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Elite Traveler – ET Insider – November 2, 2010


ET Insider – November 2, 2010

Elite Traveler Insider –


November 2, 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. Merill Lynch Cap Gemini 2010: A Super Rich Rebound

2. The Top Ten Reasons to Advertise in the January/February Issue of Elite Traveler

3. Unity Marketing’s Pam Danziger: Aspirational Market Still On the Rocks

4. Elite Travelers Go Shopping: Some Recent Purchases

5. How To Get More From Those Who Have It In 2011

============================================================ 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! ============================================================

1. Merrill Lynch Cap Gemini 2010:  A Super Rich Rebound   The latest World Wealth Report is out from Merrill Lynch and Cap Gemini, showing families at the highest echelons recovered virtually all their losses, with many having substantial gains.

After losing 24.0% in 2008, Ultra-HNW families saw wealth rebound 21.5% in 2009.  The report categorizes UHNWs as having at least $30 million in assets available to invest.

At the end of 2009, Ultra-HNWIs accounted for 35.5% of global HNWI wealth, up from 34.7%, while representing only 0.9% of the global HNWI population, the same as in 2008.

The select group of the Ultra-HNWs consisted in 2009 of only 93,100 households scattered around the planet.

The Needle in the Haystack:  Around one in every 75,000 people in the world is an Ultra-HNW, meaning marketers can’t effectively target these high luxury spenders through mass media.  Targeted media such as Elite Traveler (with audited distribution aboard private jets) and Elite Traveler Superyachts (reaching UHNWs aboard their yachts) provide best bets.

As one analysis noted, these UHNW households have investible assets roughly equal to the GDP of all European nations combined.

============================================================ 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. ============================================================

2.  The Top Ten Reasons to Advertise in the January/February Issue of Elite Traveler

1.  Distribution to private jets arriving and leaving from the Super Bowl February 6, the largest private jet event of the year.

2.  Financial Service Industry’s Top Producers Get their Bonuses End of January – they will be putting their wish list together as they pick up the Jan/Feb issue of things to buy and places to go

3.  Valentine’s Day gifts.  If you have a private jet, it’s got to be a good gift!  Elite Traveler is their guide!

4.  Awards Month (February) — Catch The Stars and Other Entertainment Big Wigs and they jet in and out of Hollywood for Awards Season

5.  Catch all the other wealthy private jet setters who will be coming and going from the NBA All-Star game in LA in February

6.  Miami Boat Show (February) – a melting pot for Ultra High Net Worth consumers arriving and departing by private jet

7.  PGA Golf Season kicks off January in Hawaii and Southern California with wealthy golf fans and top corporate executives descending in their private jets

8.  Fish Where The Fish Are:  The Super Rich have lots of money – according to The World Wealth Report, UHNW families (there are only 93,000 worldwide) control 35 percent of all assets!

9.  They like Elite Traveler:  91 percent find Elite Traveler high quality than other magazines.

10. They buy from Elite Traveler:

69% have purchased accessories seen in Elite Traveler 68% have purchased jewelry from Elite Traveler 68% have selected a hotel or resort for a meeting or event from Elite Traveler 65% have purchased apparel from Elite Traveler 58% have chosen a hotel or resort from Elite Traveler 56% have purchased a watch seen in Elite Traveler 40% have purchased real estate or vacation club memberships from Elite Traveler

============================================================ 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. ============================================================

3. Unity Marketing’s Pam Danziger: Aspirational Market Still On the Rocks

Unity Marketing is one of several companies that in my opinion do a good job of taking the pulse of the Mass Affluent Market – those with a Household Income of $100,000 to $400,000.

In her latest research, Pam Danziger states, “In continuing signs of struggles among the (Mass) affluent consumer market — the ‘heavy lifters’ in the overall retail economy — Unity Marketing’s exclusive Luxury Consumption Index (LCI) retreated in October 2010, dropping 6.2 points to 72.1 points.  According to the latest survey of luxury consumer confidence among 1,364 affluent luxury consumers (avg. income $298.3k; net wealth $7.3 million; 46.3 yrs; male 47 percent; female 53 percent).  These results have important implications for marketers and retailers preparing for the 2010 holiday season.”

