What credit crunch? More luxury for new money: European rising stars & established markets

Abstract

Luxury goods and services have experienced an unprecedented rise in demand over the past few years. As disposable incomes grew across America and Europe, it is no surprise that the luxury sector has been one of the fastest-growing segments in recent years. High net worth individuals from emerging countries such as Brazil, Russia, India, China and the wealthy Middle East have also become more important for the luxury sector, thus allowing the demand for luxury to remain robust and continue to grow. This in turn had a positive impact on the luxury travel market with more people opting to stay in high-end accommodation. The luxury hotel sector has thus proven to be a dynamic industry that is interesting to many parties, including consumers, investors, developers and owners. On the other hand, after the credit crunch began at the end of 2007, the hotel sector as a whole has started to see a slowdown in investment, development and (somewhat) demand. This then leads us to ask: as global economies face challenging times ahead, will the luxury hotel sector be able to sustain the downturn? © 2009 Palgrave Macmillan.