Across continents and generations, the travel and tourism business – the world’s largest industry – offers glamour and excitement which few other sectors can match.
A key pillar of global economies, the travel sector was one of the hardest hit by the international Covid-19 crisis but fast forward to 2022 and the sector is not only inching back to profitability but has – in key markets across the globe – boomeranged back to pre-pandemic levels and, in some cases, even surpassed them.
For example, Dubai has been ranked as the most popular destination in the world for 2022 according to the Tripadvisor 2022 Travellers’ Choice Awards.
One of the world’s leading Covid-19 vaccination drives, the recently concluded Expo 2020 Dubai and a busy calendar of events have been key factors in this country’s rapid recovery and have cemented Dubai’s position as the destination of choice for international travelers.
The influx of visitors comes with it not only a welcome boost to the UAE’s vibrant travel and tourism sector – but an important driver of one of Dubai’s key markets; luxury retail spending.
Travel and luxury often move in tandem. When one booms, so does the other. And while, like the tourism sector, luxury goods took a knock during the height of the pandemic as demand dropped sharply amid changing consumer purchasing behaviour, the luxury industry is mirroring a resurgence.
For example, in January 2022, the fine jeweller Cartier reported a 30 percent increase in global sales during the last three months of 2021 compared to the last quarter of 2020, while Italian fashion house Prada earned 8 percent more this year than pre-pandemic sales in 2019.
Louis Vuitton, Dior, and BMW all have released earlier-than-expected reports in mid-January boasting sales that have far surpassed those in 2020, and even outpaced pre-pandemic sales.
Indeed, some traditional items — fine watches, jewelry and classic, exclusive handbags such as the Hermès Birkin — maintained strong sales throughout the pandemic. What is evident is the luxury goods market has been able to demonstrate its resilience in the face of widespread pandemic-related disruption.
A recent report by management consulting company McKinsey & Company predicts a gradual ramp-up in international travel will lead to a further boom in the luxury spend market.
And there is nowhere more associated with luxury spending than Dubai. A fashion lovers’ paradise; Dubai has become synonymous with ultra-high-end brands and a fast-growing luxury goods industry, with many leading brands boasting flagship stores across the emirate.
High profile events such as the Louis Vuitton, SEE LV Exhibition and the launch of the Jimmy Choo x Mugler collaboration are now increasingly prevalent alongside other events that champion the luxury sector including International Fashion Week Dubai, and Dubai Shopping Festival – the world’s longest-running retail festival which is a month-long extravaganza staged between December and January every year.
More recently, Cartier – one of leading global luxury brands – hosted its annual celebration of Ramadan with the Al Manama majlis which saw the Cartier Maison pay homage to its longstanding relationship with the Middle East, dating back to Jacques Cartier’s first visit to the region in 1912.
Over the past two years, the pandemic’s perpetual reminder of life’s impermanence has shifted our cultural bedrock. Covid-19, for many, altered our sense of time. We were forced to take stock of our lives and it also marked a profound change in the way global luxury consumers live and shop, and in what they value. Far from disappearing, travel and timeless luxuries – rather than fast fashion – have proved more central to our lives than ever.
So, after an era of tremendous shifts, it is no surprise that the luxury industry is coming out of the crisis with more purpose and dynamism than ever before.
Ahmed Al Khaja, CEO of Dubai Festival and Retail Establishment (DFRE).
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