Rich people who want to flaunt their wealth no longer are forced to buy stuff. Nowadays, almost anything they want can be leased.
Jet-setters, for example, aren't limited to five-star hotels or plunking down 25 percent on a $1 million home if they’re looking for a luxurious place to live while traveling abroad for extended stays.
Instead, they can sign a lease for as little as $500 a week or $1,800 a month in places like Bali, Miami, San Francisco and Tokyo for high-end accommodations that offer state-of-the-art amenities such as yoga classes, a fitness center, maid service, Wi-Fi, a shared kitchen, co-working space and a pool.
“The average age is 38, but we are also seeing a lot of empty-nesters whose kids are in college,” said Bruno Haid, founder of Roam. “They might have built multiple businesses that run themselves and want to see the world for two or three years. They don't necessarily want to do that in a hotel or be responsible for a foreign property they’d own.”
For the rich who don’t want to be tied to a home with a long-term mortgage, Roam provides its “subscribers” with fully furnished private rooms, complete with bathrooms and common spaces where they can work, cook or mingle with other wealthy travelers from around the world.
"The most popular destinations are the Asian ones,” Haid said. “Members like to combine Tokyo and Bali, which are both vacation destinations for those in their 30s.”
Welcome to the growing subscription-based luxury economy, where service providers are increasingly finding that the high-net-worth demographic is amenable to leasing over buying.
Some 80 percent of customers are demanding alternatives to buying a product outright, including subscribing, sharing and leasing, according to a report by the Economist Intelligence Unit.
“Brands that jump on this trend early will reap huge rewards within their space because many of the ultra-wealthy are willing to pay a 20 percent to 33 percent premium for ease of use, variety, functionality and less friction of transfer costs if they feel like driving a red Ferrari instead of a black Rolls Royce or white Bentley, for example,” said Richard Wilson, CEO and founder of the Family Office Club, which sets up virtual family offices for the wealthy at a monthly subscription rate of $999.
Just last month, GM launched a subscription service for 10 of Cadillac’s luxury vehicles, including the ATS Coupe and the Escalade ESV. To purchase outright, they cost at least $100,000 each, but for $1,500 a month or $18,000 a year subscribers can swap cars up to 18 times in 12 months, which gives them access to the cars without the hassles that ownership can entail, such as responsibility for repairs.
Below is a list of other subscription services that cater to the wealthy:
• Eleven James provides watches from distinguished brands with a membership fee that ranges from $149 to $999 per month. Members choose from 30 different luxury watch brands, including Rolex, to wear for up to four months.
• For $25,000 every three months, The Opulent Box subscribers receive a piece of luxury jewelry in the mail that's based on their individual tastes and preferences. Along with the thrill of a new ring, bracelet or necklace every month, the website states “Make Your Friends Jealous.”
• In California, Surf Air offers “all-you-can-fly” services on single-engine business aircraft as many times for 30 days at a rate of $1,950 per month, plus a $1,000 initiation fee. Subscribers can choose from 70 flights daily that travel between San Fransciso, Los Angeles, Santa Barbara and Carlsbad. For $2,450 a month, add on unlimited flights to Tahoe, Palm Springs, Napa and Monterrey.
• Rent The Runway members can select three designer items among coats, jewelry, handbags, dresses, pants and blouses, keep them for an unlimited period of time or swap them for new selections as many times a month as they want, for a subscription cost of $139 per month. Shipping, dry cleaning and insurance are included in the price. Subscribers can choose from luxury brands such as Badgley Mischka, Oscar de la Renta, Kate Spade and Nicole Miller.
