ET Insider – April 9, 2013
More than ever private jet travelers, or elite travelers as we like to call them, are the most lucrative market for luxury brands and service providers. With readers spending $10,000 per hour to fly privately, the over 600,000 readers Elite Traveler reaches each issue provide you a great way to make sure your message is in front of consumers who have the money to be good customers. With our Asia Edition, Elite Traveler Superyachts, our over 60 Elite Traveler Destination Guides at Elitetraveler.com, our global database of private jet owners and our award-winning custom marketing team, we would welcome the opportunity to be of help to you in making sure you get a bigger share of our reader spending.
With a Net Worth of more than $25 trillion, I hope you will agree elite travelers should be a key target for your marketing!
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In this edition:
1. NY Times: Global UHNWs Travel and Buy, Buy, Buy
2. The $35,000 Home Movies
3. Hiring Slows as Mass Affluent Stay on Edge
4. Companies Cut Back on Business Travel Expense
5. Toronto Star interviews Plutocrats Author – The UHNWs are global
6. New Research Shows Mass Affluent “Least Satisfied” With Finances
1. NYTimes: Global UHNWs Travel the World and Buy, Buy, Buy…
A Recently The New York Times spotlighted the UHNW Global Elite Travelers as they hop and skip around the world on their private jets spending lots of money.
As these elite travelers seek to buy property, The New York Times noted, “global wealthy are facing stiffer competition from one another. Russians seemed to be everywhere scouring for trophy properties in 2012. They are facing increasing competition from Asian buyers, especially from China and Hong Kong, as well as from Latin America.”
In the spotlight: “Vladislav Doronin, the Moscow-based real estate developer who dates the model Naomi Campbell, has spent more than $20 million to renovate a home on Star Island in Miami. He also has homes on the Spanish island of Ibiza, at the Time Warner Center in Manhattan, and at One Hyde Park in London; the latter two have become billionaire dens.”
In addition to paying top dollar to be in global capitals, The New York Times noted UHNW elite travelers also like a deal: “European cities previously thought to be too economically distressed: Milan, Madrid, Barcelona and Dublin, which will join Munich, Berlin, Zurich, Geneva and Vienna as “core European targets.”
Need a Loan? Not if you’re an elite traveler, according to The New York Times: “‘Cash is king. Buyers paid cash in every deal over $20 million brokered last year by Hilton & Hyland Real Estate in Beverly Hills, Calif., which saw a 64 percent increase in year-on-year sales volume, to $1.8 billion, from $1.1 billion in 2011,’ said Jeffrey Hyland, a co-owner.
“Banks in New York, at least, have begun to lend more for construction financing. But credit for home purchases remains tight in the broader United States real estate market.
“‘Lenders are still afraid of their own shadow,'” said Jonathan J. Miller, the president of Miller Samuel, a New York appraisal company. ‘Credit standards are just as tight’ as they were after the collapse of Lehman Brothers in 2008.
Yet credit remains an afterthought in the world’s most expensive property markets, which continue to soar and show no signs of tiring.”
“Elite Traveler is a key media source for us with well over $200,000 in sales we can track directly back to our ads in your magazine over the past year.” – Charles Krypell, Owner, Charles Krypell
2. The $35,000 Home Movies
Don’t want to wait in line when that hit movie opens? As everyone knows, private jets are all about making life easier. That’s why I truly believe there is a market for Prima Cinema.
According to an article in The Telegraph, “Prima Cinema has teamed with Hollywood studio Universal to offer the new service, which is targeted at super-rich film stars and other celebrities. The $35,000 price tag covers a digital box allowing movies to be delivered via the internet: once downloaded, they can be viewed just once at a cost of $500. Prima inspects every client’s home cinema to ensure there are no more than 25 seats, so the service cannot be used to set up a commercial cinema business.”
According to the report, “Universal is the only major studio currently offering its movies via Prima, but it is hoped others will follow suit if the service is found to be commercially viable.
Upcoming films which will be available to view at home on the same day as their US cinema release include the Tom Cruise sci-fi thriller Oblivion as well as past titles such as Les Misérables, Identity Thief and Admission.”
“This is not Netflix,” CEO Jason Pang told the Hollywood Reporter. “This is an event.” He added: “Prima is what private jets are to aviation.”
The service is currently being rolled out in Southern California, New York and Florida.
