European luxury tourist headwinds diverge in 1H26E, with the key variables being Chinese customer exposure, regional price gaps, and offset from U.S. tourists
AI summary card
European luxury tourist headwinds diverge in 1H26E, with the key variables being Chinese customer exposure, regional price gaps, and offset from U.S. tourists
Bernstein notes that Richemont benefits from lower exposure to Chinese consumers, a smaller China-France price gap, and U.S. jewelry demand, while Moncler is more vulnerable due to its higher mix of Chinese customers, wider price gaps, and weaker momentum in the Americas.
- Luxury companies are showing divergent performance in Europe and EMEA in 1H26E: Richemont and Zegna are relatively resilient, while Moncler is dragged by weaker Asian tourist flows.
- The report proposes a three-factor framework: lower exposure to Chinese consumers is better; a smaller China-France price gap is better; and stronger offset from U.S. tourist spending is better.
- Cartier and Van Cleef & Arpels under Richemont are estimated to have around 20-25% exposure to Chinese consumers, below the roughly 30-40% for soft luxury brands, and hard luxury’s global pricing results in smaller regional price gaps.
- Moncler’s main brand is estimated to have around 35-40% revenue exposure to Chinese consumers, with French prices about 30% below China, wider than the roughly 20% average gap for soft luxury, creating greater price-elasticity pressure when European tourist traffic weakens.
- Hermes has around 40% exposure to Chinese consumers, and tourist revenue in France can be as high as 50%, but 2Q26E may see some support from a slight improvement in tourist trends and demand momentum in the Americas.
Report interpretation
Overview
This report discusses headwinds facing the global luxury goods sector in Europe and EMEA from tourist spending in 1H26E. Bernstein believes that intercontinental travel disruption caused by the Middle East war has amplified the effect of weaker Asian tourist flows, but the degree of impact differs materially across brands. The key differences come from three variables: a brand’s revenue exposure to Chinese consumers, regional price gaps such as between China and France, and the ability of U.S. tourist spending in Europe to offset weakness.
Core views
The report’s core view is that Moncler’s weak 2Q26A performance in Europe should not be simply extrapolated to all luxury companies. Moncler sits at the more disadvantaged end, with relatively high exposure to Chinese consumers, large discounts in France relative to China, and weaker brand momentum in the Americas, making it harder to offset missing Asian tourists with U.S. tourist spending. Richemont sits at the more favorable end: Cartier and Van Cleef & Arpels have lower exposure to Chinese consumers, global pricing in hard luxury reduces regional arbitrage pressure, and strong U.S. jewelry demand could support spending by American tourists in Europe. Tourist headwinds for soft luxury brands as a whole may be milder than for Moncler, especially for companies such as Kering and LVMH with lower exposure to Chinese overseas shopping. Although Hermes has relatively high exposure to Chinese customers and wider price gaps, it may receive sequential support in 2Q26E from improved spending by U.S. tourists.
Analysis framework
The report uses a cross-sectional comparison framework, breaking luxury-brand performance in European tourist spending into three components: customer mix, regional price gaps, and spillover from demand in the Americas, while also incorporating company commentary on 1H26E or 2Q26A results, changes in tourist flows, and regional brand momentum to derive investment implications.
Methodology notes
Chinese consumer exposure, regional price gaps, offset from U.S. tourists
By comparing different luxury brands’ revenue dependence on Chinese consumers, the price gap between China and France, and whether U.S. demand can spill over into European tourist spending, the framework assesses each brand’s sensitivity to tourist headwinds in Europe.
France vs China price gap
The lower French prices are relative to China, the more consumers tend to buy while traveling in Europe; when Asian tourist flows to Europe weaken, brands with larger price gaps are more vulnerable to demand shifting back to domestic markets and to price elasticity pressure.
Moncler read-across
The report reminds investors that when using Moncler’s 2Q26A performance to infer results for other luxury companies that have not yet reported, they need to consider differences in brand positioning and customer mix.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- RichemontRelatively benefited or more defensive
- Strengths
- Cartier and Van Cleef & Arpels are estimated to have relatively low exposure to Chinese consumers, global pricing in hard luxury results in smaller regional price gaps, and strong U.S. jewelry demand could support European consumption.
- Weaknesses
- Still exposed to global luxury tourist flows and volatility in European spending.
- Comparison
- In a more favorable position relative to Moncler.
- Risks
- If U.S. tourist demand cannot be sustained, or if Asian tourist flows weaken further, European performance could still come under pressure.
- MonclerRelatively under pressure
- Strengths
- Successful Spring/Summer products provide some support.
- Weaknesses
- Exposure to Chinese consumers is about 35-40%, the France-versus-China price gap is large at around 30% lower, brand awareness in the Americas is still being built, and seasonality adds additional drag.
- Comparison
- More sensitive than Richemont and some soft luxury brands to declining spending in Europe by Asian tourists.
- Risks
- Weak tourist flows may prompt consumers to shift to buying domestically on a 'buy now, wear now' basis, further amplifying price-elasticity pressure in Europe.
