ET Insider – September 23, 2008

Elite Traveler Insider –

September 23, 2008

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.

CONTENTS:

1. Who’s Super Rich Today? Look Up in the Sky; They’re in Their Private Jets that Keep Getting Bigger

2. Trading Down? Not For the Private Jet Super Rich

3. In Pittsburgh, Corporate Air Enjoys 30% Growth

4. Elite Traveler, elitetraveler.com and Luxus Networks Target Super Rich

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. Who’s Super Rich Today? Look Up in the Sky; They’re in Their Private Jets that Keep Getting Bigger

Lehman Brothers, Bear Sterns, AIG, Fannie Mae, Freddie Mac and according to financier Wilbur Ross, perhaps a thousand other banks may go under. The “Middle Class Millionaire” with, say, $5 or $10 million in assets is either hunkered down, or if they were in the market, may now be worth only hundreds of thousands of dollars.

The latest research by MMR shows no publication with a Median Household Income above a paltry $215,000 pre-tax. So as adman Peter Warren told me, “The Aspirationals have become the Desperationals.”

So let’s look at those lucky folks tooling around in their private jets. While some jet operators are reporting increases in private jet travel as much as 30 percent, the consensus is that private jet travel is flat to down by 10 percent, with much of the hit coming in the corporate travel market.

The people who are today flying by private jet are the best, and should be without doubt the main focus of marketing campaigns by luxury brands.

Two key points:

• Consumers flying on private jets as we speak have the financial power to spend $5,000 to $10,000 per hour to fly privately; in other words, they see the value in spending at least $30,000 for a round trip from New York to Florida compared to $400 on JetBlue.

 

• Consumers who fly by private jet have what I consider the ultimate and key psychographic characteristic luxury brands need to target: They not only have the money, they still feel confident enough to spend the money. In other words, they are not hunkered down in the Park Avenue apartment; these elite travelers are jetting around and continuing to live the private jet lifestyle.

 

The ultimate question as brands look at marketing expenses is, “Do we just keep doing what we did?” or “Do we start with a blank piece of paper knowing the world has changed?” In my mind, those folks who take a fresh approach and shoot up-market to the private jet traveler have the best chance of gaining sales ground.

Don’t forget to search for your brand at www.elitetraveler.com/business. Forward the links to your clients and customers, and post it on your own site’s press room. If you have a press release or a new product you’d like us to feature, send it to me at douggollan@aol.com and we’ll post it for you!

2. Trading Down? Not For the Private Jet Super Rich

From The Times of London:

“Prince Alwaleed bin Talal’s private Boeing 747 cast a shadow over the ranks of Gulfstream VIs and Learjets as it taxied along the runway at Dubai International airport and hissed to a halt. The Saudi tycoon had just flown in from his home in Riyadh to enjoy the city’s air show. But Alwaleed was not a spectator. He stepped out and crossed the tarmac to an even larger aircraft, the double-decker Airbus A380. He climbed the three-storey-high steps and, after being shown round, signed on the dotted line to buy one of his own. The price? £150m, plus another £150m to convert the interior to his signature no-embellishment-is-an-embarrassment taste.

Dropping £300m in a few minutes is, by any standards, an exotically exorbitant demonstration of immense personal disposable wealth. The sky-high price tag is more than 10,000 times the annual household income of an “average” British family. Such extravagance used to be limited to emperors and the odd kleptocrat, but a new class – the super-affluent – is emerging. They are unaffected by the credit crunch, which they loftily dismiss as “some new breakfast cereal”.While most of us are tightening our belts, they are planning to increase spending, taking advantage of the falling price of everything from property to private jets.

About 80% of those worth £50m or more plan to spend more this year, according to a survey by the US-based wealth analysts Prince & Associates.

Take Alwaleed. The small fortune he dropped on the Airbus is, it turns out, pocket change. The 53-year-old recently bought the Savoy hotel in London for £250m and is spending a further £100m giving the grande dame of the Thames the kind of makeover that would make Demi Moore blush. He is also doing up his other favourite five-star bolt holes, the George V in Paris and the Plaza in New York. But there’s no place like home. His £500m palace in Riyadh is constantly being remodelled and enlarged.

At the last count it had 317 rooms, including 20 kitchens that can cater for up to 1,000 people.

