A record low level of cruise purchases by wealthy consumers is 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 fewer cruises by affluent consumers during the next year, according to the Spring 2009 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, intentions to cruise during the next 12 months dropped to only 12% of the affluent consumers, continuing a slide that began in the Spring 2008 survey. Equal to potential cruise purchases by 1.3 million households or 2.6 million total cruisers over the next 12 months, the wealthy consumers will still represent over 20% of the total U.S. cruise market.

Intentions to cruise have been as high as 22% (Fall 2007 survey) and have typically ranged from 15% to 19% since the inception of these surveys. As in prior surveys, those most likely to cruise during the next 12 months are age 60 and over (16%) and those with a net worth of $6 million or more (18%).

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 take fewer cruises are consistent with the overall mood of the affluent market. Over 80% of the survey respondents reported that they had made a general effort to reduce or defer expenditures during the past 12 months, would make a conscious effort to do so during the next 12 months, or had both done so in the past and would continue to do so in the future.

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.

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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, cruise spending, destination clubs, luxury cruise spending, luxury market
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The potential market for vacation homes, including full ownership and private residence and destination clubs, has declined substantially from 2007 levels, reflecting losses in net worth and a negative 12-month outlook for the economy and personal income among the wealthiest 10% of US households surveyed in March 2009.

The American Affluence Research Center has studied this market every 2 years since 2005. The new Spring 2009 survey report includes relevant comparisons to the 2007 survey results.

About 60% of the affluent target market indicates no familiarity with either the private residence or destination club concepts, which represents little or no change from the 2007 survey. Familiarity with the concepts does vary by demographic segment of the affluent.

Among those familiar with the concept, 72% did not name a brand of private residence club with which they are familiar and 82% did not name a brand of destination club with which they are familiar. The majority did indicate recognition of one or more of the 9 brands listed for each concept.

The incidence of access to wholly-owned vacation homes and time share, private residence club, and destination club units was essentially the same as in 2007. Reported plans to seriously consider purchase of one of these options during the next 12 months are about half what they were in 2007.

This new report (21 pages, including 19 tables), provides the following market insight:

• The brands/companies in both businesses with which the affluent report familiarity and how this has changed since 2007.

• The brands/companies in both businesses that the affluent recognize and how this has changed since 2007.

• Which segments of the affluent have the highest level of familiarity with the two concepts and with the brands in each business.

• Current ownership among the affluent of wholly-owned vacation homes and time share, private residence club, and destination club units.

• Plans by the affluent to seriously consider purchase during the next 12 months of wholly-owned vacation homes and time share, private residence club, and destination club units.

• Which segments of the affluent have the highest level of ownership or access to a vacation home and which are most likely to consider such an acquisition during the next 12 months.

• The current estimated value of wholly-owned vacation homes and how the values compare to the value of their primary residences and to vacation home values in 2007.

• The usage of vacation homes throughout the year versus seasonally.

• The distance between the primary residence and the vacation home.

Unlike other affluent and luxury market research that is based on surveying online panels of people who are compensated for responding to regular and frequent surveys, our unique direct mail study is based on samples drawn at random from, and representative of, the select population of the wealthiest 10% of US households.

This report is based on the responses of 640 men and women from households with an average income of $290,000, an average net worth of $3.1 million, and average investable assets of $1.4 million. The average age is 56 and 58% are males.

Tags: Affluence Research, affluence surveys, affluent market, destination clubs, luxury market, private residence ownership
Posted in Affluence Research, Home Purchases & Remodeling, Vacation Homes, Vacations | No Comments »

In the latest of the twice yearly surveys of the most affluent 10% of US households by The American Affluence Research Center, the respondents were asked to specify the most they could imagine spending for 37 different products and services if they were to purchase the item during the next 12 months. They were also asked to name the brand they would most likely purchase. The goal was to identify how the affluent define luxury, in terms of price points and brands, for each of the products.

The minimum and maximum price points reported in this new survey, though realistic for many of the products, should probably be dismissed as being rather “extreme”. The median value, which is the mid point (not the average) of all the values/prices reported, seems to be very realistic for all 37 products and services, if not a bit low, given the affluence of the respondents. It is important to note the relative degree of consistency between women and men in the median values for most of the 15 products where they both gave opinions.

For a European cruise, the median value was $300 per night per person. This was true for the responses of both males and females. The lowest price suggested was $60 (men) and $100 (women). The highest price was $10,000 (men) and $20,000 (women).

Less than a quarter of the respondents named the cruise brand they would most likely purchase. Among those that did, the most frequently mentioned brands were Royal Caribbean (18%) and Princess (17%).

The AARC research has consistently shown over the years that the affluent represent over 3 million cruisers per year and that most of their cruises are with companies that would be considered premium or contemporary brands. The price points and brands reported in this new survey are consistent with prior survey findings.

The Fall 2008 Affluent Market Tracking Study #14 is a national survey representative of the wealthiest 11.2 million households (as defined by net worth in the most recent Federal Reserve Board research). The 552 survey participants have an average income of $304,000 and an average net worth of $3.1 million.

