For the first time in decades, major luxury brands are seeing their revenue and\/or profits decline across the board. But why? Is the luxury industry in trouble?… <\/p>\n\n
Let’s start by trying to define what “luxury” is, if you don’t mind.<\/p>\n\n
In the Roman sense of the term<\/strong>, the origin of the word \u201cluxury\u201d can be traced back to the Latin \u201cluxuria<\/em>,\u201d which means \u201cextravagance or excess.\u201d The ancient Romans used \u201cluxuria\u201d<\/em> to describe a rebellious lifestyle and sinful excesses. <\/p>\n\n In a purely literary sense<\/strong>, dictionaries define it as a \u201clifestyle characterized by lavish spending on nonessentials,\u201d meaning opulence, superficiality, and abundance.<\/p>\n\n In the French sense<\/strong> of the term, one would tend to talk about exceptional quality, rarity, and price (for once, we\u2019re world champions in a field other than taxes\u2026).<\/p>\n\n In the real estate sense<\/strong> of the term (let\u2019s get back to the topic at hand\u2026), we\u2019ll be talking about exceptional locations, large floor areas, breathtaking views, rare amenities\u2026 and price.<\/p>\n\n It\u2019s clear\u2014even if everyone in the press is trying to reassure themselves and others by claiming the opposite\u2014that the luxury sector is struggling. At least, in its usual sense. The more diplomatic version of this narrative is often: \u201cLuxury is holding up better than the rest.\u201d That is undoubtedly true. But what is even more true is that it has changed\u2014at the very least, in its form and in the way it is consumed. <\/p>\n\n In the real estate sector, we\u2019re seeing a shift toward a \u201c lifestyle<\/em> \u201d approach rather than a focus on specific properties that meet standard criteria. The same is true in the travel industry: demand is shifting away from classic 5-star resorts on turquoise coastlines and toward \u201cadventures\u201d (albeit in settings that are still quite comfortable\u2026): safaris, boutique hotels, cultural experiences, remote islands… On another level, the CEO of Airbnb has also noted strong growth in bookings for \u201cunique\u201d accommodations (treehouses, secluded spots, original themed and immersive experiences\u2026). <\/p>\n\n While it\u2019s true that a wealthy young Asian woman will always want a Herm\u00e8s bag, she\u2019d rather come to Paris to buy it (for the experience, the authenticity, the trip\u2026) than in Hong Kong, even though that would be more convenient for her.<\/p>\n\n One thing, however, remains intangible: service. The world\u2019s affluent clientele is willing\u2014and will always be willing\u2014to pay a premium for service that is perfect, original, flawless, and proactive. Perhaps there is still significant room for improvement in this area? <\/p>\n\n