There was an interesting article in The Times earlier this week, describing how the growing demand for ‘experimental luxury’ is boosting the traditional luxury sector.
Despite the UK being in recession, it appears that the wealthy are still spending.
Spending on experimental luxury grew 50% faster than spending on traditional luxury goods, such as jewellery. According to the Boston Consulting Group, over £498 billion will be spent this year on luxury experiences such as helicopter snowboarding and private chefs.
Those spending the money on luxury experiences are both the young rich and also older consumers who are spending their wealth in retirement.
The Luxe Redux: Raising the Bar for Selling of Luxuries study of affluent consumers found that the global market for luxury goods is expected to grow by 7% a year between now and 2012, with demand for luxury experiences growing by 12% a year.
Much of this growth is likely to come from emerging market economies, including China and Brazil.
When considering life goals as part of the Financial Planning process, we often find that our clients are as interested in experiences as they are in purchasing assets.
Landmark foreign holidays often play a big part in future planned expenditure. We can include the cost of funding holidays into lifetime cash flow forecasts for clients to ensure they will be able to experience specific countries and activities in retirement.
Photo credit: Flickr/dave watts
