The high-end market will surpass pre-pandemic levels this year with up to €320,000 million in sales worldwide and Spain as the European engine of this tourism
The rich cry too, but much less. It is reflected in your business and in your spare time. The luxury products and services sector had a turnover of 281,000 million euros in 2019, the highest point ever. In 2020, their sales fell by 26%, blaming the near impossibility of traveling to other countries – one of the main engines in the spending of this social class – and this year they will breathe new life into the laurels and reach a new record .
But who are we talking about? Well, the figure varies depending on the measurement. Real estate advisor Knight Frank’s latest report on global wealth placed Spain in 11th place at the end of 2021 with 11,685 large resident fortunes. million dollars (954,000 euros), which would place that figure at 22.5 million individuals worldwide.
They are often viewed with suspicion, especially in times of crisis. In Spain, the richest 10% of the population has almost 58% of the total wealth. However, they are the engine of a powerful industry with a growing weight in the national economy.
In high-end tourism, Spain is the European country where it contributes the most to Gross Domestic Product (GDP), 2% compared to 0.9% on average, according to specialist consultancy Bain & Company, which quantifies this contribution by 25,000 million euros per year, 26% of the total income of the national tourist industry (in the EU 22%): between 70,000 and 95,000 million euros according to the scale.
Across Europe, these luxury travelers move between EUR 130,000 and EUR 170,000 million, which represents 72% of this excellence worldwide and has validated the consideration of high-end ‘Silicon Valley’. And it is in this sea of profit that Spain could fish even more. According to the president of Círculo Fortuny – the most important national association in this sector – Xandra Falcó, “it has all the ingredients to lead excellent tourism not only in Europe, but also worldwide”.
Much of the data from Bain’s study supports his estimate. So, while the traditional tourist spends 39% of his budget on purchases (“shopping”), the high-end tourist spends 50% on the same goal, 26% on accommodation – Spain is the third European country with the most weight in hotels of five stars, 4% from the sector – and 20% to recovery. Exactly 54% of travelers bet on gastronomic experiences of excellence -228 Spanish restaurants have a Michelin star, compared to 8% who are more inclined to the sun and beach proposal, the most famous on a general level. Likewise, in terms of sports, nature and ‘spa’, it is the fifth country in the world with the most visitors seeking ‘wellness’.
The weak point is the added value generated by this type of tourism, which is much greater than the traditional one. While the European average multiplies it by eight, in Spain it is “only” four times what is spent, as the daily expenditure of a traveler of this type in Spain is 860 euros, compared to 1,000 in Germany, 2,000 in France and 6,000 euros in Italy.
As for the luxury personal goods market (jewelry, cars, fashion, perfumes and cosmetics), the bad pandemic dream has been left behind. In 2021, sales in Spain grew by 15.5% (19% globally), despite the continued low influx of travelers from China, South Korea, Japan, the US and Latin America due to covid, according to an EAE survey. study Business School.
In 2022, the recovery has continued to accelerate despite “a very turbulent environment” with the war in Ukraine, the global threat of a potential recession and rising inflation, said Claudia D’Arpizio, partner at Bain. Although he warns as a positive value ‘the great price power that these companies have’.
Therefore, this consultancy manages three scenarios that are all emerging in the global luxury business in 2022. The most optimistic would assume an annual growth of 15% to a maximum of 330,000 million euros in turnover; the most conservative, just a 5% improvement to 305,000 million and the average would increase that figure to 320,000 million, 10% more.
The calculations already take into account the sharp decline in Russian high-end consumption, punished by EU sanctions after the invasion, along with the sluggishness of the Chinese. due to pandemic constraints (still accounting for 21% of this market in 2021). And that is blamed on the large companies in the sector on the stock exchange: the S&P Global Luxury index fell by 19% last year.
The luxury sector is one of the biggest converts in the digital world. If two decades ago he was almost obligated, without being clear about the part of his business that would involve e-commerce, today he is one of the most enthusiastic about the metaverse, the new virtual world that Mark Zuckerberg plans to lead. .
According to Morgan Stanley bank, the virtual luxury goods market could reach 10% of its revenue by 2030 and grow by $300,000 million. Several world-class brands have taken the virtual leap, especially in fashion.
Last year, internet users bought these types of products worth 50,000 million in order to “customize” their avatars in the usual video games in which they participate. And by 2022, that amount is expected to triple. For example, Balenciaga launched a collection of digital garments (they call them ‘skins’) for the popular ‘Fortnite’. Its success led him to create his own video game ‘Afterworld’, where he presented his fall collection 2021.
Its owner is the French empire Kering, which plans to expand other well-known brands, such as Gucci, Saint Laurent and Bottega Veneta, through the metaverse. At the other extreme, the LVMH group (Louis Vuitton) is still skeptical, although it has created a “blockchain” program (Aura) together with Cartier and Prada to fight the counterfeiting of its articles in the digital universe.
NFTs, exclusive and non-exchangeable digital assets, have already delivered juicy returns on Maison Henessy and its collectible cognac, Lamborghini or beauty agencies such as Guerlain or Clinique. Luxury mansions have also come to this world: in the four major metaverses, real estate will sell for 1,000 million in 2022.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
