November, 2011 – This Travel Weekly article features AARC research about how the affluent plan to increase their cruising plans for 2012 (http://www.travelweekly.com/Cruise-Travel/Wealthy-consumers-step-up-cruising-plans/).

By Donna Tunney

Plans to cruise during the next 12 months rose to 18% of the wealthiest U.S. households, up from 15% last spring and 12% in the fall of 2010, according to a survey by the American Affluence Research Center.

According to the center, 11 million households qualify as affluent; 18% represents about 2 million households, meaning that about 4 million people from that category will cruise during the next 12 months.

The groups most likely to cruise are those with a net worth of more than $6 million (32%), those with income above $200,000 (21%), and those age 60 and older (20%).

Only 13% of the under-50 age group indicated plans to cruise, while 16% of the 50-59 age group plan to do so during the next 12 months.

The American Affluence Research Center has been conducting twice-yearly studies of the wealthiest 10% of U.S. households since 2002.

The latest report is based on 499 male and female survey participants who have an average annual household income of $282,000, an average net worth of $3.1 million, average investable assets of $1.7 million, and a primary residence with an average value of $1.1 million.

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November, 2011 – This Sea Trade Insider article features AARC research about how the affluent have increased their cruising plans for 2012 (http://www.seatrade-insider.com/News/News-Headlines/Study-finds-affluent-likely-to-cruise-more-in-next-12-months.html).

In a recent survey of the wealthiest 10% of US households, the American Affluence Research Center (AARC) found that intentions to cruise during the next 12 months rose to 18% of the affluent, a 50% improvement over the Fall 2010 survey (12%).

Despite a sharp decline in the respondents’ assessment of current business conditions and their 12-month outlook for the economy and their personal financial situation from the more positive mood evident in the Spring 2011 survey, the intentions to cruise are above the 15% reading in the spring.

Other good news for the luxury cruise lines, said AARC president Ron Kurtz, is that plans to cruise during the next 12 months among their primary source markets—the wealthiest 1% (those with a minimum net worth of $6m) and the more mature (age 60-plus) groups—were at 32% and 20% respectively.

About two-thirds of the affluent say they expect to spend more or the same for international vacation travel during the next year as they did during the prior 12 months.

At 18% of a population of 11.4m households, the estimated number of affluent cruise buyers is 2.05m households or 4.1m total cruisers over the next 12 months.

Kurtz, a former president and chief marketing officer of several cruise lines, noted that ‘this number of affluent cruisers far exceeds the capacity of the luxury lines and indicates the affluent will continue to be an important source of business for the premium and contemporary cruise lines.’

The Fall 2011 Affluent Market Tracking Study, No. 20 in a series of twice-yearly surveys, is based on a national sample of 499 men and women who have an average annual household income of $282,000, an average net worth of $3.1m, average investable assets of $1.7m and a primary residence with an average value of $1.1m.

Information: http://affluenceresearch.org/most-recent-tracking-study/highlights-of-most-recent-survey/.

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October, 2011 – This article from The Fiscal Times features data about the growth for the wider luxury industry (http://www.thefiscaltimes.com/Articles/2011/10/07/9-Must-Have-Status-Symbols-that-Say-Im-Rich.aspx#page1).

By Drew Gannon

Take walk down Fifth Avenue, Michigan Avenue or Rodeo Drive, and you might think Louis Vuitton had finally had a sale. Block by block, the signature brown bags fill the streets. Never mind that the bags in the Spring 2011 collection start at $2,930 for a small clutch, and go up to a whopping $35,500.

With sales up 23 percent from last year to $23.4 billion, Louis Vuitton is setting the tone of growth for the wider luxury industry. In 2011, spending on premium items and services is expected to rise 8 percent over last year to $359 billion, according to an annual survey by American Express Publishing and Harrison Group.

But the big players are not just the barons of Wall Street, sports, and entertainment.

