Luxury-market growth is being driven by a combination of consumer spending power, experiences, regional momentum, product desirability, pricing, and changing discovery channels—not by one universal “luxury consumer.” The broad luxury economy is currently more resilient than personal luxury goods because hospitality, travel, dining, and other experiences are growing faster than many tangible categories.
The most important distinction is measurement. Bain & Company and Altagamma recorded €1,443 billion in worldwide luxury spending in 2025, while personal luxury goods accounted for €358 billion. Their 2026 base-case outlook is €1,440–€1,470 billion for the total market and €365–€373 billion for personal luxury goods. Those are forecast ranges, not final results, and they describe different market scopes.
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Start with the right definition of luxury-market growth
“Luxury market” can mean the entire luxury economy or the narrower personal-goods segment. The broad measure includes luxury hospitality, travel, private aviation, yachts, cruises, restaurants and gourmet food alongside fashion, watches, jewelry, beauty and accessories. Personal luxury goods cover the products consumers buy for themselves, rather than the full set of luxury experiences.
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Growth can also mean different things. A market may increase in nominal revenue because prices rose, even if it sold fewer units. It may gain customers while average spending falls, or retain a small group of high spenders while aspirational shoppers pull back. Any serious comparison should identify the scope, metric, geography, period and forecast status.
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| Measure | Latest figure or outlook | How to interpret it |
|---|---|---|
| Total worldwide luxury spending | €1,443 billion in 2025 | Includes goods and experiences; Bain & Company and Altagamma figure reported in their 2026 update. |
| Total luxury spending forecast | €1,440–€1,470 billion in 2026 | Base-case range, equal to 0%–2% growth at constant rates; a forecast rather than a settled result. |
| Personal luxury goods | €358 billion in 2025 | Narrower product category, not the whole luxury economy. |
| Personal luxury goods forecast | €365–€373 billion in 2026 | Forecast growth of 2%–4% in the Bain–Altagamma outlook. |
Because the two 2026 ranges use different scopes, they should not be treated as contradictory. The wider market can be flat to slightly higher while personal goods grow at a different rate.
Experiences are supporting the wider luxury economy
The strongest current shift is toward experience-oriented spending. Bain’s 2026 update says consumer sentiment for experiences is outgrowing sentiment for tangible goods. Luxury hospitality, private jets, yachts, cruises, dining and gourmet food are identified as comparatively resilient areas, although performance varies within each category.
Why experiences matter
Experiences compete directly with purchases such as handbags, shoes, watches and jewelry for the same discretionary budget. A consumer may choose a trip, a special meal or a private travel service instead of another physical item, especially when wardrobes are already full or product prices have risen sharply. That does not mean ownership has lost its appeal. It means the definition of luxury is expanding and spending is moving across categories.
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When experience categories grow while some goods categories weaken, the total luxury economy can remain resilient even if personal luxury goods are under pressure. Analysts should therefore avoid using a broad luxury-spending total as proof that every luxury product category is growing at the same pace.
Consumer wealth, confidence and participation determine demand
Luxury growth depends on how much consumers can spend and how widely that spending is distributed. Bain’s 2025 study described a contracting and splintering consumer base, with more cautious buyers and a stronger focus on perceived value. A smaller group of established high spenders can sustain revenue for a time, but long-term expansion also requires new customers and repeat participation.
Established high spenders
High-net-worth customers are less dependent on monthly household budgets and can continue buying during periods of uncertainty. Their spending supports the upper end of jewelry, watches, travel and bespoke services. They also influence brand visibility because their purchases often set trends, support limited editions and generate demand for private experiences.
Aspirational shoppers
Aspirational customers are more sensitive to employment conditions, interest rates, inflation and confidence. They may trade down, delay a purchase or redirect money to an experience. Price increases that once appeared manageable can eventually reduce this group’s participation. Brands seeking durable growth must retain high spenders without making entry points feel disconnected from quality or usefulness.
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Perceived value, not only disposable income
Available money is only part of the decision. Bain’s recent work points to consumers looking for quality, exclusivity and practicality. A product that clearly demonstrates craftsmanship, durability, design or scarcity can justify a premium more effectively than an item whose price rises without a stronger reason to buy.
Geography creates winners and drags
Luxury demand is not moving uniformly around the world. Bain and Altagamma’s 2026 outlook identifies the Americas as a source of strength, while Europe and the Middle East weigh on overall performance and China recovers cautiously. Altagamma’s June 2026 summary likewise describes the Americas as driving personal-goods growth, with Europe and the Middle East declining and China in cautious recovery.
The Americas
The Americas are the clearest positive contributor in the current outlook for personal luxury goods. That regional result can still differ by country, city, customer group and category, so a regional gain should not be read as every market or brand gaining equally.
Europe and the Middle East
Both regions are described as drags in the 2026 outlook. Tourism flows, currency movements, local confidence and geopolitical conditions can alter results quickly. A weak regional total may also conceal stronger performance in a particular destination or product category.
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China’s recovery is characterized as cautious rather than a return to the earlier pattern in which it was routinely described as the central engine of luxury growth. Consumer confidence, domestic versus overseas purchasing, travel patterns and macroeconomic conditions all affect the pace. Forecasts should retain their report year because regional conditions can change before a full-year outcome is known.
Price increases lifted revenue, but pricing has limits
McKinsey and The Business of Fashion reported in 2025 that price increases accounted for more than 80% of luxury-sector growth from 2019 to 2023. This is a crucial distinction: higher revenue per item is not the same as higher unit demand, a larger customer base or greater purchase frequency.
