The wealthy are cautiously opening their wallets again.
David Kinser, a pilot, with an XOJet plane in San Francisco. Business has picked up at XOJet, which leases planes.
Workers at the Sabre Yacht factory in Maine. "Business is picking up relatively slowly,"? said David Zilkha, the owner.
â??People are fed up, and they want to have a good time,â? said Rina Anoussi, a Manhattan travel agent who handles high-end clients. They donâ??t want Italy 101. They want more exotic destinations like Kenya and Tanzania.â?
But Ms. Anoussi, who operates her own company under the Tzell Travel Group, said her customers were still wary about overspending. They â??argue like carpet dealers in Istanbul looking for the best deals,â? she said. â??They want to know, â??What can I get if I book through you.â??â?
Business is also creeping back for hotels, yacht rental companies, jet brokers and jewelry stores â?? purveyors of the luxury goods that once seemed immune to a downturn but then took a megahit with the economy.
Some experts contend that much of the high-end spending before the recession was fueled by money borrowed by people who were trying to live beyond their means. Today there is a trend to reducing risk by cutting debt. But even people who came out of the financial crisis relatively unscathed are pulling back. The possibility of losing their wealth has become more real.
â??Today if they buy, they are not willing to be embarrassed by overpaying,â? said Jane Bayard, executive vice president at Warburg Realty Partnership of Manhattan. Though the Manhattan residential market has held up reasonably well, â??there were times in 2007, for example, when there were multiple offers and people paid millions over the asking price,â? Ms. Bayard said. â??Today, nobody wants to be the last monkey in the tree.â?
In an economy that remains weak, no one expects a rapid recovery. â??Letâ??s be honest,â? said Stephen Hahn, area vice president for sales and marketing of Ritz-Carlton Hotels, Caribbean and Mexico. â??We are thrilled to see the numbers coming back, but are they springing back to the level they were? No they are not.â?
At Sabre Yachts in South Casco, Me., a good year once meant building and selling about 180 luxury sailboats and powerboats priced from $400,000 to $1.5 million. Last year, sales sank to well below 100, said Daniel Zilkha, who has owned the company for 15 years.
â??This was by far the worst downturn since the luxury tax nearly wiped out the boat builders in the very early 1990s,â? Mr. Zilkha said. â??Business is picking up relatively slowly, but it feels as if the recovery has substance.â? This year, the company expects to build as many as 120 boats. The yacht charter business was similarly hard hit last year and is also starting to show signs of life for the coming summer, when wealthy customers want boats to cruise in the Mediterranean. Still, Shannon Webster, who runs a charter business in Flagler Beach, Fla., described the current climate as a â??Mexican standoff because smart buyers know they can wait a bit and boat owners are evaluating what they may have to give up to get customers.â?
â??Everybody has cut back somewhat,â? Ms. Webster said. â??Even people who rented a 225-foot boat are saying, â??Can I get something that is 50 feet shorter?â?? â??
The more conservative sailboat charter business is showing signs of a rebound, too. Tina Hinckley, whose family sold its sailboat manufacturing business to a private equity firm in 1997, now arranges charters for high-end clients through her Hinckley Crewed Charters in Southwest Harbor, Me. She has already booked 20 trips, twice as many as she had on her schedule at this time last year. â??Last year, I sent out quite a few contracts that never came back,â? she said. â??This year, they are actually coming back and signing up.â?
If boats are getting smaller, jewelry is getting bigger. A spokesman for Tiffany, Mark Aaron, said the jewelerâ??s sales of pieces that cost more than $50,000 rebounded for the 12 months that ended Jan. 31. The comeback was â??meaningful,â? he said, although he would not quantify it.
But it is easier to muster $50,000 than $20 million.
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