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Elite Traveler – ET Insider – June 09, 2011

ET Insider – June 09, 2011

Elite Traveler Insider –

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June 09, 2011

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.

In this issue:

1. China’s Super Rich Drive Private Jet and Luxury Boom

2. MUST READ: WSJ Tracks Lifestyles of The Private Jet Set; Up in The Air;

3. India Again Shows Its Private Jet Marketing Is Booming

4. Report from The Vegas Jewelry Shows

1. China‘s Super Rich Drive Private Jet and Luxury Boom

According to a recent Associated Press article, “China’s private jet market is cleared for take-off.” With the launch issue of Elite Traveler Asia days away from heading to the printer and then on to private jets from Japan to Australia and West to Pakistan and India, I have been spending a lot of time in the past year getting closer to the booming private jet industry in the region, and of course China.

As AP put it, “The country’s soaring economy is creating a class of wealthy entrepreneurs who have plenty of money to spend on one of the ultimate symbols of success: the executive jet.”

At the same time, the article notes the main barrier for private jet travel in China has receded: “Authorities, meanwhile, are…loosening restrictions on airspace and easing bureaucratic formalities…for luxury fliers.”

Many of you know we launched Elite Traveler in 2001, a point where “there were essentially no private jets in China and only a handful in Hong Kong,” said Justin Lee Firestone, managing director of Firestone Management Group, a private jet consultancy.

Of course that’s changed quickly in the past 24 months. The regional fleet of private jets is estimated at some 800, more than the fleets of major commercial players Cathay Pacific, Singapore Airlines, Japan Airlines and Korean Air combined.

“Those numbers are explosive,” Firestone told the AP.

Want another data point? “Jason Liao, who left his job as Beijing-based managing director at Bombardier last year to set up his own company helping people buy business jets, forecasts that 70 private jets will be delivered in China this year. That would be an impressive jump in sales because it would double the number in the country last year.”

However, as big as China is for luxury marketers, Wealth X research recently released a figure indicating that a huge amount of the spending power is concentrated in the hands of a relatively targeted UHNW consumer base: Just 11,474 UHNW individuals control some 33 percent of total HNW wealth in China!

So as private jets take flight in the region and in China, we are pleased and proud that Elite Traveler Asia will provide a new and important marketing platform to build your brand among the top luxury users and influencers at the beginning of Asia’s century.

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Not another magazine or newspaper in that stack of unread mail: With over six private jet trips every two months, that’s at least six chances for wealthy private jet travelers to see your advertisement in Elite Traveler. And even better, share it with friends on the jet!
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2. MUST READ: WSJ Tracks Lifestyles of The Private Jet Set; Up in The Air;

Outside of Elite Traveler, Elite Traveler Superyachts, Elite Traveler Getaways, Elite Traveler Watch Guide, Elite Traveler Asia and Elite Traveler Hotels/Resorts/Spas, I do read a few other publications and I always admire The Wall Street Journal when they do what they do best: investigative reporting behind boardroom doors, or in this case out on the tarmacs frequented by private jets.

Below are some highlights from a great piece by Mark Maremont and Tom McGinty:

“The total eclipse of the sun last summer was visible only from a tiny sliver of the South Pacific. Google Inc. founders Larry Page and Sergey Brin were among the few to see it-they flew there by private jet. “Two of the Google founders’ planes flew the eight-plus hours from the U.S. mainland to Tahiti last July just before the eclipse, Federal Aviation Administration flight records show. Mr. Brin was spotted taking photos through a telescope as the pair watched the event from an island dock. Afterward, they posed for a snapshot with a fellow eclipse-watcher.

“Those with access to private jets fly around the globe on a whim, steering clear of security lines and never being charged extra for baggage. Their flight paths are generally hidden from view through a federally approved program that keeps certain aircraft movements “blocked” from the public.

“The Wall Street Journal has penetrated this hidden world. Via a Freedom of Information Act request, the Journal acquired records of every private aircraft flight recorded in the FAA’s air-traffic management system for the four years from 2007 through 2010-which includes those flights previously blocked from public view.

