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Elite Traveler – ET Insider – October 24, 2006


ET Insider – October 24, 2006

Elite Traveler Insider –


October 24, 2006

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, that 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.


1. Private Jet Orders Boom Despite Fuel Prices…

2. High Net Worth Households will ensure a Soft Luxury Landing…

3. Private Jets Overrun Naples (Florida)…

4. All — Time Best in CEO Pay…

5. Vision in the Caribbean — Antonio Saladino and Why You’ll Know Him…

6. Vision in the Caribbean — Antonio Saladino and Why You’ll Know Him…

1. Simon Cooper Jets Ritz-Carlton to New Territory…

While fuel prices might be impacting commercial airlines and passengers through surcharges, it is not stopping elite travelers and companies that charter private jets to them when it comes to stocking up on more private jets to meet surging demand. Business jet orders are running as much as 100 percent ahead of last year’s near record levels.

Brazilian aircraft maker Embraer said on Wednesday it sold 60 business jets from its new Phenom line to two U.S.-based companies and one from Spain for a total of $188 million in list prices over a three-day period.

Embraer said in a statement Spain’s Wondair private flights operator had ordered 24 Phenom 100 jets and agreed an option for another 12 planes.

Earlier, Embraer said it had sold 12 Phenom 100 and four Phenom 300 business jets to Indianapolis-based Eagle Creek Aviation Services in a deal worth $61 million.

It also included an option for Eagle Creek to buy five more units that could be converted to either model.

The Phenom 100 seats four passengers and the Phenom 300 seats six. The Brazilian company has also signed an agreement to sell 20 of the Phenom 100 jets to Avantair Inc., an order worth $57 million at list prices. It will start deliveries in June 2009 to Avantair, which is based in Clearwater, Florida. The Phenom line is in the new Very Light Jet (VLJ) category where a number of companies are trying out various “air taxi” concepts and medium size corporations are finding the lower acquisition prices a good reason to finally free top executives from the wrath of domestic airline and airport woes.

Global economic growth will also stoke expansion of the business-jet market, which grew 27 percent last year, Embraer meaning the market of elite travelers continues to be the fastest growing segment of the luxury market.

2. Four Points Budget Hotel Makes Conde Nast List…

The U.S. economy is headed for a “soft landing” saved from recession by increased spending by High Net Worth families that will offset the Mass Affluent segment tightening its belt, according to The American Affluence Research Center (AARC).

AARC recently published data based on research (426 surveys) that shows that the very wealthy (a group they define as $6 million + net worth with a $529,000 median household income) are more likely than the Mass Affluent (Net Worth $800,000 to $1.5 million with a $190,700 average household income) to spend more next year than this year on a variety of products and significantly less likely to cut back.

I always find AARC’s reports interesting as the Median HHI for their Mass Affluent sample falls just a tad higher than Departures and Robb Report that have the highest HHI among Mass Affluent titles (i.e. — Town & Country, Conde Nast Traveler, Travel + Leisure, Gourmet, etc.). Conversely, the $529,000 Median HHI for AARC’s High Net Worth sample represents the lower range of Elite Traveler readership (Elite delivers approximately 430,000 readers with a Median HHI of $1.724 million). So it is always educational for me to see how the least affluent part of Elite Traveler’s readership matches up with the core readership from Mass Affluent titles.

The entire report is 129 pages and for some reason it always seems to land on my desk right before a trip with several long flights — in this case from London to Dubai. So at the expense of watching a couple in-flight movies here are some highlights:

The following are actions respondents said they will take in the next 12 months:

