As I write this, we are 19 months into the Covid Pandemic, which is now increasingly recognized as Endemic. The last year has been extremely disruptive for many people and companies, ours included. Travel, which we all took for granted, grounded to a halt. For a services firm like ours, the challenge was not being able to meet in person our clients and teams located across the world, in US, Europe and Asia. I remember when we used to spend more than half of the year on the road and hopping onto a flight was like jumping into a cab. Business travel will come back, but my guess is that we will question more if we really need to make the trip, we will travel less frequently but for longer durations than before.
With the help of technology, cloud computing and an array of digital tools, we managed to stay connected with clients and teams. We are now seeing renewed activity in many markets, buoyed by increased vaccination rates. We also pivoted the business, augmenting and launching our AFFLUENTIAL™ DATAVAULT™, which fully digitalizes our entire range of data and insights reports on a platform accessible by clients 24/7. Never waste a crisis: the Covid experience taught us to be fully accessible where and when our clients need us, investing heavily in developing our online and digital capabilities.
While monitoring global affluent and HNW consumers in the past 12 months through our annual TrendLens™ program, we have spotted some surprising trends. While the global economy was at a standstill, our data showed us that the wealthy were and are getting wealthier. Our yearly signature Millionaire study, which includes interviews with thousands of wealthy consumers, has been monitoring this trend which now gives this segment even greater purchasing power. Rising stock markets, property prices, lower cost of borrowing have all led to the wealthy enjoying significant economic gains which translate into greater discretionary spending.
The luxury sector, one of our key practice areas, was the first to get hit when Covid struck last year. Yet, it was the first to recover as many markets, led by China, began the recovery as early as August 2020. The spectacular recovery of the S&P Global Luxury Index, which provided returns of over 70% in the last 12 months, further validates the luxury sector’s rebounding strength.
Luxury in 2020 was very much a domestic story due to the lack of international travel. Travel budgets were diverted to local expenditures, driving up various luxury categories we often work with, such as wealth management, luxury auto, beauty, alcohol and spirits, watches and jewellery. Covid also accelerated digitalization and technology adoption for luxury brands at greater speed in the last 12 months than in the last 12 years.
We predict that China will continue to grow and become the most important luxury market this year. As the Chinese affluent consumers start travelling outbound again, neighbouring Asian and some European countries will be the first to benefit. All these drivers are necessary steps for the sector full recovery.
We remain optimistic on the return to the new normal, the resilience of Asian economies and the aspirations and ambitions of the Asian consumer leading the economic recovery. Seeing the solidarity and resilience of humanity faced with the biggest challenge of our lifetime during the Tokyo Olympics, one of my favourite cities and a frequent destination pre-covid, gives me renewed optimism that we will soon put covid behind us and welcome the Olympics in Paris in 2024 with full stadiums and a renewed sense of hope.