ET Insider – June 11, 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!
In this edition:1. Forbes: Eight Trends in Private Jet Travel2. Huff Post: Super Rich Putting More Money Off-Shore3. Art Basel = Private Jets4. Indonesia Launches First Super Yacht Show5. Britain’s Super Rich Double6. Flexjet Sees Wild Increase in Demand
1. Forbes: Eight Trends in Private Jet Travel
From Forbes.com, June 11th, 2013
October 7th marks the 50th anniversary of the Learjet, for many the quintessential symbol of flying privately. Today the worldwide fleet of private aircraft is diverse ranging from the likes of the twin turboprop Beechcraft King Air and Embraer Phenom 100 to specially outfitted Boeing 747-400s that would normally carry over 400 passengers for commercial use. All together, including helicopters, AMSTAT tracks over 39,000 private aircraft worldwide. To give perspective, Delta Airlines operates 1,273 planes, United 1,242, followed by American with 869 planes.Warren Buffett’s NetJets is the largest operator of private jets in the world, and CEO Jordan Hansell recently noted, “We need to remind people we are a strong industry. We employ 1.2 million people in the U.S. and contribute $150 billion to the economy. We are one of the few industries with a trade surplus. We create very high paying jobs – pilots, dispatchers, maintenance, and manufacturing. Business aviation makes an economic contribution in all 50 states.”
Looking ahead, here are eight key trends in the industry:
1. Trend Toward Larger Models
U.S. engine- and equipment-manufacturer Honeywell predicts that nearly 10,000 new business jets valued at US$250 billion will be shipped during 2012-22, with a trend toward larger models expected to continue.
2. Make Sure Your Jet is Secure
Making sure multi-million dollar jets are secured is becoming a key business. Bestfly Flight Support was recently touting its fully secured hangar that it is building at Luanda International Airport in Angola, including on-site customs and immigration.
3. Customize Your Jets – Interior Design
The recent Business Jet Interiors World Expo attracted hundreds of designers scouting for design options and ideas, including showers and full dining tables. Top fashion designer Donatella Versace already has developed concepts for private jet interiors.
4. Pets Prefer Private Jets
Jetsetpets.com editor Kelly Carter notes the increased focus on the private jet market for family pets. Blue Star Jets’ Jet Set Vets service offers in-flight medical care and assistance with pets’ travel documents. Jumpjet, a fledgling private jet service, offers “pawsengers” the opportunity to join their owners on board.
5. Eco-Efficiency of Private Jets
As the financial elite become more conscious of their global eco-footprint, several private jet companies are touting their “green” creds. Jet manufacturer Dassault claims that their Falcon is among their fleet of the most environmentally friendly jets on the planet. The company implements its “eco-design” concept, “from the mining of raw materials to production, from in-service operation to end of service and recycling.”
6. In-Flight Entertainment Customized for Your Private Jet Companies such as Custom Control
Concepts will turn your jet into a screening room, install a concert-quality sound system and integrate their system with your favorite entertainment devices, including video game consoles, smart phones and tablets.7. Catering for Your Private Jet
From celeb chefs like Wolfgang Puck to the finest china and crystal, companies abound that offer gourmet meals for your private jet. Air Culinaire Worldwide offers a global menu as well as regional menus providing stellar cuisine from top chefs in Paris, London, New York and Las Vegas, among others.
8. The “Low End” of the Private Jet Market is Growing
JetSuite, whose founder and CEO Alex Wilcox was quoted in The Vivant saying he wants his company to be the Southwest Airlines of private aviation, is an air taxi service running smaller jets regionally in the West and Northeast. About half of Jet Suite’s customers own larger jets, but use the company to economize on short hop flying.
“The private jet market is larger than most people think with busy airports typically having four or more separate private jet terminals,” said Douglas Gollan, Editor-in-Chief of Elite Traveler, a magazine distributed on private jets, “I was just in Las Vegas, and looking out my hotel window at McCarran Airport, there were about twice as many private jets as commercial airliners, and the punch line is many private jets coming to Las Vegas actually use the nearby airport at Henderson.”
“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. Huff Post: Super Rich Putting More Money Off-Shore
We know from various researchers – Knight Frank, Wealth-X, Citi Private – that Ultra High Net Worth consumers are worth somewhere between $25 trillion and $40 trillion – the low figure is more than the combined GDP of China and the United States! But as usual there is more money – kept off-shore.
According to a report in the Huffington Post, “global offshore wealth, defined as assets housed in a country where the owner has no legal or tax residence, grew by 6.1 percent to $8.5 trillion last year, according to the Boston Consulting Group. “
The report claims Switzerland houses about one-quarter of all offshore assets. However the Huff Post points out the number may be low — “a 2012 study from the Tax Network found that the world’s wealthy are stashing up to $32 trillion offshore, or roughly four times the BCG’s estimate.”
Either way, the above numbers underscore the depth of wallet luxury brands have only skimmed with these Super Rich consumers.
