Top luxury spending categories for the ultrawealthy, ranked by average annual expenditures in 2005.
The rich don’t just differ from us, they differ among each other, too. “They’re the people who rule the world,” said Doug Gollan, editor in chief of Elite Traveler magazine, referring to the 661 wealthy jet owners surveyed on their spending habits. The group had a median net worth of $41.2 million, while worldwide, there are perhaps 300,000 families with comparable worth. The survey further parses the super-rich niche into three distinct but free-spending personalities: Trendsetters, the largest subgroup, are impulse-driven and like leading the trend curve; winners share their success with others, and connoisseurs, the smallest but highest spending subgroup, covet craftsmanship and object history. Collectively, they’re called the New Jet Set, a group that owns its own planes versus the first-class plane travel relied on by the older jet set of the Fifties. “Luxury marketers should be paying more attention,” said Gollan.
1. Fine Art
Average annual personal spending: $1,746,000
Picasso’s important Cubist painting “Dora Maar au Chat” likely was a $95.2 million New Jet Set purchase this spring at Sotheby’s. Such trophy paintings are typically the realm of winners celebrating a victory or connoisseurs expanding a world-class collection of art. The latter smart set spent an average of $6,433,000 on artworks last year, which are typically rare or original. They also usually work with dealers to build collections or gain access to private viewings.
2. Home Improvement
$542,000
These multiple homeowners shell out lots of money for furnishings, electronics, interior design and renovations, among other perks. From where does the inspiration come? Hotels, resorts and spas they visit. Trendsetters lead the pack in spending, since they usually prefer state-of-the-art kitchens, media rooms and exercise gyms. Connoisseurs, the second-largest group here, tend to do deep research on anything they buy, such as checking out plasma TVs or tracing the architectural history of a Federal-style home.
3. Yacht Rentals
$404,000
Hip photos, such as Kid Rock and Pamela Anderson’s wedding on a yacht off the coast of Saint-Tropez in the spring, do a lot to fuel interest, especially with trendsetters, said the survey. Still, this is strictly a niche category — just 10 percent of the people surveyed rented a yacht last year — a percentage mainly made up of winners celebrating their achievements.
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4. Jewelry
$248,000
Known as fervent style scouts, trendsetters dominate this category. They are wooed by hot brands such as Cartier or Bulgari, as well as invitation-only parties. Winners also are attracted to design exclusivity, such as gorgeous diamond rings given on anniversaries. And connoisseurs consult with gemologists or hunt for limited editions.
5. Luxury Cars
$226,000
Rolls-Royce or Maserati GranSport Coupe anyone? About one-sixth of the New Jet Set surveyed said “yes” to luxe cars like these last year. Half were trendsetters who are wooed by invitation-only test-drives and customer appreciation events that mix art and cars, such as invitations to opening-night galas. Connoisseurs, however, spent the most money ($380,000), and they’re drawn to factory tours, car clubs and on-site custom fittings.
6. Events at Hotels and Resorts
$224,000
Memorable, breathtaking events capture this audience. One gent included in the survey— a winner celebrating the IPO of his travel company — transformed a resort’s pool area into the Spanish harbor from which Christopher Columbus sailed in 1492. Taking over a hotel property and adapting it into a theme is increasingly popular among the wealthy, said the report. One caveat: Connoisseurs consider expertise utmost, making them demanding clients.
7. Villa and chalet rentals
$168,000
Privacy and control sway the New Jet Set’s desires when choosing villas and chalets. They’re largely rented to winners and trendsetters who seek exclusivity, though. The key attribute they’re looking for is location, such as a cliffside villa on St. Barth’s.
8. Hotels and resorts
$157,000
This travel-savvy group spends lots of time in hotels. Trendsetters are drawn to chic properties — a new Ian Schrager hotel opening is an example — with celebrity sightings, heady experiences and high-profile parties. Winners want to take over properties for celebrations. And connoisseurs have encyclopedic recall of hotels and their features, such as private villas with plunge pools or personal concierges. One businessman included in the survey “collected” hotels by visiting every new property opened by a particular hotel chain.
9. Watches
$147,000
Keeping time in style was high on the list last year. About one-third of the people surveyed bought a watch. Trendsetters were on the lookout for notable trends such as new watch casings or collections. Connoisseurs, who favor hand-assembled watches, such as those made by Patek Philippe, spent $223,000 — or nearly three times what trendsetters spent. They collect watches much like they collect art or vintage cars.
10. Cruises
$138,000
Winners rule here. They spent $152,000 last year celebrating anniversaries and birthdays. Like trendsetters, they want exclusive events, such as visiting the Hermitage in St. Petersburg on a private tour while cruising the Neva River. Connoisseurs are interested in the heritage of the liner or noted authors speaking onboard; conversely, trendsetters investigate thread counts in their staterooms or new onboard John Georges dining rooms, said Gollan.
11. Fashion and Accessories
$117,000
Largely dominated by trendsetters, purchases here run the gamut from belts to apparel. This hip group is best reached with invitation-only events, trunk shows and catalogues. “Trendsetters are fashion-forward,” said Gollan. “They have their antenna up to make sure they’re on top.” Connoisseurs generally purchase fashion items within a narrow range, such as a few pieces from a single designer. They want limited editions, and they have intricate knowledge of inner workings of fashion houses. “You don’t want a first-year salesperson talking to them,” he said.
12. Spas
$107,000
Treatments such as color hydrotherapy baths or vapor caves were high on many New Jet Set lists. Some 60 percent of the group, mostly trendsetters, spent money on both destination and day spas. They’re lured by signature services and the newest spa therapy concepts. Connoisseurs, however, want to be educated about new treatments, products and therapists. “They want to know about medicinal benefits and what really works,” Gollan explained.
Source: Prince & Associates/Elite Traveler The new jet set survey of private jet owners.