How the World’s Wealthiest People Travel – Transcript

00:00There are roughly 295,450 people with at least$30 million. Such individuals, referred to as ultra-highnet worth, represent about 0.0037% of the human population, yet they hold about a third,$35 trillion, of the world’s wealth.

00:17Therefore, it’s no wonder why a massive,global industry exists, fully centered on supporting the nomadic lifestyles of the world’swealthiest 295 thousand. As with any socioeconomic class, ultra highnet worth individuals are more likely to socialize with other ultra high net worth individuals,yet intriguingly, the number of people earning and spending similarly to you goes down asyour income goes up.

00:42Therefore, once you get to the top of theincome scale, the scarcity of people like you stretches your social networks out toa global scale. Through the years, this led to the creationof the informal but remarkably systematized so-called “Billionaire’s Social Calendar.” The year often starts on St Barts—the traditionalNew Year’s Eve spot for the wealthiest few—then February might include the Superbowl, andMarch skiing in Aspen or St Moritz.

01:06Spring starts with the Masters Golf Tournamentin Augusta, Georgia, while May includes the Cannes Film Festival and the convenientlyclose Monaco Grand Prix. June’s highlight is the Henley Royal RowingRegatta in England, July’s is Wimbledon, August’s is the Venice Film Festival, whileSeptember often includes a return to Monaco for its yacht show.

01:24October’s the Frieze London Art Fair, Novembermight include a trip down under for the Melbourne Cup, and finally, the last major event ofthe year, before St Barts, of course, is Art Basel Miami Beach. These events are hardly about the events themselves—mostwealthy attendees to Monaco’s grand prix hardly care about the racing and its yachtshow is far more than a sales event for the vessels—but rather they serve as an exclusivespace made available only to wealthy people who want to socialize with other wealthy people.

01:51While few go to all, and each adapts the calendarto their preferences, ultra-wealthy individuals have often expressed a feeling of obligationto join the circuit in order to maintain their social standing. Such pressure may have motivated Jeff Bezos,for example, to start his 2022 as he did— on a yacht off St Barts with his partner,Lauren Sanchez.

02:11Thanks to publicly-available aircraft transponderdata, however, we’re able to see what he did with the rest of his January. Bezos’ pair of G650 jets are too large forSt Barts’ short runway, so they waited on neighboring Saint Martin while the billionairerang in the New Year. Then, on the 1st, N271DV took off for theseven-hour flight to Los Angeles to drop Sanchez off, while the other, N758PB, flew the nextday to take Bezos directly home to Seattle.

02:37Over the next two weeks, both jets regularlyshuttled up and down the west coast between Seattle and Burbank, presumably to take Bezosand Sanchez to visit each other. On January 13th, however, one of the jetsflew from Burbank to Maui while the other flew from Seattle and stopped briefly at LAXbefore continuing on to Maui, presumably carrying Sanchez and Bezos respectively to the billionaire’snew $78 million vacation home on the island, then each jet returned to the mainland fourdays later.

03:02Bezos appeared to visit Sanchez again on the23rd, then four days later flew directly to Washington DC—Bezos owns the biggest homein the District; the largest newspaper in the city; and his company, Amazon, is constructingits second headquarters across the river in Crystal City, Virginia—so he was likelythere for business.

03:19But finally, Bezos finished out the monthby flying back to Burbank, once again—and he did all of this while threading the needlebetween highlights on the Billionaire’s social calendar, as just 11 days later heflew down to LA for the Superbowl. Across January, Bezos’ lifestyle calledfor his G650s to fly 29,000 miles or 46,000 kilometers in total, which is roughly equivalentto flying between Seattle and Sydney four times.

03:41To fuel this extent of travel, his jets usedabout 24,838 gallons or 94,022 liters of fuel, which could otherwise be used to propel thelargest passenger aircraft in the world, an A380, across the Atlantic from DC to Londonwith 500 passengers aboard.

03:58But Bezos’ travel is indicative of the waythat market analysts think ultra-luxury travel is heading. You see, two phenomena are crashing head oninto each other to throw the industry into turmoil. First, more people are getting wealthy thanever, as money is becoming increasingly consolidated at the top, and second, merely wealthy peopleare traveling less frequently than in years past, but spending more than ever.

04:21Data indicate that prior to COVID, Americansspent an average of $4,871 on a trip to Greece, but now, it’s all the way up to $6,561. Airline executives have also jubilantly notedthat first and business class revenue is remarkably strong, despite the continued weakness ofthe traditionally lucrative business-travel segment, mostly thanks to leisure travelersopting to pay the premium for more luxurious travel at a greater rate than ever.

04:46In New York City, the ultra-luxury hotel marketis said to be booming, with all-time high prices and occupancy rates and new super-premiumproperties opening faster than ever. Summer 2022 saw the opening of the highly-anticipatedAman New York, with the cheapest room starting at $2,600 a night, but more regularly pricingin the three or four thousands.