“Some private-jet owners don’t appear to be fazed by the prospect of their past plane movements becoming public. “I have a plane. I bought it so I could use it. Shocking, isn’t it?” Mark Cuban, a tech-boom billionaire who owns the Dallas Mavericks, said in an email. A Gulfstream G-550 registered to Mr. Cuban’s Radical Ventures LLC has flown often to Los Angeles, New York, the Cayman Islands and Las Vegas, among other locales, the FAA records show.

“As might be expected, the migration patterns of private-jet fliers vary with the season, the flight information shows. From New York-area airports, the most popular resort destination for private jets is Palm Beach, Fla. Peak time is President’s Day weekend in February, when an average of 119 private jets annually make the trek south, four times the average weekend traffic. Other peaks occur around Christmas and New Year’s, and January’s Martin Luther King holiday. Donald Trump’s Boeing 727 flew to Palm Beach 82 times over the four years.

“When the winter season ends in Palm Beach, some of the same jets start flying from New York to the Massachusetts islands of Nantucket and Martha’s Vineyard, where private-jet traffic peaks around July 4th and in August.

“A prime example: Ziff Brothers Investments, which runs money for three brothers who are heirs to a publishing fortune. Last year, its four jets landed 97 times at Palm Beach, where the family owns an oceanfront complex, and 40 times at Martha’s Vineyard, where one brother, Dirk Ziff, owns a home. A spokesman didn’t comment.

“From Los Angeles-area airports, the most popular resort destination for private-jet travel is Las Vegas, followed by Palm Springs, Calif., and Scottsdale, Ariz. Private jets leaving Chicago tend to head south out of the cold, with South Florida-including Naples, Ft. Lauderdale and West Palm Beach-ranking as the most popular resort destination.

“Glitzy Aspen, Colo., is both a winter and summer retreat and draws strongly from jet-setters almost everywhere in the country. Among the most frequent Aspen visitors: planes operated by TPG Capital, a private-equity firm formerly known as Texas Pacific Group. They landed at least 217 times in the mountain retreat over the four years. David Bonderman, the billionaire co-founder of Ft. Worth, Tex.-based TPG, owns a home in Aspen. A spokesman declined to comment.

“Some companies make trips to vacation spots they say double as business locations. Halliburton Co. jets landed a total of 110 times at an airstrip on Marathon Key, in the Florida Keys, over the four years. The airport is a short drive from a retreat on Duck Key owned by the oil-services concern, which a spokeswoman said is used exclusively for “business-related activities” by Halliburton personnel and clients. “News Corp., publisher of The Wall Street Journal, operates three jets, according to FAA records. The most frequent landing spot outside of the company’s New York headquarters was Los Angeles, with 273 arrivals during the four-year period. A spokeswoman declined to comment.

“Messrs. Page and Brin, the Google co-founders, operate at least four aircraft registered under various companies that aren’t connected to Google, FAA and other aviation records show: a Boeing 767, a Boeing 757, plus two Gulfstream G-V’s. During the four-year period, the jets’ most frequent destinations outside of their northern California base were Los Angeles, New York and Washington.

“For last year’s eclipse-viewing journey, the 767 and a Gulfstream V each made two round-trips from the U.S. mainland to Tahiti. Those flights used an estimated 52,000 gallons of aviation fuel and in total cost upwards of $430,000, according to calculations by Conklin & de Decker Aviation Information. The research firm is hired by some public companies to provide aircraft-cost estimates for regulatory filings.

“A Google spokeswoman confirmed that the Tahiti journey was for the eclipse, saying the pair brought a group with them on the planes.

“Much of the travel reflected in the FAA data is far less exotic than eclipse-trips to Tahiti. The four jets in the U.S. that recorded the largest number of flights over the four-year period, for example, are all owned by Menard Inc., a privately-held chain of home-improvement stores based in Eau Claire, Wisc. The planes often make a half-dozen flights a day, traveling to locations such as Marshall, Minn., Sioux Falls, S.D., and Manhattan, Kan.

“A Menard spokesman said the jets are an efficient way for employees to conduct on-site visits and training at widely-scattered stores.

