a large reason, specifically to the Caribbean.” The typical large jet trip was family members flying more than 5 hours to the Caribbean for a week’s vacation. Flights were from the nearest local airport, and non-stop each way, with over-flight privileges from US Customs, making it extremely convenient and easy for large families to travel.
============================================================ Would you buy a diamond without a certificate? Would you fly on a plane that hadn’t been certified as safe to fly? Would you buy milk in the supermarket that didn’t have a ‘sell by’ date? Before you buy advertising, next time a publisher says they have distribution on private jets or in private jet terminals, ask for their Circulation statement from ABC or BPA. Ask for them to show you the number of copies going to private jet travelers. You can find our BPA statement here. ============================================================
5. Wall Street Journal: For the BRICs, The Gold Is at the Top
While much media attention focuses on the growing masses of aspirational consumers, Robert Frank, the Wealth Editor of The Wall Street Journal, recently identified that even in Brazil, Russia, India and China (the BRICs) the Ultra High Net Worth consumers at the top of the pyramid control most of the wealth.
“According to new data from Wealth-X, the wealth research and consulting firm, Brazil, Russia, India and China now have a combined 25,600 people with $30 million or more in net worth (which includes shares in publicly traded and closely held companies, residential and investment real estate, art, planes, cash and other investible assets).
“That is about half the number of ultra-high-net individuals in the U.S., according to Wealth-X.
“The BRIC ultrarich have a combined net worth of $4.125 trillion, compared to $6.4 trillion for the U.S.
“What is most interesting about the BRIC data is the concentration of wealth at the very top of the wealth pyramid.”
Specifically, for China, as an example,11,474 UHNW individuals control some 33 percent of total HNW wealth while in India just 8,200 UHNW individuals control 20 percent of HNW Wealth even though they represent just one percent of that segment.
All the best,
Douglas D. Gollan Group President and Editor-in-Chief