I recently attended a presentation hosted by Dr. Jim Taylor, vice chairman of Harrison Group and Cara David, senior vice president of corporate marketing and integrated media of American Express Publishing, to hear about how the wealthy have been affected by the economic downturn.
The “Annual Survey of Affluence and Wealth in America,” as the yearly presentation is called, culls information from a group of Americans (1,300 this year) representing the country’s highest earners; all respondents pull in a minimum of $100k in discretionary income (income after tax, mortgage, home maintenance and child education). If you want to read about how they’re spending that money now that the market’s tanked, read my article on our sister site, Luxist: “How The Wealthy Are Spending Their Money This Year.”
On to more important things: How the wealthy are traveling.
Of these 1,300 affluent Americans, 78% of whom say that the crisis has affected their sense of financial security, only 19% anticipate that their weekend getaway spending will increase. But guess what? That’s exactly how many of them said it would decrease. 62% of respondents said that their weekend getaway spending would stay exactly the same. What’s more, “increasers” have been increasing steadily since quarter 2 of 2008, when just 9% anticipated spending more. Rich people: 1, Recession: 0.
Slightly fewer, but still 55% said that their vacation spending wouldn’t change this year in general, but a whole 27% said that it would decrease, on the whole. I smell fear. Point for the recession. A few more, 29% said they planned to decrease their spending at fine hotels and resorts. Rich people: 1, Recession: 2.
In an interesting development, though a full 44% said “My personal travel will be pretty much the same as in recent years,” a winning 46% said “I will stay in the same tier of hotel, but expect to find better deals.” That means the wealthy are being pickier, and when they’re not just spending willy nilly? It’s a consumer’s market. Point for rich people. Frankly, a point for all consumers.
While we’re looking at this data, we must note that only 54% of the affluent Americans surveyed had taken a vacation to a resort destination in the last year … maybe that’s why they have money. They’re working, not jetting off to Spain (only 9% have been there in the last three years). Wanna see where the wealthy are going? Behold their data, courtesy of The Survey of Affluence and Wealth in America, presented by American Express Publishing and Harrison Group:”
The right hand column there is first “Upper Middle Class (UMC) to Super Affluent” responders, and the “Wealthy” percentage refers to those with a discretionary income over $500k. And still, only 18% want to go to Spain. Why doesn’t anyone want to go to Spain?
Also note the low numbers for Australia and South America. Why? Because if you’re not wealthy, you can probably go there for cheaper right now. And if you are wealthy, you can probably get a better deal — it’s a good time to go!
What does the rest of this information mean for all of us? It’s generally good news. The travel plans of the rich aren’t changing that much, so though the recession is tough in all kinds of ways, the travel industry isn’t getting hit too hard — as long as they’re coming up with good values. No one’s saying they’re not gonna travel, but they’re willing to wait longer for better deals. That’s good for everybody. Maybe the vacation that was just out of your reach last year will be within your reach this year.
Oh, and if you’re trying to look wealthy to your friends? Talk about how much you can’t wait for your next Caribbean or West Indies vacation.
Happy Friday, everyone! Don’t forget to stop by The Goose Island Clybourn Brewpub tomorrow if you’re in Chicago — the Gadling team (darn near everyone but me, typing away in New York) will be there! Read “THEY DO EXIST! Meet Gadling next weekend in Chicago” for more info.