« Social Life Magazine Party | Main | Sao Paulo Fashion Week »

June 28, 2005

Elite Traveler Insider for Luxury Marketing

Wanna target the rich? Listen up! Douglas D. Gollan, owner of Elite Traveler will tell you how. This information is provided to offer a better understanding of how to target the Elite Affluent market, its impact on your business and other trends that affect you.

The Rich are Getting MUCH RICHER, according to The New York Times…
How are the Elite SPENDING their Summer? New Prince Research…
For sale, a $35 Million Tiara
Business Jet purchases a Big Deal - Over $100 Billion…
Lufthansa again expands program with NetJets private jet transfers….

1. The Rich are Getting MUCH RICHER…
Do you know your customer? Will your customer still be a customer the next time the stock market dives? What about when the interest rate on their adjustable rate mortgage jumps and their monthly payment rises by $1,000? How about when their company announces 25,000 layoffs?

A recent article in The New York Times shows in the U.S. how concentrated wealth and the ability to spend significant amounts of money on luxury goods has become. Draw a line under the top 0.1 percent of income earners - the top one-thousandth. Above that line are about 145,000 taxpayers (as a comparison Nieman Marcus' In-Circle program which accounts for 50% of sales has 103,000 members), each with at least $1.6 million in income and often much more. (Elite Traveler with a Median Household Income of $910,000 and 120,124 readers with a Household Income of over $1,000,000 is the closest media match to this target - Departures for example has a Median Household Income of $189,382 and only 13,000 readers in this category, Town & Country is at $128,194 and 28,000 while Conde Nast Traveler and Travel + Leisure are both under $135,000 with 26,000 readers combined who make more than $1 million).

The average income for the top 0.1 percent, according to The Times, was $3 million in 2002, the latest year for which averages are available. That number is two and a half times the $1.2 million, adjusted for inflation, that group reported in 1980. No other income group rose nearly as fast.

The share of the nation's income earned by those in this uppermost category has more than doubled since 1980, to 7.4 percent in 2002. The share of income earned by the rest of the top 10 percent rose far less, and the share earned by the bottom 90 percent fell. Next, examine the net worth of American households. The group with homes, investments and other assets worth more than $10 million comprised 338,400 households in 2001, the last year for which data are available. The number has grown more than 400 percent since 1980, after adjusting for inflation, while the total number of households has grown only 27 percent.

And what's ahead?

The Bush Administration's tax cuts stand to widen the gap between the hyper-rich and the rest of America. The merely rich, making hundreds of thousands of dollars a year, will shoulder a disproportionate share of the tax burden.

President Bush said during the third election debate last October that most of the tax cuts went to low- and middle-income Americans. In fact, most - 53 percent - will go to people with incomes in the top 10 percent over the first 15 years of the cuts, which began in 2001 and would have to be reauthorized in 2010. And more than 15 percent will go just to the top 0.1 percent, those 145,000 taxpayers.

2. New Prince Research measures Summer Spending of the Elite Traveler…
The Elite Affluent - those folks with a Net Worth of $10 million + - don't take a vacation - from big spending that is.
In the latest research by Prince and Associates, the Elite Affluent - the primary readership of Elite Traveler showed they will be busy dipping into their pocketbooks this summer

A few highlights on what our readers will be spending on and how much:
$63,000 on watches and jewelry
$79,000 on villa rentals
$98,000 on hotels/resorts/spas
$317,000 on yacht rentals
$71,000 on luxury cruises
$39,000 on summer entertaining (excluding alcohol)
$30,000 on wines and spirits
$16,000 on fashion accessories
$137,000 on redecorating
$14,000 on electronics
$79,000 on experiential excursions

3. For Sale: $35 Million Tiara
This Tiara, almost as expensive as a Gulfstream V jet, is 177 feet long and was docked at Pier 86 in New York City. Israeli entrepreneur and owner Jonathan Leitersdorf and listing agent Wendy Maitland of The Corcoran Group hosted a soirée this month to show the massive sailing yacht. Guests at the party included Julia Stiles, Josh Lucas, Jack Hidary and Michael Hirtenstein, who watched the sun set and admired the décor of the vessel (a Jacuzzi, 5 cabins, rooms for the 10 person crew, a Chagall, tables accented with crocodile skin), sans chaussures, of course. The yacht was designed by Dubois Naval Architects and is only a year old, so for those out there who want to skip the typical 4 year period it takes to design and build a yacht like this, get your checkbooks ready (spending no more than 10% of your net worth on your boat, of course.) There is also a package price available - when you purchase the Tiara in conjunction with Leitersdorf's $20 million triplex in Greenwich Village.

4. Over $100 Billion Projected in New Private Jet Purchases…
Manufacturers of business aircraft are bullish on the private jet market, reflecting new and renewed interest in private transport. Business jet purchases and fractional ownership continue to rise. A leading aircraft manufacturer predicted 8,300 business jet purchases worldwide through 2014, valued at more than $131 billion. The number of private jets flying is booming - on an average day there are over 1,000 private jet movements just to New York City's key private jet airports - Teterboro, White Plains, Morristown and LaGuardia. And with the cost of flying privately $5,000-$10,000 per hour, that's a lot of wealthy folks who can buy luxury products!

5. Lufthansa steps up marketing to private jet travelers…
Lufthansa, which recently partnered with Netjets to offer First and Business Class passengers private jet connections when they arrive in Munich on long-haul flights has now expanded that service to Frankfurt due to very high demand.

A recent report by Travel Weekly noted the airline continues its drive to cater to its highest-paying travelers, even if that means spending hundreds of millions of dollars. Nowhere is that commitment more apparent than in the exclusive terminal Lufthansa opened at Frankfurt Airport in December. Only first-class customers and the most frequent of Lufthansa's frequent flyers can use it.

Those customers get a personal assistant at their disposal throughout their stay and can choose between an individual office with a telephone and laptop connection or a luxuriously furnished room with a bath and shower. When the time comes to catch the flight, the customer can choose to be driven in a Mercedes S-Class or Porsche Cayenne directly to the aircraft, where they climb the stairs to board.

Lufthansa plans to open another first-class terminal at its Munich hub next year and has discussed the possibility of expanding it to other airports, said Thomas Winkelmann, Lufthansa's vice president for the Americas.

"We saw the only chance to stay profitable is if we have the highest possible percentage of business and first-class passengers," Winkelmann said. Private jet statistics show about 70% of those consumers who fly privately within North America fly commercially to Europe, so the tie in with Netjets to attract more private jet passengers on Lufthansa trans-Alantic flights makes sense.

Lufthansa spent more than $36 million to build the first-class terminal and three new lounges at Frankfurt, and it is spending about $100 per customer on the services it provides to about 400 people at the first-class terminal each day. That's on top of the $365 million Lufthansa already spent on its new long-haul business class.

Posted by sergeg at June 28, 2005 09:35 PM

Trackback Pings

TrackBack URL for this entry:
http://www.piercemattie.com/cgi-bin/moveabletype/mt-tb.cgi/394