05:07Five years ago, the Aman’s sister property—theUtah desert resort known as Amangiri—started at $1,400 a night, but these days, that’sdoubled to $2,800 a night, and even with dynamic pricing charging a hefty premium for the mostattractive dates, plenty of nights are regularly sold out, even many months in advance.

05:25And of course, for those lucky enough to geta booking at resorts like the Amangiri, they need a way to get there so it’s no wonderthat 2021 saw an all-time record-high number of private jet flights—3.3 million globally. This tremendous growth was in large part enabledby the propagation of the on-demand charter business model.

05:44Companies like Wheels Up, NetJets, and XOhave revolutionized the industry by simplifying one-off charters of private jets, which makesthe means of travel far more achievable for the twice-a-year wealthy leisure traveler. These private jets are serviced by fixed-based-operators,which essentially act as private terminals-for-hire, and these are also observing record traffic,leading to more FBOs being developed, which is pushing up prices for airport real-estateand hangars to an all-time-high as well.

06:08So, as the industry has grown as large asever, it’s simultaneously more expensive than ever and more frustrating than ever toget access to a private jet. Essentially, across the ultra-luxury travelsegment, there’s a capacity crunch. More people than ever are willing to pay morefor a night in a top hotel than most do for a month of rent; or more for a two-hour privateflight than most pay for their cars.

06:32The pace of industry growth is outmatchedby the growth in demand for the segment. The incredible consequence is that the superwealthy have pushed the ultra-wealthy out from their traditional stomping grounds. There simply are not publicly-available travelexperiences expensive and exclusive enough for the wealthiest of the wealthiest anymore,so they’re essentially turning to private everything.

06:54Yachts fulfill this need well—they allowthe ultra-rich to travel on their own terms, bringing the quality of accommodations theyexpect to wherever they want to go, largely regardless of outside demand. But where they want to go is still largelydictated by that Billionaire’s calendar, so each fall, as the temperatures in the Meddrop and the final summer events finish up, a maritime migration begins.

07:17Some of the superyachts push off the dockwith pared-down crews to begin the lengthy transatlantic passage under their own power,and while most yachts are capable of taking on most ocean crossings, it’s an expensive,impractical, and dangerous endeavor. That’s why these exist—yacht-carryingships.

07:34These ships work year-round connecting theworld’s yachting hotspots, but in the fall and spring, it’s all about the transatlanticmigration. So, at the end of the Med season, a delugeof vessels descend on yachting hubs like Genoa, Italy and Palma de Mallorca, Spain to loadup on one of these vessels—their owners paying up to $100 thousand for the convenience.

07:54Upon arrival in the Caribbean, their ownerscan once again access their yachts, providing convenient access to winter events like ArtBasel Miami and New Year’s on St Barts. As with every other segment of the industry,however, the superyacht industry is growing faster than ever, meaning what was previouslya refuge from the constraints of land is finding itself increasingly stuck out at sea.

08:14Take, for instance, a berth at the Yacht Clubde Monaco. First and foremost, it’ll cost you. During the summer season, a night will costthe shortest vessels $275; but if you’d like to dock the same boat during the MonacoGrand Prix, the price skyrockets to over $16,500 a night.

08:32To get one of the few spots that can fit thelargest 60 or 70 meter vessels, it’ll cost $73,000 a night, but even then, the clubhousebuilding blocks the view of the track, so to actually see the race, this fee includesaccess for two to the building itself. But cost is hardly the issue here.

08:49Rather, it’s club membership, which requiresthat you were first sponsored by a member then approved by the admissions committee. Once in, to secure a spot during the Med Season,berth reservations have to be booked months in advance. But for the only event that parallels theGrand Prix in exclusivity, the yacht show, just getting a berth is only half the battle.

09:07When showing your superyacht off to otherattendees, the best spot to dock is here, across the way, so onlookers can take in thefull profile of the vessel rather than just its rear. But getting these spots requires first thatthe yacht is too long to fit in a traditional spot, and that you, or your captain, has astrong relationship with the event directors—relationships that take years to form.

09:29Navigating these busy waters is an expensivepain. Superyacht ownership in general is an expensivepain. Yachts don't actually get someone from oneplace to the next efficiently at all—on the open ocean they’re generally unpleasantlybumpy rides—and yearly costs generally average around 10% of the boat’s value.

09:48Yet, across the board, no matter the length,sales only continue to rise. Anecdotally, the deals cut on the decks ofthese behemoth boats, and the valuable relationships curated at yacht club bars are said to makethe investment worth it. As one new yacht owner told the New Yorker“one deal secured on board will pay it all back many times over.”So, increasingly,the yacht is now perceived as a necessary component of the Billionaire’s social calendar,meaning the same way the wealthiest few are

10:16feeling about private aviation and ultra-luxuryhotels now extends to the yachting world as well. In response, the ultrawealthy are gettingmore creative. Over the past five years, just as overallsales and superyacht builds have risen, the number of superyachts over 40 meters beingrefitted has nearly doubled.