April 8, 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. WSJ: Housing Market Worst Since 1930s; Job Outlook Grim

2. Top Executives Continue to Rake in Big Bucks

3. Who is the Elite Traveler?

4. A Kentucky Derby Offer for You!

1. WSJ: Housing Market Worst Since 1930s; Job Outlook Grim

Read The Wall Street Journal these days and knock wood if your business is strong. According the business paper, the U.S. economy lost 80,000 jobs in March, the biggest drop in five years, as weakness in the labor market spread beyond housing and finance to engulf a broad swath of businesses.

The drop in employment was the third consecutive monthly decline. Also, revised data showed that employers cut 76,000 jobs in both January and February, more than previously thought. Together, the numbers offer the most persuasive evidence yet that the economy has slipped into a recession.

The Labor Department also said that the unemployment rate jumped to 5.1% last month from 4.8% the month before. A rise of that magnitude has never occurred in the postwar period without the economy being in a recession, according to the paper.

At the same time, the auto industry's sales slump deepened sharply in March amid a powerful economic downdraft, and even once-invincible Toyota Motor Corp. took a big hit.

Toyota's sales fell 10% in March compared with the same month a year earlier, only slightly better than the 12% decline in total U.S. vehicle sales.

It was the seventh drop for Toyota in the past nine months -- its worst stretch since the early 1980s, according to company officials. "We have almost one assembly plant's worth of idle capacity," said a Toyota executive familiar with manufacturing.

According to The Journal, "That's a stark signal of the malaise now afflicting auto makers in the U.S. as the troubles on Wall Street and in the housing market take a rising toll on the economy. When people see the value of their homes decline -- and real-estate executives say home-price falls around the country are the worst since the 1930s -- expensive purchases such as a car are often the first to get postponed."

More bad news is in front of us, according to The Journal: "I'd like to tell you the worst is behind us but I really can't give you that assurance," said Jim Farley, Ford Motor Co.'s marketing chief, in a conference call. "The second quarter may be the most difficult of the year."

High gasoline prices, a weak job market and the credit crunch are all driving down car sales. Many lenders are requiring higher credit scores and demanding bigger down payments on car loans, especially in states hard-hit by housing foreclosures.

The March sales rate translates into a seasonally adjusted annual rate of 15.1 million, below the 16 million considered healthy by the industry.

2. Top Executives Continue to Rake in Big Bucks

After selling off its luxury brands, and losing just under $3 billion, Ford held 2007 salaries steady for Chief Executive Alan Mulally and several top executives but rewarded them with bonuses for progress achieved in the company's turnaround plan last year, The Wall Street Journal reported.

Ford reported a loss of $2.72 billion in 2007, compared with a loss of $12.61 billion in 2006.

In a filing Friday with the Securities and Exchange Commission, Ford said Mulally received $2 million in base salary, a $4 million bonus and more than $11 million of additional compensation. His base salary was unchanged over 2006.

Ford's top five executives received $60.68 million in salaries, bonuses and other compensation in 2007, according to the filing. In 2006, Ford's top seven executives were given total compensation of $64.26 million.

As part of his compensation package, Ford continued to allow the former Boeing Co. executive and his family to use the company plane to travel between Dearborn, Mich., and Seattle, where he and his family lived before Mr. Mulally took the helm at Ford in September 2006. Mr. Mulally's flights were valued at $752,203 in 2007, a benefit Ford said it afforded to "ease the burden" of his move to Michigan, according to the regulatory filing.

Mr. Mulally has earned nearly $50 million in compensation since taking the helm of the auto maker.

3. Who is the Elite Traveler?

The very rich are always on the go. Who are they? Where did they come from? What were they like before they were Super Rich?

To help you better visualize the elite traveler, we delved into massive piles of research and data and came up with our perfect, profile couple.

Take a look inside and see who they are, and how they can help you grow your business:

He is 46; she is 36.

They are self-made - over 90% of households with a Net Worth $10 million + in the U.S. created their own fortune.

They are recently rich - over 80% of these households have achieved Super Rich status in the past five to 10 years.

