Pucci sets, branded beach clubs and Aperol Spritzes aplenty. If our Instagram feeds are anything to go by, Euro summer is in full swing. But luxury’s latest spate of earnings paints a different picture. Brands are noting lower purchases from tourists, meaning lower revenues overall for the quarter.
Ferragamo, Prada Group, Burberry, Moncler and Kering all attributed EMEA (Europe, the Middle East and Africa) second-quarter revenue declines to lower-than-usual touristic spending in Europe. Moncler saw an 8 per cent decline in the region for the second quarter, as executives noted declines in tourist flows from both America and Asia. “As a reminder, Q2 and Q3 are the quarters with the highest penetration of tourism usually in Europe,” said Roberto Eggs, Moncler Group chief business strategy and global market officer. It’s not just Europe, either. Japan’s performance is also on the decline this quarter, thanks to a decrease in Chinese visitors to the country.
The Europe travel shopping dip wasn’t anticipated at the start of the year. The number of Americans flying to Europe was up 6 per cent year-on-year in the first five months of 2025, per the US National Travel and Tourism Office. But an April survey conducted by the European Travel Commission (ETC) found that just 33 per cent of US respondents intended to visit Europe this summer, down 7 per cent from 2024. “[This suggests] that economic uncertainty in the early part of the year caused at least some would-be travellers to rethink their plans to head overseas,” says Rachel Wolff, retail and e-commerce briefing analyst at market research firm Emarketer.
It’s down to a range of factors putting pressure on consumers. Bernstein luxury goods analyst Luca Solca cites a significant depreciation of the US dollar relative to the Euro, on the back of Liberation Day tariff announcements and new US administration policies. Chinese consumers, meanwhile, continue to suffer from low confidence levels, he says. The Chinese shoppers who took advantage of the weak yen in 2024 to “scratch their luxury itch” are now pulling back, says Wolff. “[This] hasn’t supported the tourist revival we had seen in the first quarter of 2025,” Solca says.
Such a revival was meant to be a major boost for European luxury, for which local spending was down in 2024. Last year, tourist spend was on the up as tax refunds creeped up to pre-pandemic levels, when 40 to 50 per cent of European luxury revenue was made up of international tourist spend. But a year later, the opposite has come to bear.
It may not be as dire as it seems. Though tourism flows were sluggish in early summer, they’re picking back up, says Colin Murphy, manager at BCG Vantage. ETC initially reported a dip in travel intent in June, but by mid-July, noted a 3.3 per cent increase in international tourist arrivals for Q2 2025, he notes, adding that airline capacity data supports this: inbound seats to Western Europe in August are up 8 per cent from North America and up 7 per cent from Asia, per aviation data firm OAG. US carriers (American, United, Delta) also cited solid transatlantic demand in the second quarter. Even so, a later-than-usual return to the norm may not be enough to recoup brands’ lost second-quarter dollars.
As travel picks up, there’s no guarantee that those travelling now will spend as they have in previous years. While holidays are notoriously a chance to splurge, those forking out for trips abroad may not be wanting to increase their spending on already-pricey trips, experts say. “Without the stronger dollar boosting purchasing power, the aspirational customers who helped drive the post-pandemic luxury boom are choosing to either stay home or buy less while abroad,” Wolff says. Solca agrees: “Americans who already booked their holidays may have come to Europe nevertheless, but they may also have been more prudent with their spend.”
Will this be a trend for years to come? It’s too early to say, but analysts aren’t anticipating a US comeback anytime soon. “I am not sure we should be sitting on the edge of our seats waiting for the Americans to return to recent heights, as this was way above anything we had seen in the past,” Solca says, especially if inflation and subdued US dollar continue to impact spending power. Wolff agrees, noting that if tariffs are, as expected, a major hit to US buying power, it could make European summers unaffordable for a growing number of people.
Solca is more optimistic about Chinese consumers, “if and when” their economy regains traction. But even this remains unclear.
The imposition of 15 per cent tariffs on imports from the EU could, ironically, drive at least a portion of US luxury spending to shift back to Europe, Wolff says, “as shoppers — both affluent and aspirational — look for better deals on designer products”.
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