Even rich travelers are cutting back
As the U.S. economy spirals downward, even America's wealthiest are redeeming reward points and looking for "cheaper" vacations. Members of Hilton Hotels'...
As the U.S. economy spirals downward, even America's wealthiest are redeeming reward points and looking for "cheaper" vacations.
Members of Hilton Hotels' loyalty program who live in the 10 wealthiest U.S. ZIP codes redeemed 42 percent more reward points in the first nine months of 2008 than in the same period a year earlier, said Adam Burke, Hilton's head of customer loyalty.
"It's not like I'm going to Paris this year," said Cal Burton, a partner at a Chicago law firm who took his wife to Rome for their 25th wedding anniversary using points last November. The couple is more likely to cash in Hilton HHonors points to travel to Charleston, S.C., or another U.S. destination, the 52-year-old lawyer said.
The spending shift by America's richest follows cutbacks by a broader segment of the population. The pace of booking for fall and winter vacations has plunged 50 percent this year for Carlson Hotels Worldwide's Regent and Radisson hotels in Florida and the Caribbean, said president Paul Kirwin.
Seventy-one percent of America's wealthiest households — representing the top 10 percent of incomes — say the real-estate and banking crises have hurt their sense of financial security, and 48 percent are now worried about running out of money, up 13 percentage points from April, American Express and Harrison Group said in a survey released in early October.
"Even very affluent people love to get a good deal, love to get a free gift, love to take advantage of an offer, and in times like this, that plays to it," Starwood Hotels & Resorts Worldwide Inc. Chief Executive Officer Frits van Paasschen said.
Alaska may be the new destination. Charlie Summerville, a pilot and Alaska wilderness guide, said demand from the wealthy for hunting and fishing trips is stronger than ever.
"I really don't see the high-end people cutting back on their spending," said Summerville, 42, founder and owner of Alaska Adventures LLC in King Salmon, southwest of Anchorage.
A 10-day hunt for Alaska brown bears, not including government permits and flights to the state, costs $14,500 or more per person, he said. Wealthy adventurers now account for 70 percent of business, up from 30 percent a few years ago, Summerville said.
"The middle class has been taken out by the weak economy," he said. "Some clients who used to come every two years, now come once in five or six years because they just can't afford it."
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