Bain predicts no significant surge in luxury spending during holiday season

Consultancy Bain & company, anticipate no significant increase in the global sales of luxury goods during the upcoming holiday season. Concerns increasing over inbound tourism flow to Europe, offset by locals tightening their spending habits. Bain partner, Federica Levato, stated that the movement of tourists directly impacts luxury spending in Europe, as local residents have scaled back their expenditure after three years of robust, post-pandemic growth. She also mentioned that the repercussions of the Israel-Hamas conflict led to the cancellation of several trips to Europe by Americans, although she clarified the situation seems to have stabilized since then.

In its biannual report, Bain indicated that global sales of personal goods, including apparel, accessories, and beauty products, should remain steady during the fourth quarter on a year-on-year basis, after the third quarter experienced a 3% decrease using current exchange rates. Bain's estimates for 2024 suggest that sales are likely to increase anywhere from 1% to 4%, given constant exchange rates. A more optimistic forecast proposes an increase up to 7%, assuming the boost from rebounding tourism outnumbers the demand from local consumers.

Personal luxury goods sales are projected to increase by 8% in 2024, reaching a high of 362 billion euros ($387 billion). This is thanks to steady spending rates in both the United States and Europe. Moreover, Chinese consumers, who are driving growth in Asia, could be making a full return to Europe by late next year, according to Levato. Levato reported they are currently spending approximately 40% of 2019 levels in Europe. Lastly, she pointed out consumers' preference towards high-end jewellery, perceived as investment pieces, as well as fragrance and makeup, with the top brands faring the best.