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Elite Traveler – ET Insider – October 13, 2009

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ET Insider – October 13, 2009

Elite Traveler Insider –

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October 13, 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. Before You Get Too Excited, Read This

2. How Did We Spend Our Summer? Helping Sell Your Products and Services?

3. Get to the Podium in Vancouver

4. I Like Your Magazine, But Where Does It Go Again?

5. Danziger/Unity Marketing Predict Soft Holiday Spending by Mass Affluent

6. AMEX Publishing Survey Shows Readers Cutting Back

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. Before You Get Too Excited, Read This

Like most everyone, I am looking forward to a recovery. Yes, slow perhaps, but at least some good news. That said, after a two week trip I went back to my stack of unread Wall Street Journals and quickly flipped through the headlines to see if there was anything that caught my eye.

The front page of the September 21 “Money & Investing” section did the trick. The headline blared: “As Dow Nears 10,000, Some See Bears Ahead.” The main focus of the story was that the current rally – one of the six strongest ever, is really not in the type of company most of us who run businesses want to see. The other “Top 5” came in November 1929, July 1932, February 1933, March 1938 and December 1974. In other words, while nobody has a crystal ball, the strong rally of the past six months can’t be taken as a sign that we are out of the woods. So what does that mean for luxury brands as you continue your planning and forecasting for 2010? I think there are four key points that should be part of any discussion:

  • Combined with the still sluggish employment market, it is likely consumer confidence, and thus propensity to spend of the U.S. and European Mass Affluent Market (Consumers in Households with a HHI of $100,000 to $400,000) is going to continue to be dampened. With a major driver for sales success in disarray, where can you find 2010/2011 customers?
  • The Consumer as the Chief Financial Officer: Blackrock’s Larry Fink, in the September 21 issue of BusinessWeek believes consumer confidence is still being hurt by the feeling they are being gamed. “I believe we need a system in which we protect our citizens so they feel they’re not being misled.” Mass Affluent Consumers who were burned by overextending themselves are now seeing products they paid a lot of money for being discounted to levels way below what they spent on similar products over the past five years. The impact will likely be a slower return to the credit card craze as consumers become more discerning on what they really need to buy. In other words, expect for the next 12-18 months consumers who are more conservative and more focused on managing expenses vs. their personal revenue.
  • Focus on Consumers Who Can Buy: No longer is building awareness against Aspirational consumers a core strategy. As luxury companies battles for sales in the next 24 months, the Number One qualifier will be, “are the people I am talking to people who can buy?” Media, Events and Partnerships where the answer isn’t a full Yes are going to be under enormous scrutiny.
  • Even the Super Rich are re-evaluating Luxury Purchases. Prince & Associates’ research of private jet owners shows Uber Rich Consumers continue to purchase “For themselves” while previously high motivator “To impress others” has fallen like a rock. For luxury marketers this means they are going to have to spend much more time, resources and attention educating and wooing the Ultra Rich on why they should want their products. Having others see you tooling around in a Bentley is no longer enough. In other words, the money is there, it is going to just take more work and a more aggressive marketing and sales effort.

Only Elite Traveler can guarantee you that your ad dollars are reaching wealthy consumers who are still spending. What do we mean? Our new 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.

2. How Did We Spend Our Summer? Helping Sell Your Products and Services?

Who said the economy is bad? Here are just a few of the things our readers from Elite Traveler and Elitetraveler.com picked up over the summer:

