HE luxury sector It had a turnover of up to 17,000 million euros in Spain in 2022 and plans to grow at an annual rate of 7-9% by 2027, reaching 23,000-27,000 million eurosPerspective of the high-end market in Spain, according to the Círculo Fortuny report with consulting firm McKinsey & Company. The growth in this segment of the market is largely explained by the rise of experience, which concentrates more than half of the market (51 percent compared to 49 percent) compared to goods and personal belongings.
The upper class contributes 0.5%-1% to Spain’s GDP with its sales. We should also add to this the 1% share provided by exports, which amounted to 20,000 million Euros and grew by 4% compared to 2017.This is a symptom of increasing international recognition, especially in Europe and the United States as the main target markets. At a global level, the report positions Spain behind rivals such as France and Italy, with 4.5% of the high-end market in Europe (€370,000 million) and 1% worldwide (€1.4 billion). twice that of Spain.
“Spain’s cultural and creative excellence is in good shape and will continue to grow in the coming years, consolidating its role as the engine of the economy. The shift in trend towards experience represents a tremendous opportunity that we must leverage as a differentiator in the global scenario“said Círculo Fortuny president Xandra Falcó in a press release sent to the media.
The current luxury sector growth is underpinned by rising local demand, which has increased by seven percentage points since 2019, particularly in segments such as fashion, accessories, leather goods and jewellery. On the contrary, Tourism levels in 2022 remain 6% below the last year before the pandemic, having a major impact on a sector that is highly sensitive to tourist flows.
Experience focuses on sales
Excellent performance of experiences such as haute cuisine, hospitality, hospitality and wellness or events, representing more than half of the Spanish market, have strengthened over the past five years, gaining three percentage points compared to personal assetsThus, it is establishing itself as a differentiator in the global high-end market and is showing double-digit growth. In particular, haute cuisine and hospitality increased by 13%, hospitality and wellness by 11%, and events and entertainment by 31%. All together they represent 8.6 billion euros.
“To have information about new segments of the customer profile, Improvement of brand-industry positioning, promotion of unique products and services, as well as geographical expansion by size and size and finding new hubs are some of the driving forces behind the industry’s huge growth opportunity,” says Carlos Sánchez Altable, partner at McKinsey & Company.
As for personal items, there are also exceptions such as the cosmetics and perfume industry, among the slight decrease in sales of 8.4 billion euros. Since 2019, this category has grown by 8%. However, during the same period, a 10% decline was recorded in revenues from fashion, accessories and leather goods; There was a slighter decrease of 6% in jewelry and 3% in furniture and interior decoration. Looking ahead and with a horizon of 2027, all luxury, experience and personal goods categories are planning to grow. The largest increases will be experienced in the hospitality and wellness (up to 14%), events and entertainment (10%), cosmetics and fragrances (10%), haute cuisine and hospitality (8%) and furniture and interior decoration (8%) sectors. ..
“Despite global economic fluctuations, Spanish high-end sector sees bright spots on the horizon. There are a number of positive trends that will allow it to increase its position as a top reference point in Spain for solid growth. “Achieving this requires a dual action on the part of industry managers: further internationalization and creating ecosystems within the national market: poles of local luxury at a certain scale,” explains Ignacio Marcos, senior partner at McKinsey & Company.
Tourist markets
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The report points to three important regions as the main opportunity focus for tourists consuming luxury products: China, the USA and the Gulf countries. In the case of China, tourists carry out 13% of transactions tax free In Spain they only concentrate 30% of the spend, so attracting this consumer is very important. Among their preferences, valuing local brands, high craftsmanship and design, as well as shopping from the physical store in the destination, prosperity and sustainability are among the rising values among them.
About the United States, 68% increase in tourist arrivals between 2017 and 2022represents 7% of the total volume tax free. Finally, the Gulf countries (Saudi Arabia, Bahrain, Kuwait, Oman, United Arab Emirates and Qatar) represent the fastest growing segment for tourism, with one million high-end consumers.. While consuming products and experiences, they seek exclusivity, as well as showing great interest in jewelry products.