Luxury goods are out, but luxury travel is in

As wealthy consumers trade handbags for hotel suites, the hospitality industry faces the same risks that once hit fashion

The luxury market is shifting from possessions to experiences, as affluent travelers increasingly choose five-star stays and exclusive journeys over designer goods. But as hotels race to expand their luxury portfolios, analysts warn they may repeat the fashion industry’s past mistakes — diluting exclusivity and overextending in pursuit of growth.

Key takeaways

• Shift from goods to experiences: Global luxury-hospitality spending is set to reach $390 billion by 2028, up from $239 billion in 2023, as affluent consumers prioritize travel over tangible luxury items.
• Luxury resilience: Despite geopolitical and economic headwinds, luxury hotel revenues per available room have risen every month in 2025, outperforming midscale and budget segments.
• Fashion brands move into travel: Labels such as Bulgari, Armani, LVMH, Dolce & Gabbana, and Burberry are opening hotels, yachts, and branded resorts to capture the luxury travel boom.
• Rising accessibility risks exclusivity: Just as fashion houses once targeted “aspirational” shoppers, more mass-market players like EasyJet Holidays are now offering luxury packages — potentially eroding the segment’s exclusivity.
• Hotel overexpansion warning: The number of global luxury hotel rooms is forecast to rise from 1.8 million to 2.2 million by 2030, prompting concerns of oversupply and weakened pricing power.
• Lessons from Hermès: True luxury lies in restraint — modest price rises, small-scale production, and a focus on craftsmanship and personal service, as exemplified by Hermès and boutique hoteliers like Rocco Forte Group.
• The personal touch endures: At properties like Brown’s in London, where staff greet guests by name, the essence of luxury remains not in marble or Michelin stars — but in how it makes guests feel.

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