Cruising — High Net Worth (HNW) respondents were more than three times as likely to say they will take more cruises (24.3% to 7.7%) compared to Mass Affluent (MA) respondents Secondary Residences — HNWers are almost 400% more likely to purchase or build a second residence home or apartment (15.3% to 3.8%). The report doesn’t cover projected purchase price. Cameras and Photographic Equipment — 76% of the HNW group said they will purchase the same or more camera and photographic equipment while nearly 40% of the MAs say they will spend less Wine— Over 75% of HNWers will spend the same or more on fine wine while 33% of the MAs will cut back Designer Apparel — 82% of the HNW group plan to spend the same or more while nearly a third (32%) of MA plan to spend less. Interestingly 83% of the MA say they will spend the same or more on non-designer apparel which could perhaps be a sign of Middle Class Millionaires trading down as energy prices, higher tuitions and mortgage payments tied to higher interest rates squeeze cash flow Sporting Events and Concerts — HNWers are at least three times more likely to increase spend on tickets (16.2% to 5.1%) than MAs Golf and Skiing — 93% of HNWers say they will spend the same or more while more than a quarter (27%) of MAs plan to cut back on spending Fine Jewelry and Watches — HNWers are over 200% more likely than MAs to spend more on these two categories next year, while a whopping 39.5% of MAs project to spend less on watches and jewelry Fine Restaurants — 93% of HNWers will spend the same or more dining out at nice restaurants while 30% of the MA plan to spend less. Charitable Contributions — The HNW segment is almost twice as likely (27% – 14%) to spend more with their favorite causes next year International Travel — The HNW is about 40% more likely to spend more on travel to another country while the MA group is more than 50% more likely to spend less Domestic Travel — HNWers are 30% more likely to spend more on domestic travel in the next 12 months while the MA group is over 300% more likely to spend less Personal Computer Equipment — The HNW group is 100% more likely to spend more on these purchases than the MA

3. Airbus Sells a Private Jet A380 Version…

Fast growing elite enclave Naples, Florida has become one of the busiest private jet airports in the country, according to The Naples Municipal Airport. Not only does the airport see several hundred private jet movements per day (far exceeding commercial flights), it now has more than 480 based private jets based at the airport.

Of course, if you are flying in or out of Naples, Elite Traveler is there as one of our more than 4,000 BPA distribution points in over 90 countries worldwide.

4. Soneva Fushi Hosts British Tycoon’s Birthday…

Stock options have been the steroids behind the massive numbers CEOs of publicly traded companies have been racking up. In a recent Wall Street Journal article former American Express chairman Harvey Golub notes during his tenure from 1993 to 2000 the company’s market capitalization rose from $10 billion to $65 billion. “How much of that $55 billion should I get,” Golub asks. During his tenure he received $149 million in salary, bonuses and stock options. Upon his retirement he was granted an additional 900,000 options, however as a retired executive we don’t know how much was made off of the last part.

Interestingly, Golub’s total pay during his time as CEO doesn’t even rate cumulatively as one of the Top 10 CEO pay performances for a single year. According to The Journal, Sanford Weil, former Citigroup CEO led with three of the top 10 performances and Michael Eisner of Disney was the only other CEO to be on the list more than once (he had two of the best paydays).

Best all time was Larry Ellison of Oracle in 2001 with $706 million. Eisner was second with $575 million in 1998. He also had a $203 million payday in 1993. Lesser known Richard Fairbanks of Capital One Financial hit $249,300 in 2005 just missing the quarter billion mark!

Three time Top 10 performer Weil showed some consistency pulling in $230 million, $224 million and $167 million over a four-year period between 1997 and 2000.

Dennis Kozlowski hit $170 million in 1999 with much of it going to major luxury goods purchases from art, to brass rings for shower curtains and multi-million dollar parties at resorts. Steve Case who now owns Exclusive Resorts got $159 million in1998 for bringing the Internet to Main Street with America Online, and John Chambers who runs Cisco Systems made $157 million in 2000.

From a luxury marketing perspective, Elite Traveler is placed aboard the corporate jets of all of the above companies and over 400 major global companies like these top businesses, providing advertisers intimate exposure to major movers and shakers at 40,000 feet.

5. Lufthansa Private Jet Proves a Pleasant Surprise for the Chairman…

Tucked into the Grenadines (think all those fabulous scenes from Pirates of the Caribbean) and a mega-yachters paradise for the global elite (think Mustique — Princess Margaret, Mick Jagger, et al) is a small island called Canouan.

Today, 15 years after Antonio Saladino first flew over it, Canouan has become a five-star resort with a championship 18-hole golf course. Within 18 months, its runway extension will be able to handle any type of private jet without payload restrictions giving it a unique combination of easy access for elite travelers but the seclusion of being hard to reach by commercial transport.

On the fast growing real estate side 12 of the 26 Trump Villas plots have been sold. They go for about $3 million each.

Next are 100 Estate Villas that will sell for $8-$14 million — the first two are sold and the first — about 19,000 square feet has started construction. Once the runway has been extended construction will begin on the largest mega-yacht marina in the Southern Caribbean. Imagine jetting in from London on your GV and walking 50 yards to your 250-foot yacht, Saladino says.

In the meantime, the owner is so excited about Singapore and Toronto-based Raffles Hotels and Resorts took over management of the resort about two years ago he has convinced a friend of his who owns prime beachfront villa to convert it to a three bedroom Raffles Suite.

