This is an article from Fox Business featuring AARC research about the latest trends in affluent travel (http://www.foxbusiness.com/personal-finance/2011/06/10/adventures-in-affluence-how-billionaire-vacations/)

By Kathryn Glass

Published June 10, 2011

Recent market performance notwithstanding, the return of glitzy globetrotting for the super wealthy is back, travel connoisseurs say, as the days of cutting back to seem “recession-chic” slowly become a thing of the past.

According to the American Affluence Research Center, 35% of America’s wealthiest households plan to spend more on domestic vacations this year, and 31% plan to spend more on vacations abroad. That means the rich are planning to do some serious spending on everything from private jets to private islands.

If you have ever wondered how the most affluent travelers go about planning their perfect summer getaway, you can be sure they don’t sit online and compare hotel suites like the rest of us. When money is no object, the rich and famous call a high-end travel agency, or concierge service, as it’s more appropriately dubbed, which specializes in fulfilling the sometimes bizarre, always lavish travel and service demands of the elite. These service-providers boast having achieved near-impossible feats in order to accommodate their clients’ needs, and achieving the impossible doesn’t come without a price. Bill Fischer, long-known as the coveted New York travel advisor with the famously unlisted number, charges new clients a one-time initiation fee of $100,000, and annual service fees of $25,000; he says business is booming.

FOX Business got the ‘what,’ the ‘where,’ and the ‘how’ from Fischer and more of the industry’s most exclusive travel connoisseurs on the trends and tips the jet-setting crowd adhere to when booking their joyful jaunts, so you can travel more like the billionaires this year.

Trend 1: Avoiding the Airport

Airport security, both at home and abroad may be a necessary evil for most of us, but for the super rich, it’s just another inconvenience money can avoid. Private jets–through both shares and ownership–allow rich travelers to skip the lines and hassle of security.

“A lot of people who can afford it will go by private plane because it’s getting more and more difficult to go through the airports—not only in the U.S., but especially coming from overseas back to the U.S.,” says Rudi Steele, a sought-after Naperville, Il.-based travel specialist.

Even if flying by private plane is not an option, affluent jet setters will often go the “meet-and-greet” route, where they are met by someone at the airport who expedites processing through airport security and customs, says Dallas-based luxury travel consultant Jim Strong.

“We make sure we have on-arrival or on-departure, someone there to hold their hand and expedite them through the customs lines and the diplomatic lines and there are services offered to get this done,” Strong says. The service generally runs between $200 and $500, according to Strong, but he says it’s well worth the price. “In the Rome airport, or Heathrow, it can save you hours.”

Trend 2: The Multi-Generation, Multi-Room Requirement

Perhaps one of the biggest advantages of being able to fly private is that you don’t have to worry about cramming the kids into coach. More of the rich and famous are bringing the whole family along when they take a trip, creating quite the booking task for travel advisors.

Virtuoso, a network of high-volume travel agents, reports in its January survey that 63% of its 6,000 members in North America predicted the biggest travel trend for 2011 would be “family and multi-generational travel.”

“I think since 9/11, people just don’t want to leave by themselves; they want to take their extended family with them,” Fischer says. “You could sometimes see four generations traveling at once.”

Traveling with an entourage requires multi-room accommodations, which is no easy feat. Depending upon the size of the client’s entourage, a three to four-bedroom suite at the Four Seasons may not fit the bill.

“We do a lot of private islands, but what our clients like the most is staying at a villa with butler service that is attached to a hotel,” Fischer says. “In other words, there is a hotel component, but the villa is separate and private so you’re getting all the accoutrements of the luxury hotel, but are staying in your own private space.”

Fischer recalls a situation where one of his clients needed a three-bedroom suite in a particular hotel that only had two-bedroom suites. After speaking with the hotel’s general manager, Fischer suggested they knock out a few walls, and sure enough, he got a call back from the general manager telling him, “Bill you have your three-bedroom suite.”

“We are catering to a client that can afford anything; [they] want what they want when they want it, and we’re always saying ‘yes.’”

Trend 3: Exclusivity and Privacy is Paramount

Because the super rich are often in the public eye, planning a getaway that is extremely private is of the utmost importance. This sometimes means staying away from big name-brand hotels and having back-up hotels booked in case the guest-in-question needs a quick escape from prying eyes.

The desire for privacy is also the driving force behind the popularity of renting a private island, experts say; it’s easier to guarantee privacy, and top-notch service when you know you’re the only guest there.

