The Incredible Disappearing Luxury Carrot

My friend, an almost-retired Dallas attorney, is agitated. “I just can’t believe it,” he says. “I was quoted $4,000 for one night at the Jerome!”

He had been hoping to have a small celebration, as he and his wife had done for many years. They would slip away from Dallas and go to the Hotel Jerome in Aspen. Great food. Some champagne. A little caviar.

Good times.

Then he saw the price.

It was just too high.

In fairness to the Jerome, I need to tell you that this was an especially high price, the kind that happens at peak periods where the only way to make getting a room less like applying to Stanford or Harvard is to thin the crowd with price. In coming weeks, you can snag a regular room (not the junior suite my friend was seeking) at the Jerome for a mere $1,180 a night. You can, of course, pay more for more elaborate accommodations.

Your best bet? Avoid weekends. Go midweek.

The Basket of The Good Old Days

This is not the way life is supposed to be. In the story of life my friend had been told, if you just work hard and long, you’ll make the money to have the things you want. You probably heard that story, too. I know I heard it.

The good news is that the story had been true, kind of, until he almost-retired.

But now things are different. The little luxuries are receding. They are disappearing into a rapidly filling Good-Old-Days basket.

My friend isn’t alone.

Watching the Bats from the Four Seasons

Here’s an example from my own experience. I’ve always admired Four Seasons hotels. For many years I was resigned to knowing that while I might have breakfast at one while interviewing a newsworthy person, I would never be able to afford the nightly expense of staying in one.

Then, in a long-ago Texas recession, something wonderful happened. The Four Seasons in Austin went through a period where it cost only $30 more than staying at the Marriott and just less than $300 a night. So, for a number of years my wife and I stayed in a balcony room and, at the right time of year, spent the early evening drinking wine and watching the bats emerge in long, thin lines from under the bridges of what was then called Town Lake.

Today, those balcony rooms overlooking the lake are $932 a night, plus taxes. That’s real luxury inflation. And, sadly, well beyond my reach. Even for very special occasions.

50 Years of Luxury Inflation

Luxury inflation isn’t new.  And while it’s definitely a “first world problem,” it has an impact on everyone.

Most people are concerned about the rising price of ground chuck (currently $4.73 a pound at HEB, by the way). But I created a “La Dolce Vita Index” as a free-lancer for the Boston Globe nearly half a century ago. Forbes magazine, in a similar exercise, has diligently tracked its “Cost of Living Extremely Well” index for 40 years.

Last year, the CLEWI, as they call it, was up 10.1 percent, the most since 2008 and nearly twice the 5.3 percent rate of the Hoi Polloi index, otherwise known as the Consumer Price Index.

Defining Luxury

Here’s the problem: The cost of the really good stuff has been rising faster than everyday stuff for decades. Worse, the definition of “the really good stuff” has risen every year as new levels of luxury experience are defined.

This is to be expected. By definition, if too many people can afford any luxury experience, it isn’t a luxury any more. To be truly luxurious, something must also be exclusive. Trust me, when McDonald’s is serving dry-aged beef burgers, dry-aged beef will be toast.

Is there a serious problem here?

I think so.

The Rising Tide that Sank the Rowboats

While a rising tide of wealth is supposed to be good for rowboats and mega-yachts alike, the reality is that the recent Covid surge, not to mention everything since the beginning of this century, has lifted the mega-yachts but swamped the rowboats.

Our endearing friends on the left have a universal remedy for this. It’s called taxation. But I can think of a better, and long overdue, remedy that won’t require an act of Congress. Instead it will require a change of consciousness for CEOs and corporate boards.

Share the profits.

Raise wages. It can be done. The cash is there. Just think how many Big Macs, trips to Walmart, or gas refills can be purchased with the price of a single night at the Jerome.

CEOs and Big Dogs are, yet again, receiving record compensation. Workers are not. Indeed, they are still trailing inflation.

Related columns:

Scott Burns, “Looking Back: The Plight of the Affluent, Anew,” 11/15/2019, https://scottburns.com/looking-back-the-plight-of-the-affluent-anew/

Scott Burns, “Why 2.6 million workers chose a new job at Retirement, Inc.,” 3/12/2022 https://scottburns.com/why-2-6-million-workers-chose-a-new-job-at-retirement-inc/

Scott Burns, “The Great Reversal” (a three part series), 08/2021 https://scottburns.com/2021/08/

Sources and References:

U.S. Inflation Calculator: https://www.usinflationcalculator.com

Forbes Cost of Living Extremely Well Index: https://www.forbes.com/sites/andreamurphy/2021/10/10/its-getting-more-expensive-to-live-like-a-billionaire/?sh=81e90c738041

This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.

Photo: Photo by Andrea Piacquadio on pexels.com

(c) Scott Burns, 2022