Most great hotels aren’t built by conglomerates, they are created by entrepreneurs so having made my first visit to Canouan in early July, I was interested in meeting Mr. Saladino as in my opinion the resort will become one of those slightly out of the way “legends of the world” such as Hayman Island, Lodge at Koele or Villa d’Este, the type of places people go for special occasions or where a mogul might takeover the place for his daughter’s wedding or his.

In fact, the inspiration for the master plan was Saladino’s own time spent at Porto Cervo in Sardinia.


For the Swiss-Italian banker who keeps his home base split between Lugano and Milan, his path to Canouan began in the 70s when he launched his own private client bank. Knowing that he would have to differentiate himself from the bigger banks like Credit Suise and UBS, he said, “if I only offered the same things they did, why would the customers come to me.”

His plan was to “offer something that wasn’t available in the market” and noting that New York real estate prices at the time were incredibly low he created ownership syndicates for income producing buildings. The product was such a hit at one point he through his syndicates owned over 60 buildings.

“The idea was putting something real (money) in the U.S. which was a safety country,” Saladino said.

As prices recovered, the buildings were sold at large profits and in the late 80s noting low real estate prices and bankruptcies in Miami, he took his buying and syndicating strategy to South Florida.

He also noticed that three trends were converging at that time: Many of his clients for his bank and syndicates were first generation wealth and had young families; the world was becoming less safe; and these very rich consumers were looking for safety when they vacationed.

Saladino saw the Caribbean as being close to North America, accessible from Europe and safe as it “is in the backyard of the United States.” However, the next part was a bit frustrating as he found in the Caribbean there was a high cost for land, particularly in well-known places. Flying one day on a scouting mission he flew over Canouan and was so impressed he came back by boat. The island had less than 200 residents, no roads, no electricity and no running water.

Saladino found some 1,200 acres of land he deemed perfect for development, including a spot for a runway. He was drawn to the island’s nice beaches, a reef that protects its main bay and its mountainous terrain giving it “special character.”

With his award-winning resort now up and running, the real estate development under way and work started on the runway, the marina is next. However, Saladino doesn’t want his legacy to end with the resort development. His final goal is to improve the living standards for the island’s residents.

6. Lufthansa Private Jet Proves a Pleasant Surprise for the Chairman…

According to The China Daily, with fast-growing wealth at their disposal, the increasing number of super-rich Chinese are bound to buy something expensive. That explains the emergence of a number of luxury goods exhibitions in Shanghai, China’s largest commercial city.

The Top Marques Shanghai 2006 Most Exclusive Luxury Show, last week at the Shanghai International Convention Centre after the city hosted at least three similar fairs one after the other this year, including Millionaire Fair, Extravaganza Shanghai and the Top Brand Show.

“Chinese are the most accommodating people in the world. They like to accept new things,” said organizer Sheng Lei, managing director of Shanghai Bopai Exhibitions Co Ltd. “This show aims to educate the rich group in what are good luxury items, as well as where and how to buy them.”

On the ground floor of the Shanghai International Convention Centre, new brand names make up almost half of the show. A limited edition Spyker sports car driven by movie star Sharon Stone in “Basic Instinct 2”; a Wiesmann Noble car, whose customers include British football icon David Beckham; and a bankers’ favorite Zitura gold watch each costing hundreds of thousands of dollars are making their official debuts in the China market at the show.

The new luxury items also include a Gibson customized guitar, an extreme edition of a Leica camera, a white diamond De Bethune watch worth US$300,000, and a Hastens bed mattress costing 800,000 yuan (US$100,000).

Loyal customers can also find such familiar brands as Ferrari, Porsche and Girard-Perregaux. And then there’s the yacht builder. One spokesman said the time between an order is placed and the boat is delivered can last one or two years. The yachts sold so far have cost between 30 million yuan (US$3.75 million) and 50 million yuan (US$6.25 million).

A salesperson of Girard-Perregaux watches told China Daily that the luxury brand has sold well in China. Pointing at a gold watch costing 1.45 million yuan (US$180,000), the salesperson said at least 50 such watches were sold this year.

According to recent research by Cap Gemini and Merrill Lynch, there are at least 236,000 US dollar millionaires living in China, based on their wealth figures from last year.

Elite Traveler is distributed at more than 25 private jet facilities and charter operators in China ensuring luxury advertisers reach to both China’s wealthiest consumers and the many elite travelers from around the world who now frequently venture to China.


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