The Gulf countries, which were a major market for luxury brands, are now affected by geopolitical tensions. Travel restrictions and a decline in Ramadan sales have put this tourism-dependent market in crisis.
There was a time when the economy of China and Europe was sluggish, then the Gulf countries were the ray of hope for the world’s biggest luxury brands. But now the increasing tension between America, Israel and Iran has put this global fashion and luxury market in trouble. Due to closure of the airport and issuance of strict travel advisory, the arrival of tourists has reduced. However, Dubai Mall, which houses big brands like Gucci, Alaïa and Zegna, is still open. Chalhoub Group, a large retailer that runs more than 950 luxury stores in the Gulf, has made it clear that their first priority at the moment is the safety of their employees. FashionSights founder Achim Berg explains that before the war started, the Middle East was one of the few regions in the world where the luxury market was growing rapidly.
trust gulf countries
According to Citigroup data, 5 to 6 percent of the global luxury market comes from the Middle East. This figure may sound small, but it means a lot for big brands. The famous company Richemont earns 9% from here, while for Swatch Group this figure is 10%. There is huge demand for luxury watches and gold jewelery in Gulf countries. Kering Group also earns 9% of its income from this area. When sales in China, Japan and Europe had slowed down, the Gulf market was gaining momentum. It is estimated that one-third of the luxury sales here come from tourists.
Impact on Ramzan sales
Generally, there is a lot of shopping in Gulf countries during the month of Ramzan. Just like shopping happens on Diwali in India, similarly it happens there on the occasion of Eid. According to a 2025 report by Visa, clothing sales increase by 2.6 times in the 10 days before Eid. But war has spoiled the entire atmosphere of this festive season. America and the European Union have issued warnings to their citizens against traveling to Gulf countries, due to which the tourism sector has almost come to a standstill. UAE and Bahrain are taking steps to bring back their citizens safely. The UAE has also announced that tourists who are stuck in the country due to flight cancellations will not be charged overstay fines until they are able to leave the country.