“America’s top one percent – a little over one million households with a net worth of six million plus – are spending on luxuries,” says Ron Kurtz, president of the American Affluence Research Center. “But the bigger growth has come from the BRIC markets – Brazil, Russia, India and particularly China.”

China, the deus ex machina of the luxury market, is expected to account for 20 percent (roughly $27 billion) of global luxury sales by 2015, according to research by McKinsey, as the Chinese shift their consumption preferences from generic goods and materials to the status of internationally well-known brands. China’s unprecedented wealth has bolstered consumer confidence throughout the country; the fifth annual China Luxury Summit in December 2010 was aptly titled “China Luxury Market: An Oasis of Hope and Possibility.”

In the U.S., despite the belt-tightening across most of the country, wealthy Americans are starting to enjoy the good life once again, buying high-status items and services they had cut out of their 2009 and 2010 budgets. Indeed, rich Americans’ expenditures on luxury are set to rise $26.6 billion this year.

Whether such optimism will trickle down to the middle class is to be seen. Overall spending is still at a standstill, with consumer confidence declining sharply in August. Online shopping and social media may be the key to bringing up luxury sales in the United States as well as abroad. A recent study by Italian luxury foundation Altagamma found online sales (now only 2.6 percent of the market) growing at a rate of 20 percent a year as luxury brands multiply their friends on Facebook and activity on other social media sites.
Here are nine popular purchases helping wealthy consumers live high. Some people just can’t live without their Louboutins.

1. Swanky Strollers
Think a stroller is just a way to transport your kids? Think again. The mommy wars are being played out on the playground, with parents sizing up each others’ wheels. High-end strollers like those by the Bugaboo brand are flying off the shelves, and run anywhere from $500 to $2,000. One Bugaboo model that converts from a single stroller into a side-by-side double has a $1,659 price tag, and a waiting list to buy one. Another stroller by Kid Kustoms has a vinyl leather seat and optional iPod speakers, for a mere $3,500. Celebrities like Naomi Watts and Gwen Stefani have been spotted pushing around expensive Bugaboo prams, and their popularity has spread to suburban streets across the country.

2.Specialty Bikes
Biking became more popular in the last year, with bike sales rising 15 percent between 2009 and 2010, according to the Bicycle Manufacturing Association. But the bikes that are gaining the most popularity? Pricy, custom-built bikes. Specialty bike retailers command only 14 percent of the market, but 44 percent of the dollars, according to the National Bicycle Dealers Association. For example, custom bicycle company KGS Bikes does an elaborate three-hour fitting session, and has sold bikes for as much as $32,000. “I’ve seen growing demand,” says KGS Bikes’ owner Kevin Saunders. “My customers want a bike that is perfect for them.”

3. Designer Fashion
Last year, Carolina Herrera reported that, to her pleasant surprise, her $7,990 gray sequined ball gowns were “selling like hotcakes.” Other top designers have also reported stellar earnings, including Louis Vuitton (up 23 percent from 2010 to $24.3 billion), Hermes (up 41 percent to $11.9 billion), and Chanel (up 23 percent to $6.8 billion). The king of American style, Ralph Lauren, has seen his $13 billion-valued company’s stock grow 150 percent in the two years since June 2009. Sales for Ralph Lauren’s heritage Rugby brand jumped 34 percent last year after an online-only fashion show where online shoppers could purchase items in real time. High-end department stores and online designer sale sites have snagged some of the profits as well. Saks reported quarterly earnings up 50 percent and sales up nine percent ($726.7 million) in May this year, thanks in part to a boost in full-price sales.

4. Fine Wines
Forget two-buck chuck. Nielson Co. reporting a 4.1 percent rise in total U.S. wine sales to $9.32 billion this year, but wine priced $20 plus saw an even larger increase in sales (11 percent), demonstrating that pricier wines are becoming more popular. In its 22nd Annual Restaurant poll, Wine & Spirits magazine found the average price for the most popular wines in restaurants was $62. One of the magazines’ most popular restaurant brands, Duckhorn Vineyards, boasts an array of reds, including a 2007 estate-grown Rector Creek Vineyard Cabernet Sauvignon, which goes for $95 per bottle.