“When you are at a resort, you always wonder if you’re being treated as well as the other guests,” Strong says. “But when you buy the whole island, you know you’re king of the hill.”

Richard Turen, another Naperville, Il.-based travel planner who writes for industry publication Travel Weekly, says boutique and non-chain hotels have grown in popularity for this reason.

He says one of the more intriguing ideas to help provide that sense of seclusion and intimacy has come out of the Alessandro Rosso Group, which has been creating “one-room hotels” in some of the best cities around the world.

“Your key combination is sent to you, there’s a cell phone where you dial one number and you get your butler, and you actually have your own hotel,” Turen explains. “It’s a very interesting thing because you can stay in the best part of Paris or Rome and have it all yourself.”

Trend 4: Once-in-a-Lifetime? Yes, please.

A mundane vacation just won’t cut it for the super rich. Travel advisors say their clients are seeking once-in-a-lifetime experiences, like diving with sharks off the coast of Australia or a traditional Italian meal cooked by a famous chef in her home on the Amalfi Coast.

“These people want authenticity; they don’t want something that’s manufactured, or pushed upon them,” Strong says. “They want it to be natural, authentic, in a memorable scenario that they will treasure forever.”

Fischer says he’s coordinated parties where famed-tenor Andrea Bocelli gave a private performance, and just last weekend, he managed to get a client special tickets to the Grand Prix in Monte Carlo, along with entry to F1 Paddock Club and after parties.

Trend 5: Safety First

In some cases, travel advisors need to accommodate not just a client and the client’s multi-generational family, but the security detail as well.

“People when they have quite a bit of money, the most important thing they want is security,” says Fischer.”So we have people who work for us that we will send to take care of the families. They know the destinations; these are former CIA that work for governments and know the inner workings of the countries.”

In addition to sending the best private security personnel available, Fischer has sent top-notch doctors with clients on trips. For some destinations he has ordered armored vehicles for clients and registered them with the local police departments so they can be provided with a local police escort.

Trend 6: Access—to Any Place in the World

A luxury travel advisor has to be ready for last-minute requests to visit some of the planet’s most exclusive locales. While no corner of the globe is out of reach, the clear standout among this summer’s most popular destinations is Europe, with Italy being the top destination for the wealthy elite.

“You have the parents of teenage children who are very much aware of the educational value of travel, and they definitely want to take advantage of traveling to destinations where children are getting some education,” Strong says.

In addition to travel mainstays on the Mediterranean, safaris are also all the rage.

“Africa is one of those amazing destinations, especially east Africa and southern Africa, mainly for game viewing,” Steele says. “If you go on safari once, you would think you would get it out of your system, but when it comes to Africa and safari, it pulls you back; people go over again.”

Strong says more exotic destinations such as Morocco, China, Vietnam, Laos and Cambodia are all still very popular with clients.

For the beach-going set, places like Fiji and Bali are back and bigger than ever, according to Turen and Steele. Fischer expect travel to Brazil to ramp up as the country readies itself for the 2016 Olympic Games.

For the indecisive industrialist, a cruise may prove a better option, offering the flexibility of multiple port stops. Private yachts that sleep up to 30 people are popular with Fischer’s clients because they can accommodate multiple generations and an entourage.

Finally, for the wealthy with the most severe case of wanderlust, there’s The World. This seafaring sanctuary was referenced by both Fischer and Turen for clients that have the time to travel for longer periods. Turen calls it “the world’s top-rated ship,” and the 644-foot yacht, which launched in 2002, plans itineraries based upon the input of the owners, offering the utmost in luxury service and accommodations. The World boasts itself as the “largest privately owned yacht on the planet,” with 165 private residences, valued between $1.4 and $7.9 million, with about $240,000 in annual fees.

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This is an article from Perspective, The Leading Shared Ownership Magazine, and the article features AARC research that was presented at the Global Networking Expo 2011 for the shared ownership industry (http://perspectivemagazine.com/blog/2011/05/16/interest-in-purchasing-vacation-homes-back-to-pre-crisis-levels)

May 16, 2011

The American Affluence Research Center is releasing its latest data in conjunction with the Global Networking Expo (GNEX) 2011. The data unveiled at the Bahamas event is the latest in a continuing series of twice-yearly surveys that focus on the 11.4 million households that represent the wealthiest 10% of all U.S. households.