The continued squeeze felt by the Mass Affluent means luxury purveyors will have to shoot high and more effectively target Super Rich consumers in North America.

“Luxury consumers started 2010 with a feeling of optimism that the worst of the economic turmoil was over.  But through the course of the year, reality hasn’t lived up to those expectations, so we have seen a retreat of the LCI throughout the year,” says Pam Danziger, president of Unity Marketing.  “Lower levels of affluent consumer confidence are playing out in terms of reduced of spending on luxuries.  In the third quarter, (Mass) affluent consumers spent 1.4 percent less on luxuries than they did in the second quarter, with declines seen in expenditures in most of the 22 categories of luxury goods and services included in the survey.”

Danziger takes issue with the robust luxury forecast by Bain and Company reported in the October 18 Wall Street Journal: “The word from Bain is that the luxury goods sector’s ‘recovery has been faster than expected.’  I disagree.  The affluent consumers surveyed show a very reserved and cautious attitude about future luxury spending.  Nearly half (49 percent) expect to spend the same on luxury in the next twelve months and about one-fourth (24 percent) say they will spend less.  While luxury consumer confidence is much higher now than it was at the close of 2008, Unity Marketing’s measure of the pulse of the affluent consumer market still signals caution for marketers.  Now is not the time to sit back and breathe a sigh of relief.  We still have a long way to go before the affluent consumers feel confident enough to spend as freely as they did in 2006 and 2007.”

============================================================ 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. ============================================================

4. Elite Travelers Go Shopping:  Some Recent Purchases

Ms. M. M. of New Westminster, BC spent $3,500 on a trip to Baja California Sur, Mexico

Mr. J. S. of San Antonio, TX spent $3,300 on a Breitling Airwolf watch

Mr. D. P. of Yardley, PA spent $29,000 on an F.P. Journe Chronometre Souverain

Mr. D. M. of San Diego, CA spent $12,000 staying at several Four Seasons properties

Mr. D. S. of Bryn Mawr, PA spent $15,000 on a stay at the Four Seasons Hualalai

Mr. A. P. of Baltimore MD spent $192,000 on a Mercedes Benz S320

Mr. P. P. of Brooklyn, NY spent $3,000 on a weekend at the Ojai Valley Inn and Spa

Mr. R. H. of Valley Village, CA spent $2,600 on a visit at the Ojai Valley Inn and Spa

Mr. A. B. from Bishop’s Stortford, UK spent $17,000 on 2 hotel rooms at the One&Only Le Saint-Geran

Mr. W. S. of Missoula, MT spent $6,000 on a stay at One&Only Palmilla

Ms. A. G. of Morganville, NJ spent $30,000 staying in a suite at One&Only Palmilla

Mr. C. S. of Falls Church, VA spent $4,500 on men’s clothing at Ralph Lauren

============================================================ 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. ============================================================

5.  How To Get More From Those Who Have It In 2011

Recently I wrote the below piece for Luxury Society, and wanted to share it with you.  Please take it as no more than my own viewpoint, but hopefully of some help.

Luxury Marketers Need To Aim Higher, Get More Focused & Work Harder in 2011

Douglas Gollan, group president and editor-in-chief of Elite Traveler Media Group, outlines why segmenting the luxury market into unambiguous wealth cohorts is the way forward:

The fog from the financial crisis may have cleared, but with economists still divided on the outlook for key luxury markets such as the United States, the likelihood that  aspirational consumer spending on luxury products and services sees a significant rebound seems remote.

Jobless recovery and layoff fears continue to spook the Mass Affluent (consumers I define as having a Household Income of $100,000 to $500,000 per year) as they struggle with high expenses they took on during the glory years (big mortgages, big car payments, vacation homes) against the knowledge that a large portion of their Net Worth (house and stocks or 401k) is still substantially below where it was 36 months ago. At the same time the newest Merrill Lynch Cap Gemini research – The World Wealth Report – shows Ultra High Net Worth Households (those with at least $30 million in investible assets) recovered most of their losses from 2008 during 2009. With access to better investment advice than Main Street Affluents, these UHNWs in some cases have made significant gains in 2009 and 2010.