Before they were rich:

• They had credit card debt. They had charged their credit cards and borrowed, but not to trade up and buy an Hermes tie here or a LV bag there; they borrowed from Uncle Phil and Cousin Bill to fund their burgeoning "widget" business.


• They were vociferous readers, but not of Vogue, GQ or Conde Nast Traveler. They read trade journals like "Widgets Weekly" and when they were shopping it wasn't on Madison Avenue or Rodeo Drive, it was in the aisles of convention centers in Cleveland, Orlando and Las Vegas, shopping their new innovation on how to make widgets.


• They didn't come from "old money." They didn't grow up shopping for saddles at Hermes with dad before going to the club. Chances are that Dad was a mid-level manager at a factory and mom was a teacher or nurse. Their household valued education and work ethic, not "spending on things you can't afford."


• As recently as five years ago, they were more familiar with where to find bleach at Wal-Mart than what floor to get made-to-measure suits at Neiman Marcus.

Today:

• They walk past your boutique on Worth Avenue, Madison Avenue, Old Bond Street or the Bund and they have never or vaguely heard of your brand.


• They can't pronounce your brand's name.


• They have no idea where your product is made.


• They have no idea whether it is made by a fourth generation artisan craftsman in Florence or in a factory outside Guangzhou.


• They have three houses each costing more than $2 million, at least 1,500 miles apart and one in another country. Their private jet sets them free. They are looking for something new - They aren't selling any of their current ones. Destination and price are not an object.


• They are spending $7,000 per night for their suite at The Four Seasons; They saw a pictorial of the suite in the Nov/Dec issue of Elite Traveler.


• They will be spending more money on suites because they take 41 trips per year, including 11 intercontinental trips.


• They are now involved in funding seven new businesses on three different continents, but they are also enjoying the private jet lifestyle.


• Their new $48 million Gulfstream 550 is at the airport.


• They also buy jet cards for family travel when the Gulfstream is taken.


• They spent $10 million to furnish their jet inspired by a story in Elite Traveler on Paris' top suites.


• Business interests and their new social circle keep them busy, but each time they return to their jet, they pick up a copy of Elite Traveler scanning the pages for good ideas on where to go next, a present for some friends they will visiting next week or to get a quick primer on what's hot off the fashion runways as reported by Paris-based Jessica Michault. After all, money makes it easier to look good!


• It is his birthday next week. Maybe a watch? The Audemars Alinghi matches his lust for yachts. He is building a 108-footer, which connects to his newfound appreciation for the complexity of wearing a machine with more moving parts than an automobile engine on his wrist. Price? Doesn't matter, but would like to keep it under $100,000. He likes Elizabeth Doerr's column on new watchmakers and Osvaldo Patrizzi's column on which watches to add to his "collection."


• Speaking of yachts, he plans to stop in Hamburg next week to check on how his new toy is progressing at the shipyard. She will fly some girlfriends from her hometown to London for some spas and shopping. With the current exchange rate, it will be $150,000 when all the bills are totaled.


• By the way, next month their daughter turns 13 and in two months their son is 11. They will be taking two weeks in Southeast Asia following an itinerary they read about in Elite Traveler. They actually used the article to hire their tour guides and choose their hotels. Their pilot will double check the right airports for flying in and out.


• In August, it's her father's 80th birthday. They need a five-star resort where they can bring about 50 friends and family and are thinking of the Caribbean, Florida, Hawaii or Mexico for a four-day blow out, all expenses paid, including getting Dad that Bentley watch by Breitling after the car he always dreamed about. But where to go? Time to go to elitetraveler.com! PS - The real Bentley GT they read about in Mike Espindle's Test Drive will be waiting in Grandpa's driveway when he gets back home. What will the neighbors say? And for Grandma and daughter? Well, diamonds are a girl's best friend, right? Let's take a look at Elite Traveler's Best of Italian Jewelry guide now online at www.elitetraveler.com, reported by Tanya Dukes following her trip to Italy's famous Vicenza First Jewelry Fair.