5. The Fur Effect
Fur is in, according to America’s top fashion magazines. Many September issues– including long-time fashion bible Vogue – featured fur and faux fur as the next big thing for the coming cold. According to them, fur goes with and on anything, from apparel like vests and coats, to accessories like purses and even shoes. Global retail sales for fur were up 5.4 percent to $14 billion in 2010, according to the International Fur Trade Federation. Alexander Wang’s fur sandals sell for $895 a pop. And while just this month West Hollywood becomes the first U.S. city to ban all fur sales, fur’s popularity continues to rise as the temperature falls.

6. …to Furry Friends
American pets are living the good life – sometimes even better than their owners. In 2010, Americans spent a record $55 billion on their pets, according to research firm Packaged Facts, more than the gross domestic product of many countries. Gourmet pet food tasty enough for humans to eat (think duck and quinoa) and premier pet care facilities like the Barkley Hotel and Day Spa, are popping up everywhere. Packaged Facts estimates that pet insurance sales, which rose 27 percent from 2008 to 2009 to $303 million, will reach $881 million by 2014. By the end of 2010, one in five Fortune 500 companies offered pet insurance by Veterinary Pet Insurance (VPI), the industry’s largest provider. Expensive designer dogs, like “teacup” dogs as well as hybrids between two breeds are growing more and more popular, and can cost thousands of dollars. Celebrities buying into the designer dog trend include Mischa Barton with her Shih Pom (cross between a Shih Tzu and Pomeranian) and Jessica Simpson with her Maltipoo (cross between a Maltese and Toy Poodle). But pure breeds have also kept their place on the upper crust. An 11-month old red Tibetan mastiff named Big Splash became the world’s most expensive dog after being sold to a Chinese millionaire for 10 million yuan, or $1.5 million.

7. Fast Cars
Despite the doom and gloom in Detroit, the luxury car sector is revving its engine. In July, Mercedes-Benz reported its highest monthly sales growth (16.7 percent) since 2006, with 21,065 cars sold. Still, BMW outsold its competitor that same month by over 5,000 vehicles, an 11.7 percent increase from sales on year prior. BMW’s SAV, a midsize SUV starting at $37,000, led the pack, with sales up 56 percent in 2011. And the high-end Z4 Roadster was BMW’s third highest selling vehicle, up 92.4 percent in July from the previous month. U.S. News & World report named the Z4 one of the best luxury cars of 2011, describing it as a car suited for drivers more interested in luxury than performance. The Z4 sells for between $47,450 and $62,500.

8. Cruising Through Life
An estimated 73.7 million Americans will travel outside the United States in 2011, estimates Business Monitor International in last month’s United States Tourism report. And while air travel sales remains on a perpetual roller coaster of ebbs and flows, cruises have grown more popular for wealthier Americans this year. Business Monitor International reports that in 2011, 9.6 million will have traveled outside of the United States by cruise. The Cruise Line International Association plans to welcome 22 new ships to its 25 lines, including the 3,690-passenger Carnival Cruise Lines’ Carnival Magic, launched in May 2011. A 12-night stay in the Mediterranean on luxury cruise liner Celebrity Solstice costs $9,299 per person.

9. The Bling
Rolex, recovering from a 14 percent decline in brand value last year, is making a comeback. Sales are up 11 percent to $5.3 billion this year, making it the sixth most powerful luxury brand according to consulting firm Millward Brown. The Rolex Presidential Day-Date watch has long been considered a quintessential luxury item, worn by celebrities and several U.S. Presidents from Roosevelt to Reagan, and costing upwards of $35,000 depending on its materials and dealer. Rolex’s signature men’s watch has now opened its doors to women, with InStyle featuring Jennifer Aniston and Courtney Cox among others wearing the brand. Other jewelers have also seen strides in the last year. Milward Brown ranks French jeweler and watchmaker Cartier fifth on its luxury list, up 34 percent to $5.3 billion net worth. Tiffany & Co.’s American sales rose 22 percent in the first half of 2011.

