Elite Traveler – ET Insider – October 4, 2011
ET Insider – October 4, 2011
Elite Traveler Insider –
October 4, 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. The FT: Super Rich Boost Tiffany’s Sales, Profit
Luxury brands are getting focused on UHNW consumers according to The Financial Times: “Against a backdrop of a weak economy, the performance of US retailers has diverged sharply: middle market stores are suffering, while businesses offering discounted basics or luxury products thrive.”
According to The FT, Tiffany record gains were the result of more UHNW customers spending more money: “[Tiffany CEO] Mr. Kowalski knocks down the common assumption that Tiffany’s US growth comes from middle-income consumers who are saving money at dollar stores so they can buy silver trinkets such as $125 key rings. Instead, as economic polarization grows, Tiffany’s success is built on an increasingly concentrated group of high-spending wealthy Americans.”
“The slower-growing product categories are clustered around lower price points … Predominantly silver jewelry at entry level price points,” Mr. Kowalski says.
“Conversely, higher price point products with high diamond content are the fastest-growing, so you do see that income dichotomy reflected in the relative strength in our product categories.”
“Jewelry’s share of sales – including diamond rings that can cost more than the average annual US household income of $49,445 – has risen from 70-75 per cent to 91 per cent.”
============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY publication targeting and reaching private jet travelers to have its circulation successfully audited. View our BPA statement here. ============================================================
2. Companies Clamp Down On Business Travel
Travel suppliers from hotels to airlines offering premium class international service are going to have to fight harder for top end customers and revenue as more companies are tightening up on business travel expenses below the Owner, Chairman and CEO level, according to a new survey.
According to a trade report, business travel management company Travel Leaders’ latest business travel survey finds that most corporate clients are “somewhat strict” about enforcing travel policies.
Over 80 percent of the business travel agents polled said client companies were Very/Somewhat Strict in enforcing travel policies and looking for lowest cost providers. More than half said they had recently tightened their oversight on travel policy.
============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY publication in the world delivering 400,000+ readers with a Household Income of $1 million + ============================================================
3. Luxury Daily: Tips To Respond To A Recession, Dead Economy
Recently, trade newsletter Luxury Daily did a roundup of various luxury experts asking their recommendations on responding to another recession and continued economic turmoil.
Here are some highlights:
“The key word is react, which is not the same as overreact,” said Al Ries, chairman of marketing consultancy Ries & Ries, Roswell, GA. “Many luxury brands are overreacting to the recession by running sales and launching inexpensive versions of their expensive products. A luxury brand should never, ever change its high-end position,” he said. “That’s what made it successful in the first place. A luxury brand needs to keep its current position and wait for the economy to improve.”
According to Pam Danziger, president of mass affluent researcher Unity Marketing, “luxury brands need to take the potential of a new recession or double-dip of the old one, very, very seriously. Many companies got caught short the last time, thinking that their business was immune or their customers would not be impacted. When it comes to luxury, nobody needs any of it and because of that it is the easiest place for people to cut back when times are uncertain. I believe we are headed back into this same recessionary mindset among luxury consumers. Unity Marketing’s Luxury Consumption Index (LCI) took the sharpest downturn in the third quarter that we have seen since the lead-up to the recession in 2008.”
Ron Kurtz, principal of American Affluence Research Center, Atlanta recommends, “[Brands should] give priority marketing to the consumers who can easily afford and appreciate their products. For true luxury brands, this usually means targeting the wealthiest 1 million households, net worth of $6 million or more per Federal Reserve Board data.”
Milton Pedraza, CEO of the Luxury Institute, New York urges, “During the recession, luxury brands should focus on customer retention, especially the 20 percent that account for 70 percent of the sales.
Chris Ramey, president of Affluent Insights, Miami recommended, “True luxury brands should be promoting. The affluent, particularly the top 1 to 2 percent, are still spending money. This is not a time to withdraw from the market.”
Shenan Reed, chief creative officer at Morpheus Media, a Createthe Group company, says “…the top end of the luxury consumer is not affected…They still have money to spend and they are used to a certain level of quality and service and so therefore will continue to spend…recessionary times are traditionally great times for brands to gain market share as the natural reaction for companies is to pull back on marketing and advertising. Historically, brands that have spent more during recessions have gained significant market share.”
