Luxury market to hit €1.5 trillion in 2023—and travel is a big factor

The global luxury market is projected to reach €1.5 trillion in 2023, an 8-10 per cent growth over 2022, setting a new record for the industry and proving its unparalleled resilience.

These are among the findings of the latest Bain & Company report with Altagamma, the Italian luxury goods manufacturers’ industry association. Spending on experiences, particularly, recovered to historic highs, fueled by a resurgence in social interactions and travel.

Despite challenging macroeconomic conditions, the market registered robust growth of 11-13%, at constant exchange rates. This is consistent with last year’s growth rate and translates to a ~€160 billion increment in spending across luxury categories.

Amid pronounced geopolitical and macroeconomic shifts, the luxury market has proven unparalleled resilience this year. The key segment, personal luxury goods, has experienced continued growth in 2023 and is projected to reach €362 billion by end of year, 4 per cent higher than 2022 at current exchange rates.

European tourism rebounds

The study shows global luxury tourist purchases have nearly reached pre-pandemic levels, with untapped potential remaining in many areas.

Europe has enjoyed a progressive pickup in tourism, driving growth across countries, with long-haul resort locations attracting high spenders alongside key luxury cities. Even if local aspirational customers were impacted by macroeconomic instability, stable top-customer pools maintained positive momentum contributing to market growth.

American tourism dwindles

Alternatively, the Americas have seen a deceleration throughout the year, posting an eight per cent drop from 2022, as widespread uncertainty continues to impact aspirational customers’ spending.

Top customers remain confident but have maintained their spending abroad, as the US dollar remains strong against the Euro and price differentials favor oversea purchases.

Other regional trends

 

Saudi Arabia is accelerating, attracting investments of major luxury brands; and Australia has provided fertile ground for growth.

Mainland China posted a strong performance after its first quarter reopening but slowed progressively as new macroeconomic topics arose. Hainan is poised to grow as a bright luxury hub, set to become an entire duty-free island by 2025. 

Japan is booming, thanks to sound local customers and the weak Yen, favoring touristic inflows. Conversely, South Korea is facing a challenging year, with unfavorable macroeconomic headwinds impacting local consumption and strong currency leading tourists to buy elsewhere.

Southeast Asian countries experienced positive momentum, thanks to strong intraregional tourism and growing interest from local consumers, especially in Thailand.

Share:

Facebook
Twitter
LinkedIn

Latest

Two thirds of Canadians are going off the beaten path for 2024

A new survey by British Airways reveals that one in five Canadians are planning to travel more than ever before in 2024.  Notably the pandemic has made more than half of all Canadians want to travel more (58%).  A third (33%) of Canadians plan to explore new destinations and tick places of their ‘must visit’ list in the new year.

Hiking Italy’s most heavenly route

I’m sitting along a wooden table overlooking the dramatic cliffs of the Amalfi Coast, feasting on freshly-made goat cheese, deep-fried fritters, roasted tomatoes and eggplants, while sipping on homemade red wine with a group of fellow travellers from around the world, when an impromptu concert breaks out. Nino Aversa, one of the guides leading my small hiking trip, has joined

A tourist’s guide to loving Vietnam

I had some initial apprehension upon learning that I’d be checking into a ‘junk boat’ for the next two nights. But upon seeing my home on the water, I quickly discovered that unlike the sound of the name, it’s actually not a shabby way to spend the night.  In fact, these sleeper ships, which range from basic bare bones boats

Four Seasons Private Residences to open in Istanbul

Four Seasons Private Residences Istanbul is a new project featuring 82 homes comprised of penthouses, a sky loft, garden suites and apartment residences that will welcome residents in 2024. Located at the meeting point of the Ulus, Etiler and Levent neighbourhoods, Four Seasons Private Residences Istanbul will be located next to the city’s best upscale shopping districts, renowned culinary destinations and dynamic