Let the post-covid luxury spending boom begin!

High end cabins on a cruise to the Bahamas are going for $20K. I know that the ads used to tell us that "it's better in the Bahamas," but what could make a cruise that expensive?

Oh, lots of things, I suppose. 

Not sure what's on that pricey Bahamas sail, but luxury cruises offer lots of goodies. Like a private steward to cater to your (nearly) every whim. Nespresso machines at the ready. Binoculars from Swarovski, that disappointingly are not bedazzled with Swarovski crystals. Your own Jacuzzi. Personalized stationery. And suites bigger than my condo.

Of course, if I were going to set sail on a cruise - which I most decidedly am not - my preference would be high end.

The only thing stopping me is a) personal disinclination to cruise; and, oh yeah, b) the money.

But sploshy cruises are making a post-pandemic comeback, as are most good and services in the luxury sector. 

The urge to get traveling is, of course, understandable, given that folks have been cooped up for a year and a half now. Plus those with means have more means than ever to spend on discretionary items. 

Thanks to stock market gains, stimulus and a pandemic recession that largely bypassed white-collar jobs, Americans were able to save an estimated $2.5 trillion more than usual since the pandemic began, according to the Federal Reserve Bank of New York. Additionally, the wealthiest 10 percent of Americans added more than $8 trillion to their net worth, according to the Federal Reserve, as stocks and home values soared in 2020. (Source: WaPo)

All that savings has been burning a hole in an awful lot of pockets. And now it's getting spent, providing a boost to the overall economy. (The U.S. economy is largely - 70% largely - driven by consumer spending.)

The good news is that this spending actually does come with some trickle down economics. Those private stewards, popping those champagne corks and fluffing your pillows on those luxury cruises, need to get paid. But it also means that as more and more spending comes out of the upper echelons - that spending has always, of course, been disproportionate; it's just that it's becoming even more so -  companies will be bringing more and more high-end options to market. 

Lafayette 148 New York, a high-end women's clothing retailer, "is doubling down on luxury." The pandemic has:

“...made us aspire to be more luxury, less mass-market,” [CEO Deirdre] Quinn told The Post. “I actually have moved the brand more into luxury because I think that’s what my customer is looking for.”

Even middling (upper middling?) retailers like J. Crew and Uniqlo - which I think of as pretty solid middle class outfits - are moving up the luxury chain. 

Travel's moving up-market as well:

On an earnings call this year, Lindblad Expeditions founder Sven Lindblad laid out an agenda to turn the luxury cruise line — 35-day Antarctic cruises start at about $50,000 — into a “diverse high-end travel aggregate.”

What's the the hollowed out middle to do once J. Crew starts pricing us out, and Linblad turns itself into a "'diverse high-end travel aggregate'"? What's in it for our peeps? Do we have to content ourselves with pressing our noses up to the glowing shop window like the poor little match girl? Or hold our noses and start shopping at the Dollar Store? Do we have to get by with a splash in the Charles River on a Duck Boat, or just stay the f' home? 

Anyway, high-income consumer spending started to bounce back in March, just in time for the first anniversary of the pandemic setting in. It's now up over and above pre-pandemic spending levels by 11 percent. 

No surprise that travel and entertainment are accounting for a lot of that spending. 

But high-enders also spend more on education - the top 20 percent accounts for 54 percent of spending on private college, private schools, and tutoring services. They're also bigly spenders on eldercare, pets, and toys. 

Oh, thanks to the stimulus and  unemployment subsidies, folks on the lower end are spending. It's just that their money goes to basics like groceries, rent, and transportation. 

But the cycle of economic recovery is not driven by necessities. It is driven by discretionary spending. And increasingly, that means luxury goods.

Even Amazon is trying to get in on the luxury spending boom, with their Luxury Stores. 

Don't know about you, but this doesn't come up automatically for me when I get on Amazon. I do see Amazon Basics, however.

Still, if it's good for the economy, all this luxury spending is good for the economy. (Sorry, forgot to issue a tautology alert!) But is it good for the soul? Asking for a friend...