“From the Summer Edition of Elite Traveler Superyachts, as well as the Asia Edition including the May/June issue we are happy to report sales ($437,000) of the timekeepers we advertised” – Patrik Hoffmann, CEO Ulysse Nardin
3. Hiring Slows as Mass Affluent Stay on Edge…
According to CNN, “Hiring was much slower than expected in March, with the U.S. economy adding 88,000 jobs. The jobless rate fell to 7.6% from 7.7 as nearly 500,000 out of work Americans gave up on looking for work. Analysts had expected about 200,000 jobs to be added.
ONLY ELITE TRAVELER – Elite Traveler is the ONLY global publication targeting and reaching private jet travelers to have its circulation successfully audited.
4. …While Companies Clamp Down on Business Travel
According to recent report by the IATA (International Air Transport Association), premium travel (business and first class) slowed in January by 3.3 per cent year-on-year and in December was down 4.5 per cent. At the same time, economy class passenger numbers were up 2.9 per cent in January year-on-year, also a slowdown on December growth of 4.2 per cent. According to CPP Business Traveler, the downgrade also carried over to hotels where more companies specified employees should not stay in five star hotels but four and three star.
“Again this year Elite Traveler continues to be our #1 source for reservations generating close to $1 million in bookings from your readership of private jet travelers” – Sean Emmerton, Villas del Mar
5. Toronto Star interviews Plutocrats Author – The UHNWs are Global
Award-wining author Chrystia Freeland recently talked to the Toronto Star about her book Plutocrats, a must read for luxury marketers. Following is an excerpt from the interview:
Q: And its first loyalty is to acquiring and expanding wealth.
A: .By the nature of their business and their lives today they are inevitably pulled into a globalized world. They have much less connection and fewer ties to their national community. And their rewards are in the global world.
Q: Like Cyprus, where international money goes to hide from the national tax man.
A: Business has slipped the traces of national government. One way to think about it is the collective realization that you are no longer a captive of a nation state.
Q: You’ve focused on the richest 0.1 per cent. What did you discover about them?
A: One of my favourite anecdotes was from a private equity guy who said that Beijing and
New York look a lot alike: same restaurants, same people. He said it with genuine sentiment. If you put an ordinary person on the street for five minutes they won’t be confused. But for people in this space, those cities really are similar. It’s a disconnect that shapes their world view and their politics. Not just in subtle ways.
There’s also a disconnect of economic interests – Henry Ford said that you need to pay workers enough to buy your cars. That was the deal of post war America. The core idea was that the middle class needed to prosper because they were the consumers your business depended on. Now there are other markets.
“Recently we had an American customer who walked in with a copy of Elite Traveler and booked two suites that been directly featured in the magazine. The value of the booking was in the region of $200,000.” – Tony Potter, Corinthia Hotels
6. New Research Shows Mass Affluent “Least Satisfied” With Finances
Bob Shulman is a legend in Mass Affluent research for years, guiding the Monroe Mendelsohn Ipsos Affluent Survey. He has now launched the Shulman Research Center looking at groups from with annual household incomes of $75,000 to $150,000, $150,000 to $250,000 (2-10 percent), $250,000 to $500,000 (the 2nd percent) and $500,000 +, the starting point to be in the famed “1 percent.”
Interestingly, in an interview with Susan Kime, he notes while the Mass Affluent are the optimistic about the economy, they are the most negative about their own financial situation. This could speak a lot about how ‘consumer confidence’ numbers pop up from time to time but spending stagnates with the mass affluent:
Optimism/pessimism about the economy:
• The most optimistic was the “average” population at 37% whose median HHI is about $51,000. The next most optimistic at 34% were the HHIs at $250,000 plus
• The most pessimistic was the $500,000 plus
Satisfied with their own financial situations:
• The $500,000 plus were most satisfied – 80%
• The least satisfied were the Mass Affluent at 27%
How these groups foresee their personal financial situation 12 months from now:
• With the $500,000 plus HHIs – 80% will definitely or most likely feel they will be better off 12 months from now
• Conversely, those whose HHI is at the $250,000 plus range – only 30% feel they will be better off
According to Kime, “Forecasted spending assuming the economy improves-with all the groups, in general will spend about the same-the range no matter the HHI amounts range from 53% to 60%, which means that most of those surveyed will, in general, not spend a whole lot more or less assuming the economy improves.”