Europe’s Luxury Sector: Economic Powerhouse in Need of Support, Says ECCIA Report

A recent study on Europe’s luxury and high-end sector reveals its vital role as a €986 billion economic engine, driving job creation, tourism, and craftsmanship.

The report, commissioned by the European Cultural and Creative Industries Alliance (ECCIA), highlights that the luxury sector accounts for 5% of the EU’s GDP and continues to stimulate economic growth, safeguard cultural heritage, and promote excellence globally.

Carried out by Bain & Company for ECCIA, the report also emphasizes Europe’s leading role in the global market, holding a 70% share in the global luxury sector and 80% in personal goods. However, the outlook is clouded by challenges such as tariffs and trade uncertainty.

Despite these external pressures, the sector sustains approximately 2 million jobs across Europe, with concerns raised about the future workforce, particularly the difficulty in attracting and retaining skilled artisans.

Claudia D’Arpizio from Bain & Company commented, “European luxury goods remain dominant in global markets, with impressive performance over the past five years and a strong growth trajectory. This success is rooted in the sector’s resilience and its ability to seize emerging opportunities.”

She added that luxury and high-end goods constitute 11.5% of Europe’s total exports, but their importance transcends mere economic value.

Luxury: Europe’s Soft Power

According to the report, luxury brands, through their products and experiences, symbolize Europe’s soft power—embodying creativity, innovation, and craftsmanship. This sector, often referred to as Europe’s “artisanal intelligence,” not only contributes to economic prosperity but also invests heavily in education, training, sustainability, and innovation, further enhancing social and cultural development across Europe.

However, the sector faces significant challenges, including escalating geopolitical tensions, rising tariffs, and protectionist policies—especially between the US and China, which together account for 35%-45% of global luxury revenues.

Michael Ward, Managing Director of Harrods and ECCIA president, expressed concerns: “While it may seem that the sector is insulated from some economic disruptions, we remain attentive to emerging warning signs.” He noted that luxury brands supported 2 million jobs in 2024, with 160,000 new positions created since 2019, outpacing the broader EU job market growth. Yet, rising tariffs threaten to disrupt demand, increase costs, and force companies to reconsider their supply chains, demanding greater stability.

Luxury and Tourism

The luxury sector plays a crucial role in attracting tourists to Europe, with 40% of international travelers citing luxury as a key reason for their visit. High-spending tourists contribute up to 25% of the value generated by European tourism.

One of the primary objectives of the report is to raise awareness for the need for swift and effective policy support to protect this vital cultural and economic asset.

Recommendations for Strengthened Support

The ECCIA urges the European Union to take action by reinforcing intellectual property rights (IPR) to combat counterfeiting. It also calls for stronger measures to protect brand image and investments, specifically through enhanced legislation on selective distribution networks, as well as more support for free trade agreements, VAT-free shopping for non-EU visitors, and easier procedures for acquiring EU visas.

Founded in 2010, the ECCIA represents seven major European cultural and creative industry organizations: Altagamma (Italy), Circulo Fortuny (Spain), Comité Colbert (France), Gustaf III Kommitté (Sweden), Laurel (Portugal), Meisterkreis (Germany), and Walpole (UK). Together, they represent over 750 cultural institutions and brands.

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