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Researching The Rich - But Who Really Measures UP? Print E-mail

   kurtz.jpg 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

 

99 to 100 percentile

95 to 99 percentile

90 to 95 percentile

Number of Households (millions)

1.1

4.5

5.6

Minimum Net Worth  (millions)

$6.00

$1.39

$0.83

Average Net Worth  (millions)

$15.3

$2.7

$1.1

Average Annual Income (thousands)

$982

$248

$120

 

 

  • 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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From the Editor

Ipsos Mendelsohn and American Express Publishing-Harrison Group
Offer Fresh Insight on Consumer Behavior in 2010


According to new studies from two blue-chip research sources, Ipsos Mendelsohn and American Express Publishing - the affluent are not only ready to travel -- they are frequently going to spend more on it. While the Ipsos study focused on intent and American Express Publishing on mindset, they both point to a surge in affluents taking to the road (Amex sees an increase of 6 to 8% in spending on all luxury categories). Interestingly, both studies agree on a positive attitude despite lingering concerns about the economy. Here's a look at the highlights of both 2010 studies.

LuxuryTravel 360 has long looked to the affluent as a burgeoning market in business and leisure travel, fueling growth in more affordable, common sense luxury - less glitz and glamour, but ready to pay extra for memorable family experiences and genuine local culture.

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