Conventional wisdom says global capitals are the hang out for the Ultra High Net Worth (Net Worth of $30 million +) and their families. And certainly, these are places many of them travel with some frequency. I’ve recently been speaking to a number of big players in New York real estate and while they say the buyers at the high end of the market come from Iowa to Indonesia, they stay less, and they live a global private jet lifestyle.
We also know seasonally you can find a cross-section of the Super Rich seasonally in Sardinia, St. Barth’s and Aspen. Then at other times of year you will find UHNWs over-concentrated in Davos, Augusta, Louisville, Ft. Lauderdale, Monte Carlo, Indianapolis, Flushing or the rotating sites for The Super Bowl, PGA Championship, British Open and so forth. In varying years you can find the Super Rich flocking to the Olympics, Ryder Cup, America’s Cup, FIFA World Cup. The annual General Assembly of the United Nations brings extra UHNWs to New York.
Some of the UHNWs who today and tomorrow may be in Pinehurst could next week be in San Antonio and in coming weeks at any of several cities across Brasil. Others will be in the London suburb of Wimbledon. Others may be simply unwinding anywhere in one of their houses from Maui to the Hamptons, Cannes or even Door County. By the way, Door County is in Wisconsin and million dollar homes are quite common as I came to know when a reader of Elite Traveler bought a $29 million home that was advertised in the magazine.
Wealth-X produces some interesting research about UHNWs, and their latest report, in conjunction with UBS, breaks out the home base of the very, very rich, by country and in the United States, by state.
If each American state was a country, California would have the third largest UHNW population in the world behind Germany and Japan. On this basis, the Top 10 goes United Kingdom, China, New York, India, Switzerland, Texas and Canada. Places 11 through 20 are France, Florida, Brazil, Mexico, Hong Kong, Illinois, Italy, Michigan, Spain and Pennsylvania. These 20 areas represent 67 percent of the 193,685 UHNWs Wealth-X had identified.
Now things get tricky:
The next 121 countries, states and combination of countries listed as “other” in the report are home base for fully 33 percent of the world’s richest families.
For example, there are more UHNW families in Minnesota than Russia. North Carolina has more Super Rich than the United Arab Emirates. Kentucky, Alabama and Montana each have more UHNWs than Qatar. Colorado, Arizona and Tennessee each have larger Super Rich populations than Turkey, Malaysia or South Africa. So much for emerging economies! See my analysis below.
The payoff of attracting Super Rich families for luxury providers is huge. The Top 0.1 Percent of U.S. taxpayers (some 117,000 households) is estimated to have spent $214 billion last year on high-end purchases such as watches, jewelry and fashion as well as stays at hotels and resorts, spas and villas.
Yet clearly, the Super Rich at any one time are in many different places. For example, St. Barth’s only has about 300 villas and 200 hotel rooms. Add several dozen mega-yachts and even at peak times, there is only a very small fraction of UHNWs represented. It’s the same with events such as Super Bowl, Art Basel Miami and Kentucky Derby where private jet arrivals usually range between 500 and 1,000.
What does this mean for companies that want to tap into the high spending Super Rich?
To tap into the long tail luxury providers need to find media that is in many places at once. In fact, even in the Top 20 that make up two-thirds, places such as Ohio, Michigan and Pennsylvania are rarely mentioned as target areas by luxury marketers.
Back to Door County. There are more UHNW families in Wisconsin than Saudi Arabia.
UHNW Population by Geography
|23||REST OF LATIN AMERICA||1,415||0.73%|
|44||UNITED ARAB EMIRATES||1,050||0.54%|
|67||REST OF MIDDLE EAST||550||0.28%|
|72||DISTRICT OF COLUMBIA||500||0.26%|
|87||REST OF ASIA||320||0.17%|
|95||REST OF AFRICA||255||0.13%|