Kicking off 2021 with a fresh outlook isn’t easy in the middle of a pandemic and global lockdowns, but we ask; what are the positives to look forward to this year?
Luxury international travel is back on the agenda, and sales of luxury cars, watches, and real estate are booming. Meanwhile, fashion and couture brands have pivoted to offer consumers access to their collections virtually, arguably making everyone a fashion critic.
We take a look at a slightly more optimistic outlook and what people will be spending their money on in 2021.
- The private jet sector looks to recover quickly from the COVID-19 pandemic as wealthy travellers opt for private luxury travel.
- Tesla posts first year of profit and luxury car brand Bentley posts record sales in 2020.
- As the pandemic continues to erode revenue the Swiss watch industry focuses on its new number one market.
- Luxury fashion and lifestyle brands are leveraging technology in 2021 with remote fashion weeks.
- The year ahead in luxury real estate. In the U.S., home prices have reached record highs as buyers looking to exit cities are seeing intense competition for suburban homes.
Wealthy travellers opt for private luxury travel
While commercial flights have dropped by three-quarters since the start of the pandemic, wealthy travellers are chartering private jets to avoid lockdowns and maintain a luxury lifestyle, with private flights operating at around 70% of pre-pandemic levels in December.
Travel data shows that luxury destinations for private jets leaving the UK in late 2020 include yacht destinations such as the Maldives, the UAE, and the Caribbean. Whereas traditional European destinations such as France, Italy or Austria, were less popular, due to closed ski resorts.
But this luxury travel option is no longer only for the wealthy, private jet operators are reporting first-time leisure travellers wanting to limit exposure to COVID-19 and taking advantage of heavily discounted single trips on planes that need moving between airports and that would otherwise carry no passengers.
Tesla posts first year of profit and luxury car brand Bentley posts record sales in 2020
Tesla has posted its first-ever annual profit, making it the world’s most valuable car manufacturer. The electric car brand, led by Elon Musk, reported a profit of $721m for 2020 compared to a loss of $862m a year earlier. The stock has risen by 700% in the past year, boosting the car brand’s value to more than $800bn and surpassing Toyota.
Luxury car manufacturer Bentley recorded record sales of 11,206 cars in 2020, 2% than in 2019, thanks to a 48% increase in Chinese demand.
The Swiss watch industry focuses on its new number one market
Exports of Swiss watches to China totalled $2.39bn in 2020, an increase of 17.1% in 2019, thanks mostly to the global pandemic suspending international travel, and instead, driving local sales domestically. China is now the world’s largest market for Swiss watches.
This shift in destination spending has meant luxury watch brands having to adapt digital marketing and sales strategies to appeal to this new luxury domestic market. Last summer, a number of luxury watch brands opened stores on Tmall Luxury Pavilion, the Chinese online marketplace operated by the Alibaba Group, which now lists products from more than 200 luxury brands.
Luxury fashion and lifestyle brands are leveraging technology in 2021 with remote fashion weeks
Virtual fashion weeks are predicted – at least in the short term – to be the future of how luxury fashion brands present new collections, with most focusing on digital fashion shows.
Some luxury brands are even going one step further, moving their shows to China, following the country’s quick recovery from the global pandemic. When luxury stores were closed, Chinese consumers turned to ecommerce for the first time — and are predicted to keep shopping there.
Already luxury’s fastest-growing market, China will become even more important in 2021 as customers buy more lifestyle goods and luxury items such as watches in their home country.
The year ahead in luxury real estate
The COVID-19 pandemic has seen an unprecedented shift in lifestyle choices and real estate needs, marked by an overwhelming preference for larger homes, more amenities, and the drive to live in less-populated areas.
In the U.S., real estate prices have reached record highs as buyers looking to exit cities are seeing intense competition for single-family suburban homes, now in short supply.
Driven by the need for private outdoor space and enough room to work remotely, New York City saw a mass exodus last year at the height of the pandemic, and London saw families moving out of the city to country homes, thanks to a stamp duty holiday.