Cars, travel and art, among the luxury categories in which millionaires spend the most

With the pandemic, it has become clear that after the storm there is always calm and also luxury spending. Bain & Company figures show that in 2021, the world’s millionaires spent more than US$1.2 trillion in this market.

When looking at the most demanded categories, luxury cars stand out with 599,000 million US dollars. Despite the fact that it was a difficult year for the industry due to the shortage of chips and the logistics crisis, brands such as Ferrari managed to deliver over 11,500 units.

The Italian company achieved an increase of 22.3% compared to 2020 and 10.1% compared to 2019. The global industry, on average, presented an increase between 7% and 9% compared to 2020 .

Luxury personal items also made up a good chunk of tycoon spending in 2021. The consultancy records that more than US$307 billion was moved, a 29% increase from what was recorded in 2020.

“You see ‘revenge spending’ where revenge is the key word. Consumers are fed up with the limitations that the situation has generated, despite everything, consumers decide to indulge themselves and make up for the lost time they have experienced in the pandemic,” said Lina Bustillo, consultant and expert writer on the luxury.

In that same line of returning to normalcy, there is an increase in experiential categories such as luxury hotels, which by 2021 have moved some $85 trillion, or 20% more than in 2020.

Levels have yet to reach pre-pandemic figures and remain 58% lower than what was charged in 2019. However, the market is optimistic about the return of travelers, this can be seen with announcements by major chains opening new hotels and resorts.

Some of the planned openings for this year are: Nobu Hotel Atlanta, USA; COMO Le Montrachet in Burgundy, France; Raffles London at The OWO, UK; La Résidence Douz, in Tunisia and the Emerald Faarufushi Resort and Spa in the Maldives.

These places, in addition to their flashy facilities and luxury services, also point you to memorable dining experiences. Another category in which millionaires invest their money. In 2021, the gourmet food category moved US$53 billion and the luxury wine and spirits category moved US$83 billion.

“Now unforgettable experiences and moments are treasures. Luxury is revalued, it is no longer about flaunting wealth and luxury goods no longer have the same stigma as before,” added Bustillo.

Luxury cruise ships, once in high demand, have failed to recover from the scars of the pandemic. Last year, the contraction in sales was 40% compared to 2020 and 80% compared to 2019.

Despite the panorama, this year several lines offer routes, including the Celebrity Beyond, on its route through the Mediterranean Sea; the enchanted princess; the Baltic Sea and the Regal Princess sailing along the Greek coast.

This type of experience has been appreciated by travelers, as it not only offers the possibility of visiting several destinations in a single trip, but also high-end services on board such as Michelin-starred dishes, a luxury spa and live shows.

In terms of transport, luxury yachts and jets managed to move 24 billion dollars last year, the figure was one of the most stable in the entire luxury market, with an increase of 1% per compared to 2020.

Finally, another category that has caught the attention of the luxury market is that of fine artss, with an expenditure of $37,000 million. The figure presented an increase of 18% compared to 2020.

This year, and in the face of the crisis caused by the Russian invasion of Ukraine, many millionaires have seen in art a refuge for their fortune, due to its tendency to revaluation.

Regarding market expectations for 2022, Boston Consulting Group and Altagamma predict a 5% increase in personal luxury purchases.

Price increase to maintain exclusivity
One of the strengths of luxury brands to stay in this category is not affordable for all consumers and the quickest way to achieve this is to raise prices. This year, for example, Chanel (which in 2021 was the second most valuable luxury brand on the market, $47,054 million) raised the price of its bags by 17% in January and another 5% in March. This practice, which had been blamed on the pandemic and its consequences, was joined by other major companies in the market such as Louis Vuitton, Gucci, Rolex, Hermès and Dior.

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