If you ask anyone on the globe what they know about the UAE, the term “luxury” will almost always come up sooner rather than later. Particularly in the eyes of the world, Dubai is a city full of custom sports vehicles, high fashion, and penthouses costing millions of dollars.
The Emirates is home to a rich cultural history, a thriving arts scene, and a knowledge-based economy that is constantly expanding and has a track record of luring top talent worldwide.
Business of Luxury
According to data made public by ResearchandMarkets.com, the size of the luxury market in the UAE reached $3.5 billion in 2021.
Comparing these numbers shows that the UAE contributed more than 1% of total luxury spending in 2021 despite constituting only 0.1% of the world’s population. And from 2022 to 2027, the luxury market in the Emirates is projected to increase at a compound annual growth rate (CAGR) of 6.82 percent, exceeding the projected international CAGR of 5.4 percent.
With its thriving economy, booming financial services, and stable political environment, Dubai has established itself as a benchmark in the Middle East, drawing an increasing number of investors and many high-end fashion and luxury brands.
Due to its accessibility to foreign capital, its role as the center of considerable investment, including that for the Dubai Mall, as well as the high caliber of its infrastructure, prospects for luxury, and its reputation as a well-managed company, Dubai is emerging as a critical hub.
UAE Luxury Market Analysis
Here is an overview of some critical data related to the UAE luxury market:
- Market Size: The UAE is the largest market in the Middle East, with an estimated $8.3 billion in value, according to a report by Bain & Company. The report further mentions that through 2025, the UAE’s luxury market is anticipated to expand at a CAGR of 4-5%.
- Consumer demographic: High-net-worth individuals dominate the luxury market in the UAE, and a sizable number of these people are foreigners. A Wealth-X research estimates that there are about 8,000 extremely wealthy people in the United Arab Emirates, with a total net worth of $1 trillion.
- Luxury Fashion Industry: One of the main propellers of the luxury market in the UAE is the high-end fashion sector. According to a survey by Euromonitor, womenswear accounted for the majority of the UAE’s $3.5 billion luxury fashion market in 2020.
- Luxury Hospitality Industry: The United Arab Emirates is well-known for its opulent hotels and resorts, with Dubai and Abu Dhabi being well-liked vacation spots for affluent tourists. According to STR research, the average daily fee for premium hotels in Dubai was approximately $271 in 2020.
- Luxury Real estate Industry: A crucial element of the luxury market is the market for luxury real estate in the United Arab Emirates. According to a Knight Frank analysis, prices in Dubai’s best residential real estate increased 1.4% in the first quarter of 2021, with villas and apartments in sought-after neighborhoods commanding high prices.
Overall, the UAE’s luxury market is anticipated to expand over the following years due to its robust economy, expanding tourism sector, and high-income levels among its citizens.