But even that is not enough. He is splashing a stratospheric £5 billion (five is his lucky number) on a new way to join the mile-high club: building the world’s tallest skyscraper, in Jeddah, in which he will have an office and an apartment. Alwaleed is one of around 1,200 free-spending multi-billionaires, most of whom have attained their gilded status in the past decade. The number of billionaires is growing by almost 20% a year, according to Forbes magazine, the US periodical that quantifies and chronicles global wealth creation. There were 476 billionaires in 2003 and 946 last year, since when a further 179 have joined the ranks. The richest 50 are now worth £723.4 billion, a 22.6% increase on one year ago. To put this liquidity boom into perspective, John D Rockefeller’s steel and railroad fortune of £500m, which many analysts thought would never be topped in real terms, would be worth £7 billion in today’s money – barely enough to get into the Forbes Top 10. The richest man in the world, Warren Buffett, has a net worth of almost £62 billion.

The spending habits of the super-affluent now dwarf those of entire nations – and not just the poor ones. In the US the richest 0.5% of the population spends £75 billion a year – equal to total household expenditure in Italy.

No wonder Steve Forbes, Forbes’s veteran publisher, says the rich have never had it so good. “These are the richest years in human history,” he says. London plays a key role in the rise of this superclass. Thanks to its low taxation, convenient time zone and financial-services expertise, it has become the capital of footloose international wealth, personified by its richest residents: Lakshmi Mittal, the Indian steel mogul, who is worth £27.7 billion, and Roman Abramovich, the Russian oligarch, whose personal fortune stands at £12 billion. London boasts 36 resident billionaires, all eager to find lifestyle options that fit like a second skin and communicate their new-found status.

Robert Frank, the author of Richistan, the definitive study of the lives of the new rich, says: “Never before have the new wealthy spent so much in established old money cities like New York and London.”

How have so many got so rich, so fast? Who are the richest of the rich, what are they buying, and why? The groundwork was laid in the past two decades, with the triumph of the market and the collapse of old command-style economies; the spread of transformative new technology, notably the internet; and globalisation, which has increased competition but also the spoils for the economic winners. But it is the booming financial markets of the past decade, record oil and gas prices, and the fizzing growth in the Bric economies – Brazil, Russia, India and China, which are growing by up to 10% a year, minting multimillionaires by the day – that have generated the tidal wave of new money in new hands.

The fast-growing Gulf states have enjoyed the most dramatic rise in wealth and spending power. Barclays Wealth Report says there has been “a seismic shift in the location of wealth around the world [and] the term ’emerging markets’ will be redundant in 10 years’ time”. With oil reaching a peak of $150 a barrel recently, up from less than $60 a decade ago, Gulf gazillionaires are desperate to spend. So desperate, in fact, that they are trying to buy things that it is impossible to price and may even turn out to be impossible to buy.

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. In Pittsburgh, Corporate Air Enjoys 30% Growth

US Airways has cut back service to the Steel City, and that has been good news for the private jet industry here as Pittsburgh’s Super Rich are more and more stepping onto private jets.

Corporate Air, West Mifflin, maintains about 20 jets that fly corporate executives, movie stars and other wealthy folks from Allegheny County Airport to thousands of airports, large and small. Its top destination is New York, then places such as Florida and Las Vegas, and even Beijing for the summer Olympics.

Through August, its planes logged 30 percent more flights hours than the year earlier.

Elite Traveler’s BPA audited circulation aboard private jets and mega-yachts in over 100 countries means your ad is guaranteed to reach the highest spending luxury audience in the world no matter where they are from and where they happen to be today – each issue is read by 318,000 readers with a Household Income of $1 million +, the highest of any magazine or newspaper in the world! Sources: 2007 Prince ET/MMR for others

4. Elite Traveler, elitetraveler.com and Luxus Networks Target Super Rich

Every media salesperson says their readers are affluent, yet the latest independent, syndicated research by MMR shows if you want to reach the Super Rich these magazines just don’t deliver. Witness:

Departures 46,000 / $211,000 Forbes 45,000 / $162,000 Robb Report 29,000 / $196,000 Vanity Fair 62,000 / $153,000 Town & Country 39,000 / $156,000 Conde Nast Traveler 55,000 / $158,000 W 15,000 / $159,000 GQ 24,000 / $157,000 Details 9,000 / $161,000 Harper’s Bazaar 19,000 /$154,000

By contrast, the latest research from Prince & Associates, acknowledged by The Wall Street Journal as one of the country’s foremost researchers on the Super Rich, shows Elite Traveler delivers to luxury advertisers 318,478 readers every issue who make $1 million + with a Median Household Income of $2,280,960, more than 10 times higher than any other magazine!

Moreover, with this crazy economy, you are assured the consumers who see your ad as they fly by private jet still have money and still are spending!

Don’t forget to search for your brand at www.elitetraveler.com/business. Forward the links to your clients and customers, and post it on your own site’s press room. If you have a press release or a new product you’d like us to feature, send it to me at douggollan@aol.com and we’ll post it for you!