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SoCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Apr-10-10 05:10 AM
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..."Can I get something that is 50 feet shorter?" ... (From the "let them eat cake" files)
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The Well-Off Are Spending Again but Carefully

Published: April 9, 2010

The wealthy are cautiously opening their wallets again.

Workers at the Sabre Yacht factory in Maine. Business is picking up relatively slowly, said David Zilkha, the owner.

People are fed up, and they want to have a good time, said Rina Anoussi, a Manhattan travel agent who handles high-end clients. They dont want Italy 101. They want more exotic destinations like Kenya and Tanzania. But Ms. Anoussi, who operates her own company under the Tzell Travel Group, said her customers were still wary about overspending. They argue like carpet dealers in Istanbul looking for the best deals, she said. They want to know, What can I get if I book through you. Business is also creeping back for hotels, yacht rental companies, jet brokers and jewelry stores 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.

Today if they buy, they are not willing to be embarrassed by overpaying, said Jane Bayard, executive vice president at Warburg Realty Partnership of Manhattan. Though the Manhattan residential market has held up reasonably well, there were times in 2007, for example, when there were multiple offers and people paid millions over the asking price, Ms. Bayard said. Today, nobody wants to be the last monkey in the tree. In an economy that remains weak, no one expects a rapid recovery. Lets be honest, said Stephen Hahn, area vice president for sales and marketing of Ritz-Carlton Hotels, Caribbean and Mexico. We are thrilled to see the numbers coming back, but are they springing back to the level they were? No they are not.

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.This was by far the worst downturn since the luxury tax nearly wiped out the boat builders in the very early 1990s, Mr. Zilkha said. Business is picking up relatively slowly, but it feels as if the recovery has substance. This year, the company expects to build as many as 120 boats.


Everybody has cut back somewhat, Ms. Webster said. Even people who rented a 225-foot boat are saying, Can I get something that is 50 feet shorter?


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