Here's some validation for your next client pitch: When luxury consumers have extra money to spend, they're choosing travel over handbags, watches, and just about everything else.
The Business of Fashion and McKinsey & Company surveyed more than 2,000 luxury clients for their new report, "The State of Fashion: Face to Face With Luxury Clients," and asked how they'd spend an additional $5,000 of disposable income. Travel dominated across every client tier in both the U.S. and China — 38 percent of occasional U.S. luxury clients and 37 percent of established ones (those spending $10,000 to $50,000 annually on luxury goods) put travel first. Jewelry, the strongest product-based alternative, trailed well behind.
The category math backs it up. The report projects luxury hotels and fine dining will grow at a compound annual rate of 6 to 8 percent through 2030 — faster than any personal luxury goods category, including leather goods and jewelry (both 5 to 7 percent) and watches (3 to 5 percent). In the U.S., the world's largest luxury market at roughly $130 billion, hotels and fine dining are expected to drive overall luxury growth.
The report's authors argue that luxury value is increasingly measured in "moments and memories, not possessions," with emotional connection ranking as the number-one driver of brand desirability in both the U.S. and China — ahead of craftsmanship, heritage, and trends. One ultra-high-spending U.S. client interviewed for the report described buying a long-coveted bag while traveling with friends in Montecito, California, specifically so the purchase would be tied to the trip: "If I am splurging… I'd rather spend my money connected to a memory with my girlfriends."
Wellness is the other experiential thread worth pulling. Forty-five percent of U.S. clients said they're most interested in wellness-related experiences — spa days, self-care sessions, and the like — making it the top lifestyle category alongside travel and destination experiences. If you've been building out your wellness retreat portfolio, the data says keep going.
The report also flags how aggressively fashion and luxury brands are moving onto your turf. Among its executive priorities, it urges brands to capitalize on the desire to travel and partner with hotels, wellness brands, private clubs, and cultural institutions to embed themselves in clients' lifestyles. Brands like Orient Express Sailing Yachts got a shoutout. LVMH's 10-year Formula 1 partnership gets a nod, too, as a platform blending sport, entertainment, and hospitality.
One more nuance for your client conversations: American and Chinese luxury consumers are motivated differently. U.S. clients skew toward self-reward — purchases that reflect personal identity and lifestyle — while Chinese clients lean toward external expression and social confidence. Roughly 30 percent of clients in both markets said they'd prioritize travel when they have additional money to spend, but how you frame the splurge should depend on who's sitting across from you.
The full report is available from The Business of Fashion and McKinsey & Company.
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