It seems, for the affluent community, the dark days are over. We are talking full home ownership, no credit-card debt, and a surplus of cash that is ready to be spent. This is the kind of good news that we cannot get enough of. But there’s more. According to the 2013 Survey of Affluence and Wealth in America, 14 percent of wealthy consumers plan to increase their spending this year, and the majority of it will be spent on travel. This can only mean one thing for you, the travel advisor: more money in your pocket.
The study, co-produced by American Express Publishing and Harrison Group and now in its eighth year, surveyed 1,416 wealthy and affluent U.S. consumers to examine the attitudes, lifestyles and spending patterns of the top 10 percent of wealthiest Americans, based on household income. Survey respondents have a minimum of $100,000 in discretionary income. The research includes projectable analyses of Americans in the top One Percent of the income spectrum.
A Positive Forecast
The research showed that the affluent plan to increase spending for vacations by 10 percent, on luxury hotels and resorts by 17 percent, and on weekend getaways by 14 percent, over last year. Other categories that are showing potential growth are home entertainment and electronics, which are expected to be up 17 percent. Jewelry and watches are anticipated to be up 5 percent and 9 percent, respectively. Automobiles is expected to be on the rise as well, with 28 percent of affluent and wealthy consumers looking to purchase a car this year, which is a 56 percent increase over last year. Perhaps this is the year to suggest that cross-country road trip?
“After six years of reporting on the difficulties of the recession, it is wonderful to finally have a positive forecast in the luxury space. However, consumers will continue to apply due diligence in the purchasing process and will proceed through a lens of need. They will strive to keep their balance sheets in check,” says Cara David, senior vice president, corporate marketing & integrated media of American Express Publishing Corporation. “The study finds that One Percenters save 35 percent of their household income,” says David. “The country is awash in cash. The cash is a hedge against risk. As balance sheets improve—48 percent of the affluent now own their homes outright and 81 percent carry no credit-card debt—they are in a better position to spend on luxury. But those luxuries are carefully considered for the true worth of the quality, craftsmanship and service inherent in a product.”
It seems that the trend to spend on quality is not going anywhere anytime soon. The study shows that resourcefulness has taken two paths. The first is a pursuit of details of distinction and the second is one that is constantly hunting for a deal. “Worth Dominant” consumers are those who are in pursuit of quality, craftsmanship and service. These people are expected to spend $58 billion on core luxuries covered by the study. The “Deal Dominant” consumers will spend $33 billion on those same categories. Sixty percent of the Worth Dominant consumers are looking forward to spending more on luxury this year, compared to the 24 percent of all affluent and wealthy consumers and 14 percent of Deal Dominant consumers.
The study predicts that Worth Dominant consumers will outspend the Deal Dominants in automobiles by 78 percent, restaurants by 71 percent, home furnishings by 288 percent, apparel and fashion by 448 percent, and fine jewelry by 850 percent.