“Still, the large percentage of jet flights that involve travel to ritzy resort destinations suggests that the vehicles often are used for vacation getaways. There were at least 6.7 million private-jet flights recorded by the FAA system over the four year period, costing at least $26 billion and burning roughly three billion gallons of aviation fuel.

“About one-third of the trips were to or from a group of 300 resort destinations-places such as Palm Beach, Aspen, Las Vegas, Nantucket, the Bahamas and Cabo San Lucas, Mexico.

“A few of the super-rich own or operate multiple jets. Bill Gates during the four year period owned four jets plus a helicopter through various private entities. At least one plane has been recently sold. The most-frequently visited spots for those planes were Washington; Palm Springs, where Mr. Gates has been spotted playing golf; and Bozeman, Mont., near the exclusive Yellowstone Club to which he belongs. The planes also flew to the African nations of Mali and Tanzania.

“The database also hints at Mr. Gates’ well-known friendship with fellow billionaire Warren Buffett: The planes landed a total of 18 times in Omaha, Neb., home to Mr. Buffett’s Berkshire Hathaway Inc., where Mr. Gates also serves on the board.

“Microsoft co-founder Paul Allen operated three jets through a firm called Vulcan Flight Management, aviation records show, including a Boeing 757 he recently sold to Donald Trump.

“The aircraft flew frequently in the four-year period to Los Angeles, Santa Fe, N.M. and Nice, France. One of the planes, a Gulfstream V, flew from Seattle to a game park in South Africa late last May, then returned via Kenya three weeks later. A spokesman for Mr. Allen declined to comment.

“Sometimes it’s difficult to tell who operates particular jets. A Boeing Business Jet registered to a limited-liability company at the address of a Los Angeles law firm is a case in point. A 2008 regulatory filing by Dreamworks Animation SKG Inc., however, revealed that the aircraft’s joint owners are Hollywood producer and director Steven Spielberg and Dreamworks CEO Jeffrey Katzenberg. Outside of southern California, the most frequent destination for the jet over the four years has been the Hamptons, where Mr. Spielberg owns a vacation home. A spokesman declined to comment.

“Then there’s actor John Travolta, an avid pilot who owns three jets with registration numbers ending in “JT”, including a Boeing 707. The planes last year flew a total of 111 times from an Ocala, Fla., airstrip near Mr. Travolta’s residence, to Clearwater, Fla., the headquarters of the Church of Scientology to which he belongs. A publicist acknowledged Mr. Travolta is a pilot, but declined other comment. A representative from the Church of Scientology declined to comment. Other celebrities with their own planes include Oprah Winfrey, whose Bombardier Global Express landed 122 times at Santa Barbara, Calif., close to a giant estate she owns, often departing Chicago on Friday afternoons or evenings.”

Of course, if the pages of Elite Traveler could talk. Think about all of the trips our beautiful magazines have made up in the air with the richest and most influential media audience in the world.

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With 41 trips per year, including 11 intercontinental trips and 3+ principal residences, we know where you’ll find elite travelers:  in their private jets and in private jet terminals.  It’s why we’ve invested in providing BPA audited circulation to private jets and private jet terminals in over 100 countries.
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3. India Again Shows Its Private Jet Marketing Is Booming

From The Times of India, radar screens across the country are filling up with private jets:

“The soaring number of chartered planes and private jets are now jostling with commercial flights for the attention of aviation experts and airport operators.

“The aviation industry has been on its toes with the ever-rising number of commercial flights and the burgeoning passenger traffic. Now, the officials also have to deal with the rising general aviation (GA) flights, which refer to all flights other than military and scheduled operations.

“A look at the GA flight movements at Mumbai and Delhi indicates why airport officials and experts are mulling over creating special or separate facilities for those who want to fly out on their private jets or chartered planes. While Mumbai airport saw a rise of 61.18% in GA movement from 2005-06, its Delhi counterpart witnessed a growth of 31.33% in the past four years.

“Mumbai, which handled 8,245 non-scheduled flights in 2006, deals with 13,290 of them in 2010-11. Every day, an average 38 GA planes take off and land in Mumbai, though the number was 22 a few years ago. Last year, Mumbai airport handled 30,000 passengers who flew in and out through private or non-scheduled flights.

