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UAE’s luxury retail shifts to experiences as brands chase wealthy travellers, residents
Report highlights Dubai’s rise as a global luxury hub, with retail growth increasingly driven by hospitality, tourism and high-net-worth inflows
- PUBLISHED: Wed 24 Jun 2026, 8:00 AM
Luxury retail growth in the UAE is being reshaped by a structural pivot toward experiences, as global brands prioritise markets such as Dubai where tourism, wealth inflows and high-end real estate converge.
According to Savills’ Global Luxury Retail Outlook, traditional store expansion is slowing worldwide, with new luxury openings falling to their lowest level since 2020 as brands adopt “more disciplined, portfolio-led strategies”. But even as expansion moderates, the Middle East — led by the UAE — continues to attract strong interest from luxury players.
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The report notes that “destination and resort markets are rising, but selectively”, driven by luxury travel and hotel development, trends that are increasingly visible in Dubai’s retail ecosystem. This has shifted the growth model away from simply adding stores toward integrating retail with hospitality, branded residences and lifestyle-led destinations — an approach highlighted in the email accompanying the report.
Dubai’s appeal is underpinned by its dual role as both a global tourism hub and a magnet for high-net-worth individuals (HNWIs). The report emphasises that global mobility of wealth is accelerating, with affluent individuals seeking locations offering “the right blend of lifestyle, work opportunities and long-term wealth protection”. This has reinforced the Emirate’s position as a preferred base, supporting demand for luxury retail and related experiences.
At the same time, a broader shift in consumer behaviour is redefining how luxury spending is allocated. Despite a marginal contraction in global personal luxury goods sales in 2025, spending on experiences such as travel, hospitality and fine dining has continued to grow. The report notes that luxury experiences expanded by 3 per cent to €260 billion, even as goods demand softened.
“A structural shift towards experience-led spending is reshaping the luxury market,” the report states, adding that HNWIs “increasingly prioritise travel, hospitality and dining” as part of their consumption patterns. This trend is particularly relevant to the UAE, where hospitality-led developments are central to the retail landscape.
Dubai is also benefitting from a growing pipeline of luxury hotel development across the region, which is expected to “enhance long-term luxury credentials” and reinforce its ability to capture high-value tourism and retail spend. Riyadh, meanwhile, is forecast to see the strongest growth in luxury hotel supply, indicating intensifying regional competition.
Thea Rowe, Associate Director, Middle East & Cross Border Retail at Savills Middle East, said: “The luxury retail sector is becoming increasingly focused on quality over quantity. Brands are prioritising destinations that offer access to affluent consumers, strong tourism performance and a wider lifestyle proposition, rather than simply pursuing expansion for the sake of it. Over the years, Middle Eastern cities such as Dubai and Riyadh have evolved into global lifestyle destinations, where luxury retail is supported by world-class hospitality, branded residences, cultural attractions and a growing presence of high-net-worth individuals. This creates an environment where brands can engage consumers across multiple touchpoints and build a stronger long-term presence.”
However, access to prime retail space is emerging as a key constraint globally. The report highlights that “availability… is the defining real estate challenge of 2026,” with demand for best-in-class locations outpacing supply. This dynamic is driving brands to focus on upsizing, relocations and experiential formats rather than aggressive network expansion.
Associate Editor Somshankar Bandyopadhyay brings more than three decades of experience to the KT newsroom. Currently, he manages the news production of the business section, ensuring that the top economic and business news of the day reaches its readers.