Stories such as the one about hedge fund manager David Tepper who personally took home $2.5 billion by buying Bank of America and Citigroup while others were running for the exits underscore that there is still a large amount of money out there just waiting to be enticed by amazing villas, exotic safaris, fine Swiss watches and attractive jewelry. Tepper’s clients took home $7 billion.

In my conversations with various luxury brands, high-­end sales are continuing. However, there is a common theme that I continue to hear:  Making the sales has become more difficult, with a longer sales cycle and more work.

What is missing from the stories such as the one about Mr. Tepper is the instant big hits are fewer and farther apart. This means that the head of household worth say $150 million is more likely to have the viewpoint that in three years his or her Net Worth will climb to say $165 million whereas in 2007 that same person may well have thought they were months away from becoming a billionaire.

So while these consumers are extremely rich by any standards, the sun has set on the days of being able to count on consumers who would come in your store or hotel and literally throw money at your cash register.

Cue the theme for 2011: If you are a CEO or Head of Marketing for a luxury provider company, you need to aim higher, get more focused and work harder to target Ultra High Net Worth Consumers, particularly in the Americas and Europe.  Here I have a few top line recommendations:

– First and most importantly, clearly segment all marketing, media, sales and events opportunities for 2011 into two groups: Ultra High Net Worth or Mass Affluent /  Aspirational

– Fish where the fish are: Ultra High Net Worth consumers have the money to move your sales needle. Shift marketing and sales resources to UHNW consumers. Focus on consumers who have a Household Income of $1 million + or at least $10 million + in investible assets. These consumers have the money to return your marketing investment.

– Big Hat, No Cattle: Who still has money and who lost it? How do you find the money? A good way to find consumers who still have money today is to focus on private jet travelers and users/owners of superyachts.

The cost to fly by private jet is $5,000 to $10,000 per hour, meaning you are talking to consumers who as you are talking to them are spending $15,000 from a trip from London to Rome or $30,000 to go from Dallas to New York return. Consumers chartering super-­yachts or mega-­yachts (those vessels at least 75 feet or more) are spending when all is said and done well over $100,000 for a one week charter while owners are covering well over a $1 million is annual operating costs. By focusing your marketing, media, sales and events at these consumers, you will increase your awareness and contacts with consumers who have the money to buy your products or services.

– Create a true Ultra High Net Worth Strategy: This means not only print advertising to make sure your brand is in the consideration set and top of mind, but product and collateral placement in places such as private jet terminals, mailings and emails to private jet and yacht owners, an UHNW web strategy such as specialized microsites (think of it as an online version of the private salon), events and sponsorships in exclusive venues where UHNWs go such as Art Basel Miami, the Fort Lauderdale Boat Show and Monaco Boat Show.

– Spend extra time doing due diligence to make sure events will truly have UHNWs and not just be filled with good looking people there to drink your champagne. Make publishers or event organizers show you hard data such as Audit Statements that prove they are actually delivering your message to UHNW consumers.

– It’s the company you keep: Just as you pay attention to location of your stores and hotels, pay attention to the company your ads or sponsorships will be alongside in magazines, websites or at events.  Seeing your store on Madison Avenue or Rodeo Drive means something to consumers in a positive way, just as seeing your ad between economy cars, diet soda or three-star hotel groups will work against you.

– Consider Hiring a Director of UHNW Marketing: While many companies have armies of folks focused on web marketing, in many cases UHNW marketing means having a few excellent salespeople who are left to fend for themselves. Now is a good time to give these elite salespeople more support with targeted media, database and direct marketing support to help make sure their prospects already have your company in mind when they make contact.

Lastly, it will take a little bit more elbow grease. With the wealthy today being harder to sell, it means a comprehensive multi-­platform marketing strategy that keeps you top of mind with consumers who have money to spend means that your company will be well placed to increase your share of their spending.

All the best,

Douglas D. Gollan Group President and Editor-in-Chief

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