By delivering over 400,000 readers every issue who have a Household Income of $1 million +, Elite Traveler gives luxury marketers more reach to UHNW consumers than any other media in the world.
============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY publication targeting private jet travelers with an independent editorial and design team, original photography, award-winning editors, designers and photographers. ============================================================
4. In Canada, The Rich Grow Richer
The Winnipeg Free Press recently noted, “The U.S. may lead the income inequality parade among major industrialized countries, but the gap between rich and poor is growing faster in Canada than in the U.S., the Conference Board of Canada says.”
“The main story here is that the bulk of the wealth that has been created in the past 22 years…33 percent of that has gone to the top one per cent,” Conference Board CEO Anne Golden says.
Canada’s median income – half of the population earning above it and half below – rose a meager $2,500, from $45,800 to $48,300, over the 33 years between 1976 and 2009, the board report says. “Moreover, the gap between average and median income has been growing… The growing gap signals that income growth is distributed unequally.”
Unlike most other magazines where buying the U.S. edition means you don’t reach Canadian consumers, Elite Traveler delivers over 4,000 copies to Canada, reaching Canada’s high-spending private jet setters as they plan their next luxury purchases.
ONLY ELITE TRAVELER – Elite Traveler is the ONLY publication that delivers UHNW consumers on private jets from more than 100 countries with a single ad. ============================================================
5. WSJ’s Robert Frank: Super Rich Get Richer
In his Wealth Blog for The Wall Street Journal, Robert Frank again sorted through some key data for luxury marketers who are after “heavy users” of luxury products and services:
According to The Economic Policy Institute using data from NYU Economist Ed Wolf between 1983 and 2009 the top 1% gained 40% of the nation’s total wealth gain.
============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY publication that makes sure your ad message gets your best customers and prospects no matter where they travel — on their private jets. ============================================================
6. It’s a Global Boom Market For Superyachts
After a decade of success as the private jet lifestyle magazine, in the past year we have launched Elite Traveler Superyachts, tracking the superyacht lifestyle, and of course our highly successful Asia Edition of Elite Traveler.
According to a recent AP report from the Monaco Yacht Show, our timing couldn’t have been better. The piece noted “Russian oligarchs and their floating palaces helped keep the luxury yachting industry buoyant through the crisis (Elite Traveler’s Global edition delivers over 1,000 copies to megayachts according to our latest BPA audit), but super-rich buyers from China (read Elite Traveler Asia and our 40,000 readers!) and Brazil (942 copies as they jet around) are rushing to join them on the waves.
The AP report stated, “Emerging market billionaires are showing a keen interest in superyachts, according to pundits at this year’s Monaco Yacht Show, the prestigious four-day global yacht gathering.”
“The BRIC — Brazil, Russia, India and China — nations are much more active than they were three to four years ago,” Ellie Brade, Pacific editor at the Superyacht Group monthly magazine told AFP.
China now has 115 billionaires, without counting Hong Kong, according to the Forbes rich list, second only to the United States and ahead of Russia’s 101.
“Right now there is a significant and growing demand amongst wealthy Asian people, and in particular, the Chinese, to properly enjoy yachting,” said Olivier Besson, managing director of YPI Asia, an Asian joint venture run by Monaco superyacht firm YPI.
“The Russians are still the biggest clients amongst the BRIC countries, but the Chinese are potentially very big clients,” he said. In April, YPI Asia sent a 65-metre Azimut-Benetti superyacht, Ambrosia, to the Hainan yacht show, the largest megayacht ever seen in local waters. Another reason for the boom: there are “more opportunities for people to operate yachts in these regions,” Brade said.
But the lack of infrastructure that long held back the yachting market is changing, experts said, with a string of marina projects underway along China’s shores, including a superyacht facility in Tianjin near Beijing. Meanwhile on the Latin American market (again, you get this market with your Elite Traveler Global Edition buy!), leading Italian yacht builder Azimut Benetti has seen its Brazilian sales soar 45 percent over the past five years, the firm’s sales and marketing manager Stefano de Vivo told AFP.
============================================================ ONLY ELITE TRAVELER – Elite Traveler is the ONLY publication targeting and reaching private jet travelers to have its circulation successfully audited. View our BPA statement here ============================================================
All the best,
Douglas D. Gollan Group President and Editor-in-Chief