Why price-led growth worked
Strong brand recognition, scarcity, craftsmanship and consumers’ willingness to pay allowed many companies to raise prices while maintaining revenue growth. During the earlier expansion, those increases could offset modest volume gains and make the market appear stronger in value terms than in units sold.
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Where the ceiling appears
McKinsey and The Business of Fashion’s January 2025 analysis said price increases were reaching a ceiling and weighing on aspirational demand. When a price moves beyond a shopper’s perceived value, the likely responses are postponement, substitution, resale or no purchase. Bain’s 2025 findings similarly describe a more selective consumer base.
What sustainable growth requires
Pricing can remain part of a growth strategy, but it works best when supported by product desirability and a credible value proposition. Quality, exclusivity, practicality and design must explain the premium. Otherwise, revenue growth may conceal shrinking volume and a narrower customer base.
Category mix determines the aggregate result
Luxury categories do not move together. Bain’s 2025 study reported stronger performance in jewelry and eyewear, resilient fragrance demand, pressure on shoes and leather goods, and polarization in watches. Its 2026 update continues to describe differences among categories, with jewelry and several other segments holding up better than cosmetics, leather goods and footwear.
Jewelry and eyewear
Jewelry was identified as a leading growth area in the 2025 outlook, while eyewear also performed well. These are dated snapshots rather than permanent rankings. A category’s result depends on price architecture, innovation, gifting, regional demand and how strongly consumers perceive the item’s value.
Beauty and fragrance
Fragrance was described as a dynamic beauty subcategory in the 2025 study, while the 2026 update indicates that cosmetics overall has faced more pressure than some other segments. This illustrates why broad labels such as “beauty” can hide divergent performance within individual product types.
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Watches showed polarization, meaning stronger and weaker positions within the same category rather than one uniform trend. Shoes and leather goods faced pressure in the 2025 study, and the 2026 update continues to place leather goods and footwear among the more challenged areas. These findings should be attached to their publication years, not treated as timeless product rankings.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Resale and AI are changing how people discover luxury
Resale now affects the primary market as well as secondhand transactions. Bain’s 2026 update says roughly half of luxury shoppers consult the secondhand market before buying new. That behavior can help consumers compare prices, assess durability, understand scarcity and decide whether a new purchase is worth the premium.
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Resale as a decision filter
Resale gives buyers another reference point for value and ownership cost. It can also broaden participation by offering access to products at different prices. For primary-market companies, the implication is that product design, authentication, condition, repairability and long-term desirability matter beyond the first sale.
AI-assisted purchase journeys
About half of luxury consumers already use AI somewhere in their purchase journey, according to Bain’s 2026 update. AI may help with discovery, comparison, recommendations or research. The figure demonstrates changing consumer behavior, not that AI independently causes market growth. Adoption can improve how shoppers find products, but conversion still depends on trust, product appeal, availability and price.
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How the drivers interact
Luxury growth is best understood as an interaction among several forces rather than a single formula.
- Economic capacity: income, wealth, confidence and asset values determine whether consumers can enter or remain in the market.
- Meaning and desirability: products must provide status, self-expression, craftsmanship, exclusivity or practical value that feels worth the premium.
- Price architecture: price increases can raise revenue, but excessive increases reduce aspirational participation and may weaken volume.
- Category allocation: consumers shift budgets among jewelry, beauty, fashion, watches, travel, hospitality and dining.
- Geography: regional confidence, tourism, currencies and local conditions create different growth rates.
- Discovery and access: direct digital channels, resale and AI-assisted research change how people compare and purchase, even when the final transaction is offline.
A market can therefore show value growth with fewer units, category growth with a shrinking customer base, or broad resilience led mainly by experiences. The chosen metric determines the apparent story.
How to evaluate a luxury-growth claim
Use this checklist before accepting a statement that “luxury is growing”:
- Identify whether the figure covers total luxury spending or personal luxury goods.
- Check whether it measures nominal revenue, constant-currency value, units, customers or spend per customer.
- Separate an observed year from a forecast year and state the forecast scenario.
- Record the geography and avoid applying a regional result to the whole world.
- Look at category and channel mix rather than relying on one aggregate total.
- Ask whether growth came from price, volume, new customers, higher frequency or a combination.
- Treat resale and AI figures as evidence of changing behavior, not automatic proof of causation.
What could limit growth?
The same forces that support luxury demand can reverse. Macroeconomic weakness can reduce aspirational spending. Continued price increases can push customers toward resale or postponement. Geopolitical shocks, currency changes and tourism disruptions can quickly alter regional results. A narrow reliance on high spenders can protect near-term revenue while weakening the pipeline of future customers.
Category concentration is another risk. If jewelry or experiences outperform while leather goods, footwear or cosmetics decline, a company exposed to the weaker categories may underperform even when the overall luxury economy is stable. Forecasts should therefore be read as scenarios, not guarantees.
The outlook in one sentence
Bain senior partner Bruno Lannes described the 2026 environment this way: “The luxury market is stabilizing, but this is not a return to the old rhythm, it is the emergence of a new one.” The evidence supports that characterization: experiences are carrying more weight, personal goods are recovering at a measured pace, regional performance is uneven, and consumers are scrutinizing value and using new ways to research purchases.
The durable growth question is not simply how much a luxury company can charge. It is whether the company can create products or experiences people still consider meaningful, reach the regions and channels where demand exists, and broaden participation without weakening exclusivity.
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