MILAN — While it will take awhile to return to pre-pandemic levels, the slow comeback of international travelers, excluding those from China, will drive the growth of the luxury sector in Europe next year, according to Altagamma Consensus 2022 research released Thursday.
Worldwide, in 2022, the sector’s EBIDTA margin is slated to grow 11 percent compared to 2021.
As highlighted by Altagamma general director Stefania Lazzaroni, the luxury goods sector in the Old Continent is expected to increase 8 percent. The return of tourists will also contribute to the 7 percent growth which is expected in the United States in 2022. After the incredible double-digit growth rates posted in 2021, forecasts indicate that the luxury market in China will grow 9 percent next year. A new normal is also expected to define the growth of the luxury segment in the Middle East, which, according to Altagamma, will see an increase of 7 percent.
The appetite for luxury goods of Chinese consumers is expected to continue to grow in 2022, with the largest part of their purchases made within their domestic boundaries. Middle Eastern and North American luxury shoppers are expected to travel more, contributing to the growth of the sector, especially in Europe.
As research conducted by Global Blue pointed out, a partial comeback of tax-free shopping in Europe already occurred last summer, when the total volume of tax-free transactions in Europe amounted to 38 percent of those registered in the same period of 2019. The growth, compared to 2020 levels, was driven by luxury shoppers traveling from the Gulf region and from the United States. The European countries that most benefited from the return of international visitors are those that announced a loosening of severe travel restrictions before the summer, including Greece and Turkey, but other countries, including France, Italy and Spain, also saw some return in global tourism.
In particular, European countries benefited from the large disposable income of the wealthiest Gulf shoppers, who shifted to other destinations a part of the money that they used to spend in the U.K., where tax-free shopping was banned earlier this year.
At the same time, U.K. shoppers, who after the Brexit can take advantage of the tax-free option, increased their spending in Europe. Even if they still account for only 3 percent of the total tax-free shoppers in Europe, average spending for each traveler is 1,500 euros, more than twice that of other European consumers. France, Spain and Italy were their favorite tax-free shopping destinations last summer.
While luxury shoppers are surely keen to return to traveling, according to Altagamma, online retail is the distribution channel that will increase more in 2022, registering a 15 percent growth rate. With 50 percent of luxury purchases finalized via e-tail, the digital wholesale channel is seen growing 13 percent. Physical retail and wholesale are expected to see their business grow 9 and 4 percent, respectively.
Among the best-performing categories, jewelry and leather goods are slated to increase 10 percent and 11 percent, respectively.