“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. Art Basel = Private Jets
A report from the Daily Mail noted, “when Art Basel opened its doors to VIPs last year, 300 private jets touched down on the tarmac at EuroAirport Basel-Mulhouse-Freiburg,” calling it “a can’t miss stop on the fair circuit for the world’s wealthiest art connoisseurs.”
PrivateFly, a leading European online private jet booking service, published some interesting private jet stats: “Average non-art-fair day, Basel Mulhouse airport sees some 18 flights, while an average day during Art Basel, brings in 123 flights, roughly 581 percent more than on a normal day. On the first day of the fair last year, there were 300 jets making their way along the landing strip at Basel Mulhouse.”
A Gulfstream G550 commands roughly $100,000 for a one-way trip to Basel from New York. Of course when you are spending millions on art, $100,000 is relatively not that much.
ONLY ELITE TRAVELER – Elite Traveler is the ONLY global publication targeting and reaching private jet travelers to have its circulation successfully audited. View our BPA statement here .
4. Chinese Real Estate Buyers Flock to Seattle (with cash)
According to The Seattle Times, “real-estate brokers say they’ve noticed a wave of affluent mainland-Chinese buyers for luxury homes in Medina, Clyde Hill and other millionaire rows in West Bellevue. Data and public records show they’re right. It’s part of a cash-buyer phenomenon sweeping the home market.
“Real estate agent Joseph Ho climbed the gilded staircase of a Hunts Point mansion listed for almost $5 million, shooting video on his iPad and narrating in Chinese.
“Buyers from China have inquired about the 5,540-square-foot house. Ho made sure to capture a blue-sky fresco in the formal dining room – “It’ll remind them of Caesar’s Palace in Las Vegas” – and a yacht-ready dock on Cozy Cove.
“China’s superrich, who have historically been drawn to San Francisco, Los Angeles and Vancouver, B.C., are investing in Seattle-area real estate in growing numbers, buying multimillion-dollar homes, rent-producing properties and land for commercial development.”
“Citi Private Bank, for instance, reports it’s seen about a 30 percent increase over the past 12 months in the volume of mortgages involving buyers from Asia in the Seattle area. The buyers have several motives: Some want a safe place to invest and diversify their fortunes. Others want their children to start school or university studies here. And some want to launch businesses here.”
5. Britain’s Super Rich Double
According to The Times, “Despite the tough economic conditions, the super-rich are getting richer, with the number of million pound earners in the UK almost doubling in just two years.
“Figures from HM Revenue & Customs show there were 18,000 people earning £1m or more in the last tax year. Just two years ago there were only 10,000 in this income bracket. This is a significant increase on the 4,000 income millionaires recorded by the Revenue in the year 2000.
The report goes on, “Outside of these high earners many ordinary families are struggling with smaller incomes, as salaries have failed to keep pace with inflation in recent years, and fuel and food bills continue to rise. Wages in many traditional industries, such as manufacturing and construction, have fallen in recent years.”
While the UHNW crowd may be making more, the mass affluent will struggle to make ends meet: “It may take far longer for those lower down the income scale to bounce back and regain the standard of living they enjoyed before the financial crisis and subsequent recession. According to the most pessimistic report it could be 2023 before households with an average annual income return to the financial position they were in before 2008.”
“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. Flexjet Sees Wild Increase in Demand
According to a press release, “Flexjet, the world’s second largest fractional jet ownership services provider, reports new business growth of 83 percent when comparing Q1 2013 versus Q1 2012. During this period, sales of fractional shares grew 108 percent, while new jet card sales increased 48 percent.
“With the economy picking up speed, owners who have been tentative since the downturn have started to gain more confidence and are taking more and more trips,” said Deanna White, President, Flexjet. “Having the Dow Jones Industrial Average reach a record-breaking 15,000 points is not only a significant financial milestone, but also very good for our industry. People are ready to get back to business, and Flexjet takes them there.”
During the Easter travel weekend, Flexjet recorded flying hours at levels not seen since the height of the market in 2007. As a result, Flexjet is currently hiring pilots to satisfy the increasing demand.
All the best,
Douglas D. GollanGroup President and Editor-in-ChiefElite Traveler, the private jet lifestyle magazine Elite Traveler Superyachts, the superyacht lifestyle magazineElite Traveler Asia, Asia’s private jet lifestyle magazineElitetraveler.com, the private jet lifestyle onlineElite Traveler Update, our weekly e-Newsletter to private jet owners worldwide
Elite Traveler (audited by BPA Worldwide) is the only audited publication delivered to global locations for private jet travelers. We have global distribution in over 100 countries aboard private jets and in private jet terminals. Each issue is read by over 630,000 Ultra Affluent consumers with an Average Household Income of $5.3 million (Source: Prince & Associates, 2011)
Doug.Gollan@elitetraveler.comElite Traveler Magazine708 Third Avenue, 10th FloorNew York, NY 10017 USA