Spending last year:

Annual spending according to a survey of over 600 private jet owners by Prince & Associates:

• $404,000 spent on yacht rentals


• $224,000 spent on events at hotels


• $168,000 spent on villa and chalet rentals


• $157,000 spent at hotels and resorts for personal use


• $138,000 spent on cruises


• $107,000 spent on spas


• $98,000 spent on experiential travel


• $248,000 spent on jewelry


• $147,000 spent on watches


• $117,000 spent on fashion


• $29,000 spent on wine and spirits


• $226,000 spent on luxury automobile purchases

They can spend plenty more - their current Net Worth is $89 million.

How do they feel about Elite Traveler?

• They consider Elite Traveler higher quality than any other magazines they happen to pick up as they trot across the globe. They are in good company: 91% consider Elite Traveler higher quality than other magazines.


• They appreciate that they get pictures of the interiors of suites, the names of the best therapists at spas, names of top tour guides and direct contact names and phone numbers, be it a fashion boutique or a luxury hotel. Again, they are in the vast majority: 89% find content in Elite Traveler they don't find in other magazines; 88% like Elite Traveler's design and format.


• They use Elite Traveler as their personal concierge to the private jet lifestyle, often discovering brands they have never heard off, and whetting their appetite. 86% believe Elite Traveler is a good showcase for luxury products.

They are always shopping. Elite Traveler is their guide:

• 69% have purchased accessories seen in Elite Traveler


• 68% have purchased jewelry from Elite Traveler


• 68% have selected a hotel or resort for a meeting or event from Elite Traveler


• 65% have purchased apparel from Elite Traveler


• 58% have chosen a hotel or resort from Elite Traveler


• 56% have purchased a watch seen in Elite Traveler


• 40% have purchased real estate or vacation club memberships from Elite Traveler

Where are they today?

In one of the more than 100 countries around the world where Elite Traveler is distributed onto their private jet!

So how much are they worth?

About $90 million, and according to Cap Gemini, they (Super Rich with a Net Worth of $30 million +) are part of the fastest growing segment of the wealthy.

They are the reason why private jet travel is expected to increase by 300 percent in the next 10 years and has grown so rapidly recently. They are why private jet travel is expanding even in this bad economy. They just bought a fractional share for when they travel separately and a jet card so the kids can shuttle between their homes in Los Cabos and Aspen without changing planes.

By the way, would you like them to know who you are?

We're glad to suggest a comprehensive marketing campaign with Elite Traveler, the private jet lifestyle magazine, and Luxus Networks, the world's largest provider of advertising in private jet terminals!

4. A Kentucky Derby Offer for You!

Run for the Roses attracts over 1,000 private jets to Louisville, Kentucky from as far as way as China and Dubai. From Lear Jets to private 747s, the tarmac will be filled with CEOs, Sultans, Billionaire Businessmen and other elite travelers.

And their first and last impression of Derby Weekend could be your brand.

Elite Traveler is delighted to join with Luxus Networks in hosting the first ever "Run for the Roses Elite Retreat" at Atlantic Aviation from Thursday through Sunday May 1 to 4.

During that period we are converting the lovely lounge in the private jet terminal to an Elite VIP Room and Luxury Pavilion.

For luxury brands that want to make an impact with this elite group, we are offering an opportunity to be a Title Sponsor or an Elite Sponsor, as well as Luxury Leader packages which start for $3,000.

Each Luxury Leader package includes two 2-sided lollipop stands prominently displayed on our "Elite Runway" and welcome area. Additionally, you will get two minutes every hour of programming on Luxus Digital, our repeating 60-minute loop of luxury programming. You can run a long-form vehicle or quick 10 second spots for constant awareness. You can even run your existing 15, 30 and 60- second television commercials.

A key benefit is the opportunity to place collateral items in our special "Luxury Paddock" where the more than 5,000 elite travelers who come through the lounge will be able to more intimately know your brand and product.

Finally, your logo will be included in an e-mail sent to private jet owners worldwide inviting them to visit our Elite Retreat and you will be able to put a promotional gift in goody bags offered to all elite travelers.

The investment for these four amazing days of exposure begins at $3,000 net for the Luxury Leader opportunity, and is limited to a select number of partners on a first come, first served basis. Title and Elite Sponsorships include outdoor banner displays, and additional promotional opportunities inside the terminal.

For more information on all Kentucky Derby sponsorship opportunities, click here.