The American Affluence Research Center is a private research organization dedicated to providing information about the values, lifestyles, attitudes, investments, and purchasing behavior of the most affluent segments of the U.S. population through both custom and multi-client research studies.

These surveys measure and track how the affluent assess current business conditions and their 12- month outlook for the economy, the stock market, and their personal household earnings. The surveys also monitor the anticipated changes in spending for a variety of different products and services, changes in expected rates of saving, and primary investment objectives. In addition, each survey contains special questions exploring new topics.

Special questions in this edition reveal data on familiarity with the private residence and destination club concepts and current and potential ownership of various types of vacation home access, including whole ownership, timeshares, and private residence and destination clubs. These survey topics and related charts are excerpted in this article. The full study also shows which segments of the affluent will be making a general effort to reduce or defer expenditures during the next 12 months, how the discounts offered in recent years by prestige brands affected their image and sales potential, and how discounts communicated via the internet or mobile devices only to past customers or “members” of “flash sale” sites affect their image and potential sales. The survey also contains a series of questions to identify which segments of the affluent market own mobile devices and which types, the “social media” in which the affluent participate, the use of “social media” to receive regular communications from a manufacturer or retailer for product information, and which “flash sale” sites they are aware of, have visited in the past 90 days, and from which they have ever made a purchase.

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This is an article from Sherpa Report The Guide to Shared Luxury Property by Nick Copley (http://www.sherpareport.com/destination-clubs/increasing-interest-shared-vacation-home-0611.html). The article highlights AARC’s latest research on familiarity and interest in shared vacation property.

June 6, 2011
By Nick Copley

The American Affluence Research Center has been surveying wealthy households twice a year for the past decade. The latest survey shows increasing interest in private residence clubs and destination clubs.

The Spring 2011 survey was carried out in March and is the 19th in a continuing series of twice-yearly surveys that focus on the 11.4 million households that represent the wealthiest 10% of all U.S. households. These households are determined by The Federal Reserve Board based on net worth. The survey was conducted by mail among samples drawn at random, and the questions focus on the future outlook and spending plans of the affluent. The 405 participants in this survey have an average annual household income of $333,000, an average primary residence value of $1.2 million, an average net worth of $3.1 million, and average investable assets of $1.8 million.

About 59% of the affluent say they are not familiar with the concepts of private residence or destination clubs. Familiarity with these types of products is strongest among the younger (59 and under), higher income, and higher net worth groups. Familiarity with these concepts was also identified in the Spring surveys in 2009 and 2007. During this 4 year period, the awareness of destination clubs has increased by 9 points or about a third. Awareness of other products has changed very little.

About 10% of the affluent say they will seriously consider acquiring access to a vacation home during the next 12 months. Wholly-owned homes are the most favored type of vacation home access. Wholly-owned homes used primarily on a seasonal basis are more popular than those used frequently throughout the year. About 2.9% are considering two types of vacation home acquisition, such as a wholly owned or a shared home.

The actual interest in private residence clubs and destination clubs shows strong improvement relative to the results of the 2009 and 2007 surveys. On a relative basis, there is increased interest in access to a vacation home through shared access or fractional ownership as opposed to whole ownership. In fact for the higher net worth (greater than $6m) respondents, there is more interest in both destination clubs and private residence clubs, than in a wholly-owned second home that you use frequently throughout the year.

“The increased interest in private residence and destination clubs may reflect two factors. First, the stock market recovery since the 2009 lows has made the affluent feel better about their spending. Second, the recognition that real estate values do not always go up makes the alternatives to full ownership of a vacation home more attractive.” said Ron Kurtz, President of the American Affluence Research Center.

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This is an article from Mobile Commerce Daily by Rachel Lamb (http://www.mobilecommercedaily.com/2011/05/20/61pc-of-wealthiest-americans-own-smartphones-study). The article references the AARC Spring 2011 survey results regarding use of smartphones among affluent Americans.

May 20, 2011
By Rachel Lamb

Approximately 61 percent of the 22 million wealthiest individuals in the United States own a smartphone, indicating a potentially untapped market for about 8 million smartphones, or 39 percent of the affluent, according to a recent study by American Affluence Research Center.

According to the data, 22 percent of those surveyed own a tablet, meaning that there is a probable untapped market 78 percent of the affluent. The study was able to dissect the ages and demographics of individuals, along with types of devices.