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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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In contrast to the March general Consumer Confidence Index of The Conference Board, which fell over 10% to the low levels last seen in Fall 2010, the affluent, who account for about half of all consumer spending, report a better outlook for the economy and their personal spending plans in a new Spring 2011 survey by the American Affluence Research Center.

Spending plans for all 17 products and services tracked by these twice-yearly surveys of the wealthiest 10% of US households are much stronger than in the Fall 2010 survey. There is also improvement in the plans to make major expenditures such as for a new auto, a cruise, and a vacation home. These results are consistent with reported sales during the first quarter of 2011.

Given the 11.4 million households represented by this survey, it can be estimated that the market segment represents potential purchases during the next 12 months of 2.4 million autos, 1.5 million home remodeling projects, 1.7 million cruise buyers (total of 3.4 million cruisers), 422,000 vacation homes, and 536,000 primary residences.

Men, those with a $6M+ net worth, and those under age 50 are the most likely to plan the acquisition of one or more of the 8 major expenditures listed. Most of the items have relatively large variations within age, income, and net worth segments. Reflecting a substantial amount of possible additional purchases, the “undecideds” or “don’t know” respondents are relatively numerous for autos (10%), cruises (8%), remodeling (5%), acquisition of a primary residence (4.1%), and acquisition of a vacation home (5.4%).

With the exception of the dining in casual/family restaurants index, which was unchanged, the index for all of the categories rose from the Fall 2010 survey, typically by 7 to 9 points.

The improvement has come primarily from increases in the “same” category and declines in the “less” category rather than increases in the “more” category.

In 16 of the 17 categories, two-thirds or more plan to spend the same or more during the next 12 months. There were 12 such categories in the Fall 2010 survey.

Domestic vacation travel continues to be the strongest category. Most of the categories are now higher than the Spring 2010 survey, when evidence of “frugal fatigue” first appeared in the surveys, and back to the levels of Spring and Fall 2008. The overall average is the highest it has been since 2008.

In 16 of the 17 categories, the segment with the strongest spending indexes is the under age 50 group. The differences within the gender, income, and net worth groups are generally minimal.

In general, the categories of services (vacation and leisure activities) appear to have somewhat better prospects than the other categories of tangible products. All three group spending indexes (home durables, leisure, and vacation travel) increased from the Fall 2010 levels, with the vacation travel category showing the most improvement and the other two groups up slightly less. All three groups are essentially back to 2008 levels.

Participants in the American Affluence Research Center 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.

A description of the Spring 2011 survey methodology and other detailed highlights of the survey can be viewed at:
http://affluenceresearch.org/most-recent-tracking-study/highlights-of-most-recent-survey/

Posted in Cruises, Entertainment & Recreation, Fine Jewelry & Watches, Home Entertainment Equipment, Home Furniture & Furnishings, Home Purchases & Remodeling, Luxury Market & Goods, Restaurants & Dining, Travel, Vacation Homes, Vacations | No Comments »

April, 2011 – This Luxury Daily article discusses Audi’s strategy is to gain exposure and to develop a good feeling among the affluent audience (http://www.luxurydaily.com/audi-taps-stephen-colbert-to-win-fans-in-sailing-sponsorship/).

By Rachel Lamb

German automaker Audi has partnered with Stephen Colbert in the Charleston Bermuda sailing race where the comedian will be the honorary captain of the boat.

Sailing, similar to polo, golf and tennis, attracts an affluent audience. Audi is using a popular figure to build awareness throughout the event and attract fans more likely to buy its products.

