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Take from the rich

Tuesday, June 12, 2012

Times may be hard in much of the world, but not for the rich, who keep getting richer, according to a recent study by the Boston Consulting Group.

While several nations are struggling to pay their debts, luxury consumer spending – from bottles of Chateau Lafitte to Ferraris, and from Rolex watches to private jets - is now valued at close to $1.4 trillion a year, which is about the same size as Spain’s entire economy.

“The gap in income inequality is growing, which is unfortunate, but as a result there are more and more millionaires every year,” Jean-Marc Bellaiche, one of the authors of the report told the Financial Times.

Rich people don’t spend much money in Central America.

The issue is how to create a trend of attracting this type of spending. Luxury tourism is one way. Several African countries have been successful in doing this, through up-market safaris for wealthy Europeans, Americans and Asians.

For their part, many rich people are looking for new ways of enjoying their money: demand for experiences is growing faster than demand for expensive watches and designer clothes, according to the study.

Providing experiences to a luxury market means investing capital, and above all having well-trained people.

But as the ranks of the rich swell, the trend is there to be exploited.