  • Mr. S. A. of Jal El Dib, Lebanon, spent $38,000 on an Audemars Piguet Offshore Rose Gold Watch. He also purchased a Royal Oak Offshore Special Edition and a 4-carat diamond ring.
  • Ms. J. K. of Winter Park, FL spent $15,000 on a diamond ring at Bailey Banks and Biddle and $1,000 on a necklace from Roberto Coin.
  • Ms. J. C. of Marco Island, FL spent $3,000 on a recent stay at the Breakers Palm Beach.
  • Mr. B. C. of Racine, WI spent $5,400 on a Breitling Emergency watch.
  • Mr. J. P. of Dallas, TX spent $2,500 on Brioni ties.
  • Mr. S. B. of the Netherlands spent 10,000 Euros on a flight with Cathay Pacific.
  • Mr. E. H. of Turkey spent $25,000 on a Dewitt Academia Seconde Retrograde Serenity watch.
  • Mr. F. T. of Richmond, TX spent $3,800 on an Ernst Benz ChronoFlite World Timer.
  • Ms. N. B. of Pasadena, CA spent $24,000 on Four Seasons Hotels and Resorts.
  • Ms. M. D. of East Hampton, NY spent $4,000 on a Judith Ripka diamond pendant.
  • Ms. D. B. of Miami, FL spent $6,200 on a pair of Judith Ripka diamond earrings.
  • Mr. J. L. of St. Louis, MO spent $11,000 on a first class trip on board Lufthansa.
  • Ms. T. D. of New York, NY spent $50,000 on a Mercedes C300 4Matic.
  • Ms. K. H. of Arlington, VA spent $5,000 on a stay at One&Only Paradise Island.
  • Mr. V. L. of Sunnyvale, CA spent $90,000 on a Range Rover Sport.
  • Mr. D. G. of West New York, NJ spent $20,000 on a Roger Dubuis watch.
  • Ms. L. M. of Miami Shores, FL spent $1,800 at the Rosewood Aqualina Resort.
  • Mr. Y. G. of New Delhi, India spent $4,700 on a Stefano Ricci jacket.
  • Mr. C. K. of San Diego, CA spent $5,000 on Stefano Ricci shirts and shoes.
  • Mr. P. C. of North Muskegon, MI spent $1,100 on a Stefano Ricci shirt and 2 ties.
  • Mr. G. L. of Falls Church, VA spent $20,000 on Stefano Ricci menswear.
  • Mr. F. B. of New York, NY spent $7,000 on a Tiffany Eternity platinum diamond band.
  • Mr. J. F. of Manhasset, NY spent $7,000 on a Van Cleef & Arpels Alhambra 6 motif necklace.
  • Mr. M. H. of Azerbaijan spent $5,600 on a Vertu phone.

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. Get to The Podium in Vancouver

What do you do when there are so many C-Level executives, VVIPs, Celebrities, Stars, Ultra Affluent Consumers and their families arriving and departing by private jet over a very concentrated time?

In the case of the upcoming Olympics in Vancouver this February we are converting a hangar at the Million Air FBO at Vancouver International Airport to a luxury lounge to accommodate the more than 10,000 folks who will arrive and depart using this facility. Because of heightened security and such, passengers are expected to be in the facility for at least an hour on both arrival and departure providing a unique captured audience.

Knowing in the current economy, many of you are looking more than ever to be 1-on-1 with consumers who can buy your products and services, particularly when they are in a good mood. We have created a limited number of unique sponsorships around this event. At the link below is a full overview of what we will be doing and what the opportunities are for partners. Additionally, there will be a number of signage opportunities both for the walls inside the lounge (that are 100 feet high) and outside (on the hangar door and driveway to the FBO) where every passenger will get massive exposure to your message.

Sponsorship and Program Details

Only Elite Traveler can guarantee you that your ad dollars are reaching wealthy consumers who are still spending. What do we mean? Our new 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. I Like Your Magazine, But Where Does It Go Again?

One thing the world probably doesn’t need more of is glossy magazines. While I am many times impressed with the quality of various magazines, the paper, layout and design, as a Publisher, my immediate next question is who is actually getting the publication. Now every publisher worth a salt has the right answer: “Wealthy and Influential Consumers.” But the proof is in the pudding, or in the case of magazine publishers, in their ABC or BPA Circulation Statement. As I have mentioned previously, the cost to have one’s magazine audited is less than $10,000 per year, so any publisher that does not have an audit statement in my mind is open to significant scrutiny in terms of where the publication actually goes and how many copies are being printed and distributed.

The next question Marketers should and would want to know is where it is being distributed. Lots of folks read magazines because they like cars, watches, fashion or travel, but they don’t have the financial resources to actually buy what they are reading about.