“Most business honchos and politicians visit the two places, making them a hub of general aviation activity. As more corporates are based in Mumbai, the increase in GA may be more there,” said a senior aviation analyst.

A report published by the Centre for Asia Pacific Aviation (CAPA) in February 2011 also predicts a major growth in the general aviation sector in India over the next 10 years. The sale of new aircrafts, mostly business jets, helicopters, turboprops and piston engines, is likely to go up to $12 billion.

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Spotting Fakes: How can you be sure that a publisher is really sending out the number of copies he or she says? How can you make sure they are actually putting copies on private jets? Ask for the BPA or ABC audit statement. You can find our BPA statement here.
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4. Report from The Vegas Jewelry Shows

Well we all know presidential candidate Newt Gingrich likes to buy jewelry for his lady with a $250,000 line of credit at Tiffany’s. Of course, the former Georgia congressman isn’t alone.

Six days of meetings at the two major Las Vegas jewelry shows, JCK and Couture, provided plenty of time for tales of elite travelers and their lust for expensive baubles.

Where the desert meets the lake: One New York jeweler told us a story of getting a call from a member of a royal prince’s entourage. The prince was ensconced in The Cleveland Clinic for a month having arrived with a fleet of private jets that then constantly shuttled entourage members into Cleveland and wherever they needed to hop. Having been asked to “send everything” he had out, his team waited several days at The Ritz-Carlton with jewelry waiting in a series of meeting rooms. Finally, members of the entourage pointed at entire trays that were packed up and eventually purchased. “It was a huge sale,” the jeweler noted.

Flying high in Vancouver: Another jeweler told us about how he had flown up to meet an important customer coming in from China in Vancouver. He arrived and then made the trek to the opposite side of the field waiting for his Chinese customer. As the customer and his wife came off the plane and entered the terminal he told me how his wife went right away to pick up the new copy of Elite Traveler. Obviously I enjoy stories like that.

Clearly the jewelry market is back after several difficult years. There are many stories about elite travelers who are always updating their wardrobe and then accessorizing by buying three or four new pieces of jewelry and dropping $10,000 to $20,000 as if they were buying a bunch of bananas at the supermarket.

And while I was happy to hear about the big purchases, with elite travelers snapping up $60,000 and $600,000 pieces, hearing the stories, it was very clear that elite travelers are driving a significant portion of purchases at the $2,000 to $10,000 level, often buying multiple pieces in one fell swoop.

One jeweler related how a famous client had received a $60,000 Rolex as a gift when she visited a Sheik’s mega-yacht, while another told us about a client who bought two dozen of his pieces that go for about $2,000 as party favors for a dinner she was hosting.

Interestingly, The Wall Street Journal provided two good stories: one that I read on my way there and one on this flight back. The one on the way out was titled “The Lost Decade” and basically summarized that for the average American their house is worth the same as it was in 2001.

On my flight back, another piece noted that 40 percent of consumers – mostly the mass affluent segment – who took second mortgages are under water and are behind on payments.

At the same time I picked up the promotional piece of one consumer magazine that boasted that their readers spent some $5,500 per year on watches and jewelry. My first reaction was that that figure is one leaky roof or blown car engine from slipping to zero. At the same time, it made me feel pretty good that Elite Traveler readers spend $248,000 annually per household on jewelry and, drum roll please, another $147,000 on watches.

Clearly folks who are spending $50,000 to fly from Dallas to Los Angeles or $60,000 from Chicago to the Bahamas are spending lots of money on other luxuries, and in particular from the stories I heard, lots of nice jewelry!

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Would you buy a diamond without a certificate? Would you fly on a plane that hadn’t been certified as safe to fly? Would you buy milk in the supermarket that didn’t have a ‘sell by’ date? Before you buy advertising, next time a publisher says they have distribution on private jets or in private jet terminals, ask for their Circulation statement from ABC or BPA. Ask for them to show you the number of copies going to private jet travelers. You can find our BPA statement here.
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All the best,

Douglas D. Gollan
Group President and Editor-in-Chief

 

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