Saudi Arabia is driving the Middle East towards the top of luxury luxury by 2025 – Report
Luxury spending in the Middle East is forecast to grow between 4 percent and 6 percent by 2025, led by Abu Dhabi, it said on Monday.
The Outlook places the Gulf as the most powerful luxury region in the world, at a time when the capital markets, are expected to contract as found in the Bain Monerem Study, according to the Bain market research published by the Italian Bondly Altagamma.
The Middle East is leading the Luxury Boom
Globally, luxury spending is expected to reach € 1.44 trillion (approx. US $ 1.58 Trillion) in 2025, as the industry is prone to economic issues, environmental disruption and consumer change.
Bain said performance in the Middle East was boosted by strong tourism in Dubai and Abu Dhabi and strengthened luxury in Saudi Arabia, underscoring the growing importance of the region for global brands.
“After the Splow Spree era, experiences and emotions have become the real engine of luxury growth,” said Claudia D’Arizizio, senior partner at Bain and lead author of the study. He said the market remains strong but continues to undergo a structural reset driven by selective consumption and experiential consumption.
Dismissing opportunities for comfort based on findings
The study found that consumers around the world are increasing their spending money towards more practical conveniences, including hospitality, travel, fine dining and food and more traditional goods categories. This change is described by Bain as a “Tectonic” Change in the industry.
The global luxury goods market is projected to total €358 billion (approx. US $394 billion) in 2025, a flat year. Bain said ultra-wealthy buyers continue to seek luxury in the high-end market, while aspiring drivers have pulled back under pressure from higher prices and rising living costs.
Within personal luxury goods, jewelry is expected to lead growth this year with an increase of 4 percent and 6 percent, supported by strong demand and emotional appeal. Eyewear is forecast to grow between 2 percent and 4 percent, while perfumes remain the most dynamic segment within beauty, the study said.
Across other luxury segments, Bain said luxury cars are showing resilience while yachts and private jets continue to enjoy strong demand. Fine art markets are amazing, while designer furniture is strong. Fine wines and spirits deliver weak results, although sparkling Premium and Italian Reds continue to emerge.
World’s Worst Luxury Revival
In the region, the global image remains fragmented. Luxury spending in China is expected to grow between 3 percent and 5 percent by 2025 as Demot pivots toward local products that are readily available and experience-driven sectors. Japan’s luxury market is seen to be Desenerating after 2024 strong due to cooling tourism.
Europe’s luxury market is predicted to fall between 1 percent and 3 percent this year, the weight of which is reduced by reducing tourists, the euro and geopolitical tensions. The Americans are expected to hold firm with growth between 0 percent and 2 percent, supported by domestic demand in the United States and expanding comfortable footprints in Mexico and Brazil.
Bain said emerging regions, including the Middle East, Latin America, Southeast Asia, India and Africa comprise a luxury market of €45 billion (approx. US $49.5 billion) by 2025.
The Consultancy also said that Global LuxURY’s consumer base continues to shrink. The number of luxury consumers fell to about 340 million in 2025 from 2025 million to 2022 million
Profits across the luxury industry are also under pressure. Bain estimates that earnings before interest and tax on select luxury goods will fall between 16 percent and 16 percent by 2025, bringing margins back to 2009 levels.
Despite the slowdown in headline growth, Bain said the long-term outlook for luxury remains positive. Personal luxury goods are still expected to grow at an average rate of between 4 percent and 6 percent per year by the year 2035, when the money spent is €500.7 billion.