“Audi has a long-standing relationship with Stephen Colbert and is happy to support him on his race to Bermuda,” said Andrew Lipman, communications manager at Audi of America, Hernon, VA.

“Mr. Colbert is an Audi driver and over the years we’ve worked with him in various capacities,” he said. ”Audi is a brand that stands for progressive luxury and redefining the affluent experience, and Mr. Colbert reaches an audience that is like-minded.

“The partnership is a natural fit. With Mr. Colbert, Audi is giving enthusiasts another reason to enjoy the brand and have fun with the experiences Audi offers.”

The partnership was made public at the New York Auto Show on April 20 in a presentation with Mr. Colbert and Audi of America president Johan de Nyschen.

Off to the races
“The Audi” yacht will feature the trademark Audi rings on its sail. It is a 65-foot-long ocean-racing yacht.

The Charleston Bermuda Race, beginning May 21, will travel around the infamous Bermuda Triangle.

Besides Audi, other sponsors include Gosling’s Black Rum, Garden & Gun and Chelsea Clock.

The biennial race is said to have been one of the most difficult races in the Western hemisphere.

This is Mr. Colbert’s second time competing in the 777-mile race, but his first year as “Morale Officer.”

The race kicks off in Charleston Harbor, SC, and ends in Bermuda. A three-day celebration will follow.

Audi will provide real-time updates on Mr. Colbert’s progress as he crosses the Atlantic.

The Charleston Bermuda Race Facebook page includes additional information about the event, including a promotion with Steven Colbert from his show, “The Colbert Report.”

“Sailing competitions attract a very affluent audience of fans and participants,” said Ron Kurtz, principal of the American Affluence Research Center, Atlanta.

“The brand’s strategy is to gain exposure and to develop a good feeling among the affluent audience and participants in this event,” he said.

Audi toity
Old-world sports such as racing, sailing, polo and golf have been frequently linked to affluent consumers.

For example, Hugo Boss dedicated a mobile application to let consumers follow the brand’s journey during the Barcelona World Race 2010/11 via videos, images, blogs and tracking the voyage on a map (see story).

Meanwhile, Rolex used its sponsorship of US Sailing Rolex Miami OCR Olympic and Paralympic championships to reach affluent, athletic males that represent the brand’s target audience (see story).

“This gives [Audi] a connection with and exposure to an affluent audience and the participants that appreciate the corporate support that is necessary to fund such events,” Mr. Kurtz said.

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Contrary to popular perception, affluent Americans do not spend lavishly on luxury hotel suites on Park Avenue.

In ground breaking research on the definition of luxury and the spending habits of the wealthiest 10% of US households, respondents to a survey by the American Affluence Research Center were asked to specify the most they could imagine spending for 37 various products, including a hotel room for one vacation night in New York City.

For both men and women across various high net worth levels, the overall median amount survey respondents could imagine spending for one night of leisure in a NYC hotel is $300. Marriott and Hilton were the top two brands named by those responding with a brand preference.

Surprised that the wealthiest Americans aren’t staying at the Peninsula or the Four Seasons when vacationing in the Big Apple?  Ron Kurtz, President of the American Affluence Research Center, is not.

According to Kurtz, the people most likely to be savoring the finer things in life are the ones with a net worth of $6 million or more and an income of $500,000 or more.  These are the “conspicuous consumers” who, according to Kurtz’s study, indicated a median of $400 when imagining the most they would pay for a night in The City that Never Sleeps.

So what does all of this mean?  According to Kurtz,” about 90% of the affluent are not conspicuous or ostentatious consumers. They spend conservatively and save carefully.”  They choose not to stay at The Plaza or The Pierre, even though they have the funds for suites in these luxury destinations.  Kurtz believes it is these affluent consumers that represent “an opportunity to substantially increase the market for high end luxury products if the affluent can be educated about why they should consider buying them and the brands that offer them.”

Someone please tell The Donald he needs to sell his friends on the value of style, service and exclusivity if he wants to fill those suites at The Trump International.