The results of this research demonstrate that surveys that attempt to measure spending on “luxury” items are useless, at best, and dangerously misleading, at worst, if “luxury” is not precisely defined by specific price points. The same appears to be true for surveys that attempt to identify “luxury” brands without specifying price points to define “luxury”.

Survey highlights are posted at www.affluenceresearch.org

AARC provides marketing research, mailing lists, and consulting services to businesses that focus on the affluent. For more information: Ron Kurtz at KurtzGroup@comcast.net or 770-740-2200.

Tags: Affluence Research, affluence surveys, luxury travel
Posted in Affluence Research, Cruises, Luxury Defined, Luxury Market & Goods, Vacations | No Comments »

In the latest survey of the most affluent 10% of US households by The American Affluence Research Center, only 14% of the respondents indicated plans to cruise during the next 12 months. This is the same as the level recorded in the Spring 2008 survey and effectively the historic low for this series of twice yearly surveys, which were started in Spring 2002.

Those most likely to cruise are age 60+ (18% of this group) and those with a net worth of $6 million or more (29% of this group). Given that these surveys are representative of the 11.2 million US households that comprise the wealthiest 10% of all households, this market segment represents the potential of 1.6 million cruise buying households (for 3.2 million cruisers).

The AARC research has consistently shown over the years that the affluent represent over 3 million cruisers per year and that most of their cruises are with companies that would be considered premium or contemporary brands. This survey included a series of questions for which the goal was to identify how the affluent define luxury, in terms of price points and brands, for each of 37 different products and services. The price points and brands reported in this survey for a European cruise are consistent with prior survey findings.

The Affluent Market Tracking Study #14 is a national survey representative of the wealthiest 11.2 million households (as defined by net worth in the most recent Federal Reserve Board research). The 552 survey participants have an average income of $304,000 and an average net worth of $3.1 million.

Survey highlights are posted at www.affluenceresearch.org

AARC provides marketing research, mailing lists, and consulting services to businesses that focus on the affluent. For more information: Ron Kurtz at KurtzGroup@comcast.net or 770-740-2200.

Tags: Affluence Research, affluence surveys, cruise travel
Posted in Affluence Research, Cruises, Vacations | No Comments »

In the latest of the twice yearly surveys of the most affluent 10% of US households by The American Affluence Research Center, the respondents were asked to specify the most they could imagine spending for 37 different products and services if they were to purchase the item during the next 12 months. They were also asked to name the brand they would most likely purchase. The goal was to identify how the affluent define luxury, in terms of price points and brands, for each of the products.

The minimum and maximum price points reported in this new survey, though realistic for many of the products, should probably be dismissed as being rather “extreme”. The median value, which is the mid point (not the average) of all the values/prices reported, seems to be very realistic for all 37 products and services, if not a bit low, given the affluence of the respondents. It is important to note the relative degree of consistency between women and men in the median values for most of the 15 products where they both gave opinions.

For a room in the winter in a Caribbean resort, the median value was $300 for men and $250 for women. The lowest price suggested was $50 (men) and $60 (women). The highest price was $3,000 (men) and $1,500 (women).

Only a third of the respondents named the brand they would most likely purchase. Marriott (20%) and Ritz Carlton (9%) were the two mentioned most frequently.

For a hotel room for a New York City vacation, the median value was $300 for both men and women. The lowest price was $50 for men and $100 for women. The highest price was $1,000 for both men and women.

Only a third of the respondents named the hotel brand they would most likely buy. Marriott (27%) and Hilton (16%) were the two brands mentioned most frequently.

For a European cruise, the median value was $300 per night per person. This was true for the responses of both males and females. The lowest price suggested was $60 (men) and $100 (women). The highest price was $10,000 (men) and $20,000 (women).

Less than a quarter of the respondents named the cruise brand they would most likely purchase. Among those that did, the most frequently mentioned brands were Royal Caribbean (18%) and Princess (17%).

The AARC research has consistently shown over the years that the affluent represent over 3 million cruisers per year and that most of their cruises are with companies that would be considered premium or contemporary brands. The price points and brands reported in this new survey are consistent with prior survey findings.

The Affluent Market Tracking Study #14 is a national survey representative of the wealthiest 11.2 million households (as defined by net worth in the most recent Federal Reserve Board research). The 552 survey participants have an average income of $304,000 and an average net worth of $3.1 million.

The results of this research demonstrate that surveys that attempt to measure spending on “luxury” items are useless, at best, and dangerously misleading, at worst, if “luxury” is not precisely defined by specific price points. The same appears to be true for surveys that attempt to identify “luxury” brands without specifying price points to define “luxury”.

Survey highlights are posted at www.affluenceresearch.org

AARC provides marketing research, mailing lists, and consulting services to businesses that focus on the affluent. For more information: Ron Kurtz at KurtzGroup@comcast.net or 770-740-2200.

Tags: Affluence Research, luxury travel
Posted in Affluence Research, Luxury Defined, Luxury Market & Goods, Travel, Vacations | No Comments »