Consumers worldwide are shifting their luxury spending away from possessions and toward emotionally rich, deeply personal experiences — a behavioural transformation now powerful enough to reshape the entire global luxury market. This is the defining insight from the newly released Bain & Company–Altagamma Luxury Goods Worldwide Market Study, and it is news of direct significance to the travel sector. As affluent consumers prioritise connection, wellness, culture and discovery over products, destinations capable of delivering immersive, meaningful experiences are poised to capture a larger share of global luxury expenditure. Saudi Arabia is one of the clearest beneficiaries of this shift.
The report forecasts global luxury spending at €1.44 trillion for 2025, essentially stable compared with last year (within a range of +1% to –1%). On the surface, the sector appears resilient. But beneath this stability lies what Bain calls a “tectonic shift” in how luxury consumers behave. The old model of conspicuous consumption is giving way to what the study terms “experiential indulgence” — the pursuit of profound, memorable, personally resonant experiences. Luxury hospitality, fine dining, travel activities, wellness and adventure are expanding rapidly, while many traditional luxury goods categories stagnate or decline.
Nowhere is this clearer than in the personal luxury goods market. This segment is expected to end 2025 at €358B, down from €369B in 2023 and €364B in 2024 — a drop of around 2% at current exchange rates and flat performance at constant rates. The contraction is driven largely by aspirational consumers cutting back. Even the market’s biggest spenders, whose share of revenue jumped from 30% in 2019 to 45% in 2024, have stabilised at around 46–47%.
Certain goods categories remain healthy. Jewellery is expected to grow 4–6% this year, eyewear 2–4%, and fragrances continue to outperform thanks to AI-powered personalisation. But other categories face stronger headwinds. Leather goods lack new “hero” icons. Watches are polarising, with high-end pieces thriving while tariffs and pricing pressures push more buyers toward resale. Shoes are lagging, and fine wines and spirits have disappointed overall, with only premium Italian reds and champagne showing resilience.
Experiential luxury tells a different story — one of vigorous, diversified growth. Gourmet dining is booming across Asia, the Middle East and global resort hubs, driven by younger travellers hungry for sensory and social experiences. Demand for travel activities, safaris, high-adrenaline adventure and elite sports continues to rise. Private jets and yachts remain strong growth segments, while the luxury automotive market faces volume declines across most tiers.
This shift has direct implications for Saudi Arabia’s luxury tourism ambitions. The Middle East is currently the strongest-performing luxury region in the world, with forecast growth of 4–6% in 2025. That performance sharply contrasts with China, which is expected to contract 3–5%, Europe, set to fall 1–3%, and Japan, which is cooling after last year’s tourism surge. The Americas remain essentially flat at 0–2%. Meanwhile, emerging markets in Africa, India and Southeast Asia — collectively around €45 billion in 2025 — are expanding but remain far smaller than the Gulf.
Against this backdrop, Saudi Arabia’s rise as a luxury destination looks increasingly well-timed. The Kingdom’s tourism strategy is rooted not in retail-led luxury but in experience-led luxury: nature, culture, wellness, bespoke hospitality, elite events and exclusive access. These are precisely the areas where global spending is accelerating.
The report also notes a global reshaping of the physical luxury footprint. Outlet channels are outperforming, monobrand stores have shrunk by 25,000 square metres in just six months, and US department stores have reduced luxury floor space by around 10% since 2024. As luxury brands shift toward fewer but more immersive flagships, destinations that deliver emotional engagement — not transactional retail — rise in strategic importance.
This is where Saudi Arabia’s advantage becomes particularly pronounced. The Kingdom is developing destinations that are designed from the outset to offer emotional texture: the monumental landscapes of AlUla; the pristine, low-impact islands of the Red Sea; the cultural vibrancy of Riyadh and Jeddah; the emerging wellness focus of Amaala; and a growing calendar of high-profile events across sport, arts and entertainment. These experiences are distinctive, place-based and difficult to replicate — exactly what the new luxury consumer values most.
The long-term outlook further strengthens the case. Bain forecasts personal luxury goods growth at 4–6% annually through 2035, with overall luxury spending reaching €2.2–2.7 trillion. But the growth will not be evenly distributed; it will favour destinations and sectors aligned with experience, emotion and authenticity.
For the luxury travel trade, the conclusion is unmistakable. As the world’s affluent travellers pivot from owning to experiencing, Saudi Arabia is not just aligned with the trend — it is positioned to lead it. The Kingdom offers the scarcity, cultural depth and emotional resonance that define the next era of luxury. In a market where meaning has become the final frontier of value, Saudi Arabia stands out as one of the most consequential luxury destinations of the decade.
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Photo top of page: Dieter Blom / Unsplash
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