The national survey included 552 affluent men and women with an average of $304,000 household income, $3.1 million average household net worth, and $1.2 million average value of their primary home.

Tags: Affluence Research, affluent market, Big Apple, Fifth Avenue, high net worth, Hilton, luxury, Luxury hotels, luxury market, luxury research, luxury suites, Main Street, Marriott, millionaires, multi-millionaire, New York City, Peninsula Hotel, Serenity Bed, splurge, The Donald, The Pierre, The Plaza, Trump
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Record low levels of spending for both domestic and international vacation travel are suggested by the most recent survey in a series of twice-yearly studies that began in Spring 2002.

Negative attitudes about the current economy and the economic outlook for the next 12 months are contributing to plans for reducing vacation expenditures by affluent consumers during the next year, according to the Affluent Market Tracking Study #15 conducted by the American Affluence Research Center.

In the Spring 2009 survey of the wealthiest 10% of all U.S. households, plans to cruise during the next 12 months were reported by a record low of only 12% of the luxury consumers. Intentions to cruise have been as high as 22% (Fall 2007 survey) and has typically ranged from 15% to 19% since the inception of these surveys.

Spending for domestic vacations during the next 12 months, in comparison to their spending for such items during the past 12 months, is to be reduced by 30% of the affluent consumers and to be increased by only 13% of the affluent consumers. The remainder (57%) expects to spend the same for domestic vacations during the next year as in the past year.

Spending for international vacations is to be reduced by 44% of the affluent consumers and to be increased by only 13% of the affluent consumers. The remainder (43%) expects to spend the same for international vacations during the next year as in the past year.

To reduce domestic vacation expenses, the affluent are most likely to take fewer trips and to stay in less expensive accommodations compared to the prior 12 months. Fewer trips will be the primary method for reducing international vacation expenses compared to the prior year.

The survey respondents indicated a negative 12 month outlook for business conditions and personal household income. They also reported declines in their net worth, as a result of substantial declines in the value of their home and their investments/savings during the past two years. Together, these factors have contributed to a general attitude toward reducing or deferring expenditures in all areas. The intentions to reduce vacation expenses are consistent with the overall mood of the affluent.

The survey is representative of the population of the most affluent 11.2 million households in the U.S. that account for almost 40% of total personal income and two-thirds of the personal wealth of all Americans.

The 640 men and women included in the national survey have an average annual household income of $290,000, an average primary residence value of $1.2 million, an average net worth of $3.1 million, and average investable assets of $1.4 million. This survey of the affluent market has a maximum margin of error of five percentage points at the 95% confidence level.

These surveys track how affluent consumers assess current business conditions and their 12-month outlook for the economy, the stock market, personal household income, and their spending plans for different products and services that include major appliances, home computers, furniture/furnishings, home entertainment equipment, casual and upscale dining out, entertainment, recreation, domestic and international travel, designer and non-designer apparel, collectibles, fine jewelry, and political and charitable contributions.

* * *

Ron Kurtz is President of the American Affluence Research Center, which provides marketing research and mailing lists of affluent consumers to prominent companies targeting the affluent market.

AARC is an independent, private research organization dedicated to providing reliable marketing 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 surveys.

Ron’s experience includes over 20 years in senior management positions in the airline, hotel, and tour business. As the founding President of Sea Goddess Cruises, he created the product category of small deluxe ships for the very affluent. He also served as the chief marketing officer of four cruise lines, including Norwegian Cruise Line and Windstar Cruises.

Ron has been a key contributor to 6 start ups and 11 turnarounds of substantial businesses. He earned his MBA at Harvard Business School.

The American Affluence Research Center CONTACT: Ron Kurtz at 770-740-2200 or info@affluenceresearch.org. Website: http://www.affluenceresearch.org

Tags: Affluence Research, affluence surveys, affluent market, destination clubs, luxury market, luxury vacation spending, vacation spending
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