Luxury spending is expected to rebound this year, driven mainly by experiences rather than luxury goods, according to a new study.

After two years of declines, luxury goods sales are expected to grow between 1% and 4% in 2026, according to a report from Bain & Co. and Altagamma. Personal luxury goods sales are projected to reach between 365 billion euros and 373 billion euros (US$413.6 billion to US$422.7 billion) this year.

The tensions in the Middle East continue to dampen sales. Dubai, United Arab Emirates, was one of the fastest-growing luxury markets in the world before the Iran war but relies heavily on tourism and has yet to show signs of recovery. The report said that if the Middle East stabilizes and demand in China strengthens, luxury goods sales could post growth this year.

The U.S. is now the leading country for luxury goods growth for the first time since 2021, according to the report. It said that growth in the U.S. is being driven in large part by aspirational consumers.

At the same time, the priorities and spending of wealthy consumers around the world is shifting. The report said travel, events and dining experiences are becoming more important than buying status goods for show. While luxury goods sales are expected to grow between 1% and 4%, experiences are on track for growth of between 3% and 7% this year, the report said. Bookings in dining, leisure and entertainment are up around 30% this year.

“What we’re seeing across experiential luxury this year is resilience concentrated in the categories that offer something money can’t easily replicate: time, access and meaning,” said Claudia D’Arpizio, a senior partner at Bain & Co. “Luxury is increasingly about how people live rather than what they own.”

Trips to nontraditional and less crowded destinations are growing. “Immersive wayfaring,” or bespoke, slow-travel experiences rooted in discoveries and traditions are also growing more popular. Travel to nontraditional locations is up 20%, according to the report. 

The report also cites the rise in “inheritourism,” in which wealthy families travel together and Gen Zers adopt the travel tastes and preferences of their parents.

Cruises in particular are drawing many first-time buyers along with repeat customers. Fine dining and gourmet food are being driven by a “less-but-better” mindset and fine arts are returning to growth.

“Consumers aren’t simply spending more; they’re spending differently, in pursuit of moments that feel personal and authentic,” D’Arpizio said.