“There is so much talk about pervasiveness of mobile devices, but it’s important to understand who has these devices and how they are using them in order for people to market effectively through them,” said Ron Kurtz, principal of American Affluence Research Center, Atlanta. “It’s interesting that affluent have a smartphone or tablet, so clearly this is a medium in a way to reach people.

“It’s important to know what platform [marketers] need to be communicating through to be convenient and easy to access a brand’s information, and to receive or use an app,” he said.

Participants in the survey have an annual household income of $333,000 and an average primary residence value of $1.2 million. Their net worth is, on average, $3.1 million with investable assets of $1.8 million.

These are the top 10 percent of the wealthiest individuals in the U.S.

Dissecting the affluent

In addition to 61 percent of individuals who actually own a tablet or smartphone, it is said that about 65 percent of the affluent at least have access to smartphones or tablets.

The survey broke down the participants into demographics and type of mobile device used.

For instance, 84 percent of affluent individuals under 50 own a smartphone, whereas only 38 percent of those 60 and up own one.

The study also showed a correlation between income and type of smartphone.

Individuals who earn more than $200,000 per year are almost twice as likely to own a smartphone and have a slight preference for the BlackBerry.

Moreover, those with a slightly lower income, less than $200,000 per year, favor the iPhone.

The study did not see much difference in gender pertaining to preference and ownership of tablets, but four out of five individuals favored the iPad as their chosen tablet.

Predictably, younger individuals are more likely to own tablets and smartphones. Also, the increased likelihood to own a smartphone or tablet has a direct relationship with net worth and income.

Moving forward

Many luxury brands are reluctant to move their marketing into the tablet or smartphone sphere.

However, since 61 percent of the most affluent individuals in America have a smartphone, it seems like brands should be rethinking their strategy.

Some brands, even the most prestigious, are learning.

For instance, French fashion house Chanel is taking one giant leap for iconic luxury brands with the launch of two mobile-optimized sites for its fine jewelry and watch collections (see story).

Still, many luxury brands are beginning to understand the power of mobile applications, mobile-optimized sites and SMS messaging.

These are all ways that luxury brands can use smartphones and tablets to get in touch with their customer base, move products and build loyalty and relationships.

“The smartphone and tablet users are still younger users, which aren’t the absolute key demographic for luxury brands, but it’s a start,” Mr. Kurtz said. “Clearly, it is a channel to which the affluent are connected, though certainly a younger segment.

“Brands need to take this information into consideration and what they’re going to be offering and saying, how they’re going to be saying it and how much they’re going to be spending on these channels and on [mobile],” he said.

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This is an article from the New York Post by Gregory Bresiger (http://www.nypost.com/p/news/business/what_million_fvxkJI98UkJm2gb1hLjKII#ixzz1OcKPkwoE). The article quotes Ron Kurtz about the increase in the number of millionaires in the U.S. in the last two years.

May 28, 2011
By Gregory Bresiger

Americans are crawling back from the depths of the Great Recession. American millionaires that is.

After sinking to a multi-year low following the stock market crash in late 2008 and 2009, the number of US millionaires began to rise as equities rebounded in the US, say officials of private institutes tracking the rich.

“The number of US households with a net worth of $1 million or more, not including primary residence, grew by 8 percent to 8.4 million in 2010 from 7.8 million the year before,” according to a new study by Spectrem Group’s Affluent Market Insights.

Spectrem officials noted that 2010 was the second consecutive year of a rise in the ranks of US millionaires. In 2009 the number of well-heeled also rose by 16 percent. But that followed a very poor year for American millionaires in 2008.

The number of millionaires fell in the year of the market meltdown by 27 percent, Spectrem said. “Many millionaires, because of the losses in their securities, are just starting to get back to pre-2008 levels,” said George Walper, president of the Spectrem Group.

The American Affluence Research Center (AARC) also confirmed that the number of millionaires increased over the last two years after a huge drop in 2008.

“It’s definitely up, and the reason is the rise in the price of securities over the last two years,” said Ron Kurtz, president of the AARC. Kurtz said the number of American millionaire homes stands at some 9.7 million. That’s a rise of about 600,000 since 2007, he said. Last year the number was 9.6 million, according to Kurtz.

Spectrem’s millionaire numbers are a little less optimistic. It also says the peak number of American millionaires was 9 million in 2007. However, Spectrem officials agree that the millionaire numbers are again expanding.

