The Gulf luxury market remained a drag on global growth in the first half of 2026, with the region’s luxury consumer base shrinking by 15% to 25% amid geopolitical tensions, even as spending by Middle Eastern visitors to Europe began showing signs of recovery in the second quarter, according to a new Bain & Company-Altagamma study.
The report said the global personal luxury goods market is expected to grow 2% to 4% this year to €365-€373 billion, recovering from €358 billion in 2025, while total global luxury spending is projected to remain broadly stable at €1.44-€1.47 trillion.
“The regional picture is one of sharp divergence, with the Americas surging while Europe and the Middle East drag on overall growth,” the report said. It attributed the Gulf slowdown to the impact of regional conflict, which also reduced Middle Eastern tourist spending in Europe during the early months of the year. However, tax refund data from May indicated improving spending by Middle Eastern visitors compared with April, suggesting that both Europe and the Gulf could be turning a corner.
The study found that luxury experiences continued to outperform physical goods, with consumers increasingly prioritising travel, hospitality and immersive experiences over ownership. It also highlighted a rapid shift in consumer behaviour, with around half of luxury shoppers now consulting the second-hand market before making a purchase and a similar proportion already using artificial intelligence during their buying journey.
Travel retail in the Gulf remained volatile during the first half of the year, reflecting broader regional uncertainty. Nevertheless, Bain expects the global luxury market to stabilise in the second half, provided geopolitical conditions continue to improve and consumer confidence recovers.
