Luxury spending may come back with a bang in 2025.

After 10 quarters of declining spending on luxury goods, signs are pointing toward growth this year, according to a new report from the Bank of America Institute. That trend is being helped along by increased spending abroad, as well as spending on luxury services such as high-end hotels.

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In 2024, luxury companies lost a combined $52 billion of market value, according to Bank of America Global Research. Shoppers in the United States contributed to that downward spiral, with high-end fashion spending per household falling 12 percent year over year in 2023 and 9 percent year over year in 2024. However, that decline started to ease in the second half of 2024, which could portend more favorable winds for the luxury sector this year.

In particular, U.S. consumers have started to carry out more of their luxury shopping abroad, with 13 percent of such spending happening outside the States, a jump from average levels in both 2019 and 2023. Much of that growth is thanks to high-income households, with the top 5 percent increasing their luxury spending abroad by 10.5 percent year over year. That’s almost five times more than the larger high-income group that Bank of America looked at.

And while most luxury purchases fall into the category of retail, high-end services are helping to boost overall spending, too. This past summer, for example, luxury travel offerings like high-end hotels outperformed more standard accommodations, and even did better than retail purchases across all generations, especially for Baby Boomers.

When it comes to the breakdown by age, Gen X made up the largest share of luxury purchases in 2024, with older millennials and baby boomers coming in next on the list. Older generations also saw stronger year-on-year growth when compared with younger cohorts, with only baby boomers seeing positive year-on-year growth in 2024.

All of these trends have led the Bank of America Institute to believe that luxury spending may be back on track this year. That should be welcome news to an industry that has struggled mightily over the past couple of years, with many of the biggest luxury brands posting poor financial results and outlooks in recent quarters. This year, though, thanks to U.S. consumers’ strong spending—especially when it comes to travel—that could all be reversing course soon enough.