Oh, to be a luxury consumer — staying at the Four Seasons, shopping at Louis Vuitton, eating at restaurants with more Michelin stars than the number of ex-husbands per Real Housewife.
In the travel and hotel industry, we look at those luxury consumer trends and spend through the lens of luxury hotel brands. For the last few years of course, the bifurcation between higher-end stays and lower-end stays has been prominent. Wealthy travelers continue to pay top dollar to stay in luxury hotels and resorts despite global inflation and dipping consumer confidence.
This week, I was interested in an article on luxury retail chain expansion by my CoStar News colleague Linda Moss, who covers national retail trends. She cites a JLL report showing that upscale chain store (think Louis Vuitton, Dior, Van Cleef & Arpels and the like) growth in the U.S. "substantially increased" in the first half of this year compared to the same period last year.
New York is the long-favorite destination for luxury retail, getting 42 new openings between July 2023 and 2024, Moss reports. Southern California, of course, is another hotspot.
There is one crack visible right now in the seemingly limitless Baccarat crystal ceiling: The slowdown in global tourism.
“This year’s decline in international visitors to gateway markets such as New York City, Los Angeles, and Miami is expected to impact luxury retail,” the JLL study reports.
But just like U.S. luxury hotels, luxury retailers likely will see some of that loss offset by still-wealthy domestic travelers.
And while tariffs and an uncertain economic future aren't having much of an impact on high-end shoppers immediately, according to the report, those things remain a high concern. It's interesting to read that LVMH is expanding U.S. production by adding a second facility in Texas, while other luxury retail brands already are getting consumers prepared for higher prices.
Long story short, there is a lot of overlap in the luxury travel, retail and hotel spaces so it pays to keep an eye on trends.
One other interesting spot: Just like in luxury travel, younger consumers are driving sales in luxury retail, according to the JLL report. Tapestry's Coach (the parent company also owns Stuart Weitzman and Kate Spade), Prada Group's Miu Miu and OTB Group's Diesel brand are examples of luxury retail brands aimed at younger shoppers looking for a different type of luxury experience. Think, luxury spinoff brands.
Retail brand companies react to demographics data like that, I'm sure, by considering new brand and product extensions. I think of it like this: The wealthy 30-year-old may not be able to afford a full set of LV logo luggage, but he can buy the LV logo baseball cap. The brand's luxury cache is still protected, and more consumers get exposed to the power and draw of luxury early on.
Social media strategist Harshita Agarwal calls this "the little treat culture" of small luxuries.
That doesn't really happen the same way in the luxury hotel and resort space. Our industry's venerable luxury brands instead are reinventing to appeal to younger travelers. That 30-year-old in the LV baseball cap may not be able to stay for a week at the Carlyle in New York, but he can get a drink at the bar.
But remember this, as our newsroom's resident youth expert, Trevor Simpson, reminded me: "There's also the social currency of it all. Yeah, you can flex an expensive hotel stay I guess, but there's probably more bang for your buck buying cool clothes."
The little treat.
Time to start promoting those Four Seasons logo baseball caps in the gift shops? Are they even cool? Email me or find me on Twitter or LinkedIn.
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