Thomas Stanley, the author of “The Millionaire Next Store” and other books on the wealthy, estimates that some 9 million American households now qualify as millionaires. That is if one includes primary residence and personal effects, according to a spokeswoman.

How did the average person become so filthy rich?

Walper, who notes about 75 percent of American millionaires didn’t inherit their money, cites three main factors: “Hard work, a direct correlation to education and the kind of occupations they choose, especially the entrepreneurial related ones, are the prime factors in creating wealth,” Walper explained.

This kind of person, despite his or her assets, can also be fearful.

And how does one define the well-off in America in 2011?

The Federal Reserve Board, whose numbers most wealth institutes depend on as a starting point for defining the rich, classifies the well-heeled in three groups.

The wealthiest 10 percent of Americans have a net worth of $800,000, the central bank says. The richest 5 percent of Americans have a net worth of some $1.5 million. And the top 1 percent have a bottom line of $6 million or more.

So who is the “average” rich person?

He or she is usually someone who is married with children. The person is usually in his or her 50s or 60s or beyond, Spectrum Group says.

This average rich person, according to the American Affluence Research Center, has an average net worth of $3.1 million, has a primary residence of $1.2 million and investable assets of $1.8 million.

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June, 2011 – This Luxury Daily article features AARC research on how the decline in consumer confidence is not particularly relevant to the luxury industry (http://www.luxurydaily.com/low-consumer-confidence-does-not-affect-luxury-consumers-study/).

By Rachel Lamb

Consumers’ short-term outlook on business, the economy and gas prices have led to a purchasing slump and pessimistic outlook in May, but this may not apply to luxury consumers.

Although spending confidence was up in April, research from the Conference Board Consumer Confidence Index has shown that certain factors in the environment and economy have made consumers hesitant when it comes to spending. However, these factors do not affect the truly wealthy American consumers.

“It’s a variety of factors, because we haven’t had any significant job growth and there hasn’t been robust growth that we’ve been accustomed to after a recession like this,” said Lynn Franco, director of Consumer Research Center, New York. “The high gas prices also accounted for diminishing purchasing power.

“We saw that there wasn’t a huge change in consumer conditions and hasn’t been a change in the pace of economic growth,” she said. “The recession is having a greater impact on consumers who are on a tight budget and influenced by increases in food and gas, while high-end consumers are not very influenced by it and are better financially positioned are more likely to spend.”

The monthly Consumer Confidence Survey is based on probability-design random sampling and is conducted by Nielsen Co.

The survey provides information and analytics around what consumers buy and watch.

Comfortable luxury consumers
Although things are looking grim for the average consumer, this may not have any effect on the luxury consumer.

Ron Kurtz, president of the American Affluence Research Center, agrees with Ms. Franco and her analysis of the study.

“The decline in consumer confidence of the general public is not particularly relevant to the luxury industry,” Mr. Kurtz said.

“Only a small portion of the population, perhaps as little as the wealthiest 1 percent of United States households, are the foundation of the luxury industry and they are not that concerned by those issues,” he said.

The Index stands at 60.8 – of 100 – down from 66 in April. Furthermore, the Expectations Index declined from 75.2 from 83.2 last month.

Furthermore, consumers’ assessment of the current economy and conditions are more pessimistic than last month.

For instance, those claiming that business conditions are “good” decreased from 15.5 percent to 14.6 percent, and those claiming business conditions are “bad” increased from 35.9 percent to 37.1 percent from last month.

Consumers analyzing the job market found it was less favorable than last month. An increase from 42.4 percent to 43.9 percent stated that jobs are “hard to find,” where those stating that jobs are “plentiful” went from 5.6 percent to 5.1 percent.

Looking forward
The truly affluent are less likely to worry about economic recessions, as they were never truly affected.

However, studies from American Affluence Research Center showed that wealthy consumers were ready to spend again (see story).

“Our spring survey of the affluent showed they are returning to higher levels of spending and this is showing up in the reported sales and profits of upscale retailers and brands in recent weeks,” Mr. Kurtz said.

Indeed, strong numbers from powerful luxury brands such as Louis Vuitton, Gucci, Saks Fifth Avenue, Hermes and LVMH Moet Hennessey Louis Vuitton showed extremely high numbers in the first quarter (see story).

“Brands should focus on the importance of focusing their efforts on the small segment of the population that can afford and appreciate true luxury products,” Mr. Kurtz said.

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