- HermesUnder short-term pressure but may improve sequentially
- Strengths
- Strong brand power, and 2Q26E may benefit from a slight improvement in tourist trends and demand momentum in the Americas.
- Weaknesses
- Exposure to Chinese consumers is about 40%, regional price gaps are wide, and tourist revenue in France can be as high as 50%.
- Comparison
- Like Moncler, it has high exposure to Chinese customers and price gaps, but it may have the offset from improving U.S. tourist spending that Moncler lacks.
- Risks
- If travel from Asia to Europe remains weak or the improvement in U.S. tourists falls short of expectations, sales in France and Europe will remain under pressure.
- BurberryA mixed read in a diverging environment
- Strengths
- The report notes strong demand in Europe from U.S. tourists.
- Weaknesses
- Weak Asian tourist traffic offset the contribution from U.S. tourists.
- Comparison
- Sits in the middle of the divergence in tourist-flow effects.
- Risks
- If Asian tourist weakness persists, it may continue to pressure European performance.
- ZegnaRelatively resilient
- Strengths
- 2Q26A performance in Europe and EMEA was relatively strong, and the company emphasized solid performance from international tourists.
- Weaknesses
- The report does not provide more detailed quantitative breakdowns of price gaps and customer mix.
- Comparison
- Like Richemont, its disclosed results were stronger than Moncler’s.
- Risks
- If intercontinental travel disruption expands, the contribution from international tourists could decline.
- KeringTourist headwinds may be milder within soft luxury
- Strengths
- The report cites it as an example of lower exposure to Chinese overseas shopping and potentially milder headwinds than Moncler.
- Weaknesses
- Still affected by soft luxury sector demand and European tourist spending.
- Comparison
- Lower risk than Moncler’s high price-gap and high tourist-dependence profile.
- Risks
- If demand from Chinese and Asian consumers deteriorates, European sales could still be affected.
- LVMH Moet Hennessy Louis Vuitton SETourist headwinds may be milder within soft luxury
- Strengths
- The report cites it as an example of lower exposure to Chinese overseas shopping and potentially milder headwinds than Moncler.
- Weaknesses
- Its business mix is broad and remains exposed to the global luxury consumption cycle.
- Comparison
- Tourist headwind transmission may be weaker relative to Moncler.
- Risks
- If spillover from U.S. demand is insufficient or Asian travel recovery is slow, related revenue in Europe could still be affected.
Key data
- Cartier and Van Cleef & Arpels exposure to Chinese consumers约20-25%Below the estimated roughly 30-40% exposure to Chinese consumers for soft luxury brands.
- Soft luxury brand exposure to Chinese consumers约30-40%Used in the report as an industry reference for comparison with Richemont’s hard luxury brands.
- Moncler main brand revenue exposure to Chinese consumers约35-40%Higher exposure to Chinese consumers makes it more reliant on spending in Europe by Chinese and Asian tourists.
- Moncler France vs China price gap约低30%The report says this is among the widest China-France price gaps, above the soft luxury average.
- Average France vs China price gap for soft luxury约低20%Used as the comparison benchmark for Moncler’s regional price-gap risk.
- Hermes exposure to Chinese consumers约40%The report considers Hermes to be another brand with relatively high exposure to Chinese customers.
- Hermes tourist revenue share in France最高可达50%The company used this figure to explain its performance in France in 1Q26A.
- Bernstein brand stock rating horizon12个月The disclosures section states that Bernstein’s stock ratings are based on relative performance over the next 12 months.
Impact & implications
The investment implication is that weakness in European tourist spending should be analyzed brand by brand rather than through a blanket downgrade for the industry. Moncler’s weakness reflects more of its own combination of high Chinese customer exposure, wide price gaps, and weaker Americas momentum; Richemont, some soft luxury brands, and Hermes, which may benefit from improving U.S. tourist support, have different risk exposures. Investors should focus on the degree of reliance on Chinese tourists, regional pricing strategies, and spillover from U.S. demand for companies that have not yet reported, rather than linearly extrapolating from Moncler alone.
Risks
- Intercontinental travel disruption caused by the Middle East war may continue to pressure spending in Europe by Asian tourists.
- Brands with high exposure to Chinese consumers are more sensitive to changes in tourist flows.
- Brands with larger China-France price gaps are more likely to face price-elasticity pressure when tourist numbers decline.
- If the improvement in spending by U.S. tourists cannot be sustained, it may weaken the offset against soft Asian tourist demand.
- Brands such as Moncler with weaker momentum in the Americas may be unable to gain sufficient support from U.S. tourist spending.
- Simply extrapolating from a single company’s earnings to the entire luxury industry may lead to misjudgment.
What to watch
- Subsequent earnings releases from luxury companies in Europe and EMEA for 2Q26E.
- Whether tourist flows from Asia, especially China, to Europe recover.
- Whether luxury spending by U.S. tourists in Europe continues to improve.
- Whether brand price gaps between China and France narrow or are adjusted through pricing strategy.
- Whether Moncler’s European performance continues to be dragged by seasonality and price-gap pressure.
- Whether Hermes’ sales in France show sequential improvement in 2Q26E.
- Whether Richemont’s jewelry brands continue to be supported by U.S. demand.