ILTM Cannes Opens With a Global Outlook of Slower Growth and Surging Affluent Spend
A data-packed opening night briefing laid out the economic and demographic forces that will shape luxury travel in 2026.
Photo: Josh Marty / Unsplash
ILTM Cannes opened on Monday night with a dose of economic reality from Dr. Simon Baptist, a principal economist at Visa, who laid out a 2026 outlook defined by slowing growth, shifting spending power, and rapidly changing travel flows. “We do expect a bit of a slowdown next year,” he said at the top of his presentation, adding that while major economies aren’t sliding into recession, “geopolitical tensions, supply chain changes, and high interest rates do have an impact.”
The United States is the lone standout, with Baptist noting that 2026 should benefit from a rebound after a sluggish early 2025 driven by tariff fears. But the real engine powering global growth isn’t traditional consumer activity—it’s the global AI hardware boom. “When we think about AI, we really have to differentiate between the hardware impact and the software impact,” he said. The hardware side (which includes chips, data centers, and storage) is lifting entire economies: Taiwan, where semiconductors make up roughly 13–15 % of GDP, according to the U.S. International Trade Commission, has forecast 2025 growth of 7.37% on surging global demand for AI hardware.
That divergence is clear in luxury spending trends. Visa’s global cardholder data shows mass-market growth at “close to zero” over the last five years, while the mass affluent posted 7% growth and high-net-worth cardholders surged 15%. “All of the growth in consumer spending in the last five years is coming from high net worth cards and mass affluent cards,” Baptist emphasized.
Several emerging markets are becoming newly influential as their affluent populations accelerate. India, the Philippines, and Indonesia are among the fastest-growing sources of $100,000+ households, all of which are critical for long-term luxury travel demand. But Baptist warned that political instability is a risk in markets where inequality is widening: “There have been a lot of protests by frustrated middle classes… who are seeing the affluent doing well and not seeing their own wages rise,” he cautioned.
Luxury spending patterns across destinations tell their own story. Paris has been gaining momentum, London and New York remain flat, and Dubai and Singapore have softened. Seasonality remains predictable—year-end spikes everywhere—but Dubai has developed a notable early-summer pop linked to pre-vacation shopping.
A deeper look at the top of the market shows distinct segmentation. In Switzerland, the UAE, and Hong Kong, the top 1% overwhelmingly dominate luxury spending. In the U.S., U.K., and Australia, the mass affluent matter more. Generational behavior sharpens the picture: Boomers “account for 40 percent of affluent spend,” despite representing just 12% of affluent households. Gen Z, still a small demographic slice, is already spending above its weight.
Travel flows have shifted dramatically since 2019. Inbound travel to the Middle East and Japan has surged—Japan helped by a yen now 40% down on its peak. But outbound travel from China and Japan remains muted. Chinese households, which once powered global tourism revenue, are now favoring domestic travel, a shift Baptist called “a big change to the global traveling landscape.”
Affluent travelers are increasingly choosing Lucerne, Hokkaido, Geneva, Kyoto, Majorca, and Madrid, while long-standing favorites like Florence and Osaka are losing share. Less traditional luxury destinations—Ho Chi Minh City, Mumbai, Manila, and Bogotá—are gaining ground.
Spending composition highlights an ongoing pivot toward experiences. Chinese travelers now spend more on culture and recreation than on luxury retail, while Australians and Indonesians direct a larger share of their international spend toward hotels. New Zealanders and Indians remain the most retail-forward outbound markets.
Baptist closed with a reminder that the future of luxury travel hinges on designing something that feels singular. “People want to travel for a reason,” he said. “It’s not good enough to have a strong, generally good tourism offering. You’ve got to have something that is social media friendly and creates a moment.” His example—a viral chocolate release in Dubai that briefly rewired Deliveroo’s spending curve—underscored the point: scarcity, novelty, and cultural resonance now move markets.
