Louis Vuitton hotels, Gucci restaurants, Prada bakeries: luxury companies pivot to experiences

Despite Covid-19 upending the trend of experience-based luxury, companies might still be able to sell the strategy of tapping into luxury as a broader lifestyle

They could also expand their offering with a broader push into health and wellness, an area where spending was already booming before the pandemic

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Gucci’s Osteria restaurant in Florence, Italy is an example of big luxury houses expanding into selling luxury as a broader lifestyle.

Published: 12:15pm, 4 Sep 2020Updated: 4:59pm, 5 Sep 2020

Before the novel coronavirus hit, the world’s leading luxury goods houses were selling “experiences” where their jet-setting customers could indulge in opulent lodging and dining – and put it all on Instagram.

Between 2010 and 2019, the demand for experience-based luxury, including fine wines and gourmet food, outstripped that for personal goods such as watches and handbags. Now, with Covid-19 having upended the trend, few are crossing oceans to stay at a Bulgari hotel or dine at a Gucci restaurant.

However, companies from Giorgio Armani to Versace and LVMH might still be able to sell the strategy of tapping into luxury as a broader lifestyle. They could offer extravagant getaways to those happy to pay extra to dine, shop and relax in a safe and secluded environment, or (given people aren’t splurging on long-haul airfare) coax potential local customers out for exclusive hometown retreats.

They could also expand their offering with a broader push into health and wellness, an area where spending was already booming before the pandemic.

Experience-based luxury outpaced shopping for physical luxury items at stores like Louis Vuitton from 2010 to 2019. Photo: Bloomberg

The world’s biggest luxury group, LVMH, is probably the most advanced on this frontier. It acquired Belmond, the owner of Hotel Cipriani in Venice in Italy, to complement its exclusive Cheval Blanc hotel chain.