Inside the perk wars taking over the private jet industry

• Private jet companies are competing for clients who have it all with extravagant perks.

• It’s some of the most lavish marketing on the planet, from luxury trips to swanky suites at sporting events.

• Here’s a look inside the exclusive world of private aviation — and the benefits that come with it.

On a Thursday afternoon this spring, a few dozen well-heeled travelers descended via helicopter to the Rosewood San Miguel de Allende, a five-star hotel in central Mexico. Rooms at the hotel typically cost four figures a night.

Over the course of the weekend, the group went horseback riding and tequila tasting; on the final night, they enjoyed a private fireworks display.

All of it was complimentary — except the flights, which cost anywhere from $7,000 to $23,000 an hour for clients of Flexjet, a fractional ownership company that is sort of like a (very expensive and very fancy) timeshare for private aviation.

The trip, Flexjet’s Chairman Club event, is one of the perks you get for dropping at least six figures a year on a jet program. Other destinations have included Anguilla and Lake Como.

Flexjet and other private jet operators are touting wine tastings at vineyards not typically open to the public, suites at a Formula 1 Grand Prix and the Super Bowl, facials at 40,000 feet, and menus created by top chefs like Nobu Matsuhisa. Think of it as some of the most luxurious marketing on the planet.

Over the past five years, the number of ultra-high-net-worth individuals has ballooned more than 70% to 510,810, according to wealth intelligence firm Altrata. Last year, that group spent nearly $30 billion on private jets and yachts.

That influx of capital, a new class of customers who ditched commercial airlines during the pandemic, and membership models — such as NetJets, Flexjet, and VistaJet — that make private aviation more accessible mean more people are flying private than ever before. From June to August, fractional jet usage increased 70% over the same period in 2019, according to data from Aviation Week.

To attract those customers, jet operators are spending more than ever on lavish benefits — a tough sell, given that most potential clients can afford anything they’d want.

“We give them something they never want to get rid of,” Matteo Atti, the CMO of VistaJet’s parent company, Vista Global, told Business Insider of the membership perks.

Basically, once you get used to watching the Yankees from the Legends Suite or your dog gets used to drinking water with natural flower essences while at altitude — one of the many benefits of the VistaPet program — it can be hard to go back.

And in the competitive world of private jet operators, what one company does, another must one-up.

“It’s like the gladiators going after each other,” Doug Gollan, the founder of Private Jet Card Comparison, told Business Insider.

The No. 1 reason people fly private is simple: To get from point A to point B. A recent survey of more than 500 private jet users conducted by Private Jet Card Comparison, a guide and advisory service, found that more than 67% of users said door-to-door time saving was the reason they flew private.

But the extras have always been part of the fun.

Twenty-five years ago, jet companies offered access to Billy Joel concerts or the Super Bowl, Gollan said. Now, much like with premium credit cards, those benefits are bigger and better than ever.

It all comes down to two pretty simple marketing goals: acquisition and retention.

Typical marketing, whether a billboard or a targeted ad on Instagram, is unlikely to persuade someone to drop hundreds of thousands of dollars, let alone millions. Almost all private jet customers come through word-of-mouth, and when an existing client brings a friend to NetJets’ VIP Art Basel experience in Miami or on a trip to Bordeaux to visit vineyards with VistaJet, that’s an instant connection.

As Gollan said, “Birds of a feather flock together.”

Then there’s the retention element.

“This is belonging to a club,” Michael Silvestro, a co-CEO of Flexjet, told Business Insider, adding that event-based experiences have been particularly successful. “You expect a certain level of amenities and service.”

The bells and whistles can help keep a customer’s eye from wandering, especially when a competitor is laying down the sales pitch thick. They can also be a spoonful of sugar to help with the undeniable medicine of flying. Even on a private jet, there can be air traffic delays or mechanical issues.

Tickets to the Masters or a stay at a luxury resort “takes the edge off when something goes wrong,” Gollan said.

If youth is wasted on the young and perks are wasted on the rich, then the new private jet customer gets the best of all worlds.

Over the last decade, the average age of those who fly private has decreased.

“It’s not just for people who have made it, it’s for people who are making it,” Atti said.

And people who are making it prioritize experiences, whether it’s access to the Royal Ascot with Flexjet or pampering during a flight.

In general, younger generations are fueling a surge in the luxury experience sector. Last year, it was the fastest-growing of all luxury segments, according to a report by Bain, with a 5% uptick in spending. Luxury products, on the other hand, saw a 2% decrease in spending.

“They value the journey more than the thing,” Silvestro said of Flexjet’s younger customers.

A group of 40-somethings going on a trip won’t meet at the destination; they will get the party started on the tarmac, where a private car will take them directly to the plane, and the flight crew will greet them with Champagne and caviar. On the way home, the wellness-obsessed generation will eat a nutritionist-approved beet carpaccio, breathe in designer aromatherapy, and sit in ergonomically optimized chairs.

To be sure, some distinguish between extravagance and excess.

“People don’t want to pay through the nose to get that added perk,” said Tony Theis, VP at private aviation consultancy Central Business Jets. “For some people, traveling is just, I just need to get from A to Z.”

Ask any executive at one of these private jet companies, and they’d say that someone in it for the utilitarianism isn’t their target customer — but they also know that at the end of the day, a box at Wimbledon or special access to the Mayo Clinic can only go so far.

“You are spending hundreds of thousands, millions to join,” Gollan said. “No dinner with a chef makes sense if you join the wrong program.”

Taylor Rains contributed reporting.

Read the original article on Business Insider