2024 is the Year of the Dragon, but it may not be so lucky for luxury brands. Even though Chinese consumers can now travel to Europe individually or in groups, investors shouldn’t expect them to rush over to stock up on Cartier watches and Hermes handbags. The long-vaunted revival in Chinese travel to the continent may not materialize until late 2024 or 2025.

Before the outbreak of Covid-19 in 2020, some 170 million Chinese shoppers took leisure trips abroad, with France and Italy popular destinations beyond Asia. Consequently, more than half of their luxury spending took place outside of their home market, according to Oliver Wyman.

Many still aspire to travel. LookLook, an insights company, recently conducted in-depth research with its “LuxuryVerse,” a panel of 100 high-spending Chinese women between the ages of 24 and 42. It’s no surprise that after the lockdowns, what they seem to value most is freedom.

In early 2023, nearly half of LookLook’s community prioritized a new handbag. Now, this figure is less than one in five. In contrast, about one in three are eager to invest in travel. Europe is their top destination, while many are nervous about traveling to the US.

Yet even these affluent women must overcome significant hurdles to embark on their dream trips. Visa issues