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 Ron Kurtz, a principal with The American Affluence Research Center and
a veteran of the luxury cruise industry, has some assertive things to
say about all this measuring. He also shares the results of his latest
survey of how the affluent plan to behave in the next year.
Who’s Affluent Anyway?
“People have different agendas for why they push certain definitions of
the affluent,” says Kurtz. “Some want to define on the basis of income,
others on net worth and still others on investable assets.”
Kurtz comes down squarely in the camp of net worth, believing “it’s a
reflection of cumulative years of income and spending.” He notes that,
“Income can be subject to substantial swings. We are now seeing the
problems with defining affluence on the basis of income as some people
on the fringes are really getting hurt; people with solid net worth are
weathering the storm better.”
“I believe that affluence is by definition a small segment of the
population, asserts Kurtz; “I don’t believe in the concept of mass
affluence and think that we should be selective. That’s why I chose the
top 10 percent as being reasonably selective – and that is where you
find the largest concentration of wealth. People earning $100,000 to
$150,000 a year are not affluent.”
How the Downturn Is Affecting the Outlook of the Affluent on Travel
Kurtz recently completed his spring 2008 survey . As always, he asked
467 subjects what their outlook is for the next 12 months as far as
business conditions, the stock market, their own household income.
Overview of Top 10 Percentile of U.S. Households
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99 to 100 percentile
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95 to 99 percentile
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90 to 95 percentile
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Number of Households (millions)
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1.1
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4.5
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5.6
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Minimum Net Worth (millions)
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$6.00
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$1.39
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$0.83
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Average Net Worth (millions)
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$15.3
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$2.7
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$1.1
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Average Annual Income (thousands)
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$982
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$248
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$120
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- Kurtz has the number of respondents saying they will take a
cruise in the next 12 months falling to 14% from 22% last fall – the
latest number being the lowest ever in Kurtz’s more than six years of
surveys.
- Last fall, the AARC index was at 103 on the question of spending
more, the same or less for international vacation travel That number
fell to 95 this spring; the numbers for domestic vacation travel were
116 last fall, 112 this spring.
- The indexes for both Leisure and Vacation Travel Spending were
down from the Fall 2007 survey by five and six points, respectively.
They are both also at their lowest levels since the Spring 2003 survey.
- “People are moving away from international travel,” concludes Kurtz.
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Issues & Insights 
