America may be fretting about rising energy prices, the worsening home mortgage crisis and falling home values, but in the rarefied air at 40,000 feet where the super rich cruise aboard their private jets, there is a different story.
A custom jewel-encrusted saddle for a pony, a $30,000 couture dress for a 4-year-old girl, a $200,000 restored classic Camaro , these are among the holiday gift lists of the world’s super rich, whose household net worth tops $10 million and many whose net worth is much higher.
According to the annual Elite Traveler Magazine/Prince & Associates 2007 Holiday Spending Survey, the super rich will increase their annual spending by between 17 percent and 67 percent across more than a dozen luxury categories. Some of their money will be spent on items such as jewelry, corporate gifts, events at hotels and holiday travel, including yacht charters and private island and villa rentals.
Recognizing that getting there is half the fun, more than 60 percent of the super rich will travel by private jet this holiday season and more than a third will give “jet cards” to friends, family and colleagues. These & #252;ber-luxe gift cards start at $40,000 for 10 hours of flight time. Not surprisingly, not a single person among the more than 280 super rich interviewed said rising gas prices are impacting their holiday travel plans.
Specifically, the super rich will spend 67 percent more on jewelry this year, increasing from $91,100 in 2006 to $152,400 in 2007. Electronics also registered huge gains, rising 53 percent from $25,700 to $39,300.
Travel Expenses
Projected holiday spending by the super rich is great news for the travel industry as well. It expects to see an increase of 44 percent in spending on events at hotels, 36 percent on hotels and spas, 23 percent on villa rentals and 19 percent on yacht charters.
“Clearly, the super rich are not impacted by the subprime crisis that has other sectors of the economy nervous this holiday season,” said Douglas Gollan, president and editor-in-chief of Elite Traveler, an exclusive lifestyle magazine distributed on private jets. “More than 70 percent of the super rich will spend an average of $44,900 on electronics this holiday season and they will outpace their mass affluent counterparts by an impressive 1,091 percent. Their spending in this and other categories signals a robust economy at the top tier.”
Gollan, who recently co-wrote “The Sky’s the Limit,” a book about the luxury lifestyle buying habits of the super rich, noted, “The Super Rich segment will be the most important source of business for providers of luxury goods and services and as the mass affluent trade down and conserve. The segment of the private jet set is absolutely going about their spending in a business as usual way, and in fact as our survey shows, spending considerably more.”
The survey tracks spending trends among the super rich (those with a net worth of more than $10 million) and mass affluent (those whose net worth is between $1 million and $9.9 million), and it revealed that the super rich will outspend their mass affluent counterparts in every one of 16 categories ranging from charitable donations to watches to gifts for pets.
Extravagant Gifts
For example, the super rich are projected to spend 7,383 percent more than their mass affluent counterparts on corporate gifts. Similarly, quadruple-digit variances can be found in jewelry, fashion, hotels/resorts, watches, wine/spirits for entertaining, in-home spa services, electronics and charitable donations.
Interestingly, virtually equal percentages of the super rich and mass affluent plan to make charitable donations this holiday season, registering 99.6 percent and 99.7 percent in the survey, although the super rich donations will outpace the mass affluent by 2,323 percent, rising 23 percent compared with last year , from $94,200 to $116,300 in 2007.
The complete survey can be found at www.elitetraveler.com/research.html. The survey queried nearly 850 super affluent individuals to determine how the holiday would shape up for luxury retailers.
Established in 2001, Elite Traveler reaches an estimated 575,000 readers who have an average household income of $5.3 million.
