The Middle East luxury sector is on track to outperform all global regions in 2025, with Saudi Arabia and the United Arab Emirates driving strong demand and tourism-fueled growth. A report by Bain & Company reveals that luxury spending in the region is expected to expand by 4 to 6 percent, outpacing Europe, China, and the Americas despite global economic uncertainty.
Luxury brands are turning to Gulf markets as affluent consumers in Riyadh, Dubai, and Abu Dhabi continue to spend on high-end goods and experiences. The report underscores that while global luxury demand is flattening, the Middle East is becoming an essential growth hub for global labels.
Tourism and High-End Demand Power Growth
According to Bain, robust travel to Dubai and Abu Dhabi, coupled with Saudi Arabia’s growing appetite for premium products, has made the Gulf region the most dynamic luxury market globally. “After the shopping spree era, experiences and emotions have become the true engine of luxury growth,” said Claudia D’Arpizio, Bain’s senior partner and lead author of the report.
Shifts in Global Luxury Spending
The report shows that consumers are shifting toward experience-driven luxury—including fine dining, wellness, and hospitality—rather than traditional goods. The personal luxury goods market, estimated at €358 billion (US$394 billion) in 2025, remains steady but increasingly shaped by emotional value and lifestyle appeal.
Jewellery is set to lead growth with a 4–6% rise, while eyewear and fragrances also show resilience. Meanwhile, demand for high-end cars, yachts, and private jets remains strong, highlighting the diversification of luxury spending across sectors.
Global Outlook and Market Fragmentation
While the Middle East luxury market flourishes, other regions face stagnation. China is forecast to contract by up to 5%, Europe may decline by 3%, and Japan’s growth is cooling after a strong 2024. In contrast, Gulf nations are cementing their position as a key pillar of global luxury consumption.
Despite declining profit margins and fewer active shoppers worldwide, Bain projects long-term luxury expansion, forecasting annual growth of up to 6% through 2035. With the Gulf at its core, the luxury landscape is evolving toward experience, exclusivity, and enduring emotional connection.