Knowing that your next best customer can come from anywhere in the world and being affluent can be traveling anywhere, Elite Traveler has invested in worldwide circulation in over 100 countries so wherever in the world that important person is and wherever they happen to be, your ad in Elite Traveler will reach them. Then, in what is probably the most significant innovation a publisher has made to provide advertisers with the most detailed information, I am proud that we provide a full break-out of our distribution on our Circulation Statement so you can see where copies of Elite Traveler are placed. In a period where you want to make sure your ad dollars are reaching consumers who can buy your product, our ability to prove to you where our magazine is going means you know your dollars are reaching a market that contains top customers who are traveling and spending on luxury. Next time you have a media rep in front of you, ask them to show you their Circulation Statement!

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!

5. Danziger/Unity Marketing Predict Soft Holiday Spending by Mass Affluent

According to Unity Marketing, a research and consultancy that specializes in Mass Affluent consumers (Household Income under $400,000), for the second year in a row, retailers face a holiday shopping season marked by cautious shoppers who will be slow starters when it comes to gift purchases and intent on bargains. In a recent statement, the company said, Americans across all income levels are on edge about the security of their jobs, as the nation’s unemployment rate approaches 10 percent. People will opt to save, rather than spend this holiday season.

For Christmas 2009 shoppers are putting the brakes on spending by cutting their gift lists and buying gift items that people really need. Even among the Mass Affluent (people with incomes at the top 2-20 percent of U.S. households), Unity Marketing’s latest survey found that nearly 40 percent expect to spend less on holiday gifts this year as compared to last year, and 50 percent expect to spend about the same.

“The underlying psychology of shoppers has shifted away from extravagant, generous spending toward a frugal approach and that change in shopper psychology has shifted the future of the retail sector,” according to Unity.

According to Danziger, embattled retailers are making adjustments to stay the course as sales drag. A recent Hay Group survey among 25 top national retailers found that inventory and staffing levels are down relative to last year. Fully 64 percent of the retailers surveyed said that they have lower than normal staffing levels. For shoppers, this will translate into less attentive service and longer lines; for retailers, this will mean missed opportunities and lost sales, when they need those sales the most. It also means that luxury brands are going to have to be more focused on their best prospects, the Ultra Affluent consumers who still have the money to spend and are also not in a trading down mode.

Only Elite Traveler can guarantee you that your ad dollars are reaching wealthy consumers who are still spending. What do we mean? Our new 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.

6. AMEX Publishing Survey Shows Readers Cutting Back

A recent piece in The Wall Street Journal outlined some research done in September by The Harrison Group for American Express Publishing that shows the pain even at the upper tier their Mass Affluent consumers. The conclusion was contributions by those surveyed to the luxury industry are still in a free fall on a year over year basis:

“According to a September poll by Harrison Group done for American Express Publishing, consumers with discretionary incomes of more than $250,000 are planning to cut their holiday spending to an average of $3,269 from $4,135 last year.

This is a bad sign not just for the bling business but also for the economy as a whole, since the people with money are supposed to lead the way out.

More than half of respondents with $100,000 or more in discretionary income said the reason for spending less is “we are living more responsibly.” Fewer than a third said they would splurge on a gift for their spouses or children this holiday season.”

The survey says 42% of those with $100,000 or more feel guilty buying luxury in the current economic climate. Most say the recession has changed their spending priorities.

This could be taken as a sign that the new normal doesn’t involve as many $20,000 handbags or $300,000 watches that don’t tell time,” wrote The Journal’s Frank.

Of course the point that the Harrison survey and Frank miss in my opinion is that the Mass Affluent group was never buying to any large degree the $20,000 handbag or the $300,000 watch. These types of products were out of their range.

Very early this year Prince & Associates did what I believe is the definitive research on the Ultra Rich interviewing 108 owners of private jets. The bottom line: They were still buying but their motivations were different. They were more focused on pleasing themselves than showing off to other people, meaning that marketers needed to craft a different message. Prince titled his report “The Renaissance of Luxury” to underscore that at the top of the pyramid there were few tears; it was a bit easier for them to get through the ground floor at Tiffany on the way to the fine jewelry section; luxury hotels were less crowded over the holidays. His message was simple, and the spending figures backed it up: successful purveyors of luxury were going to have to put their focus back on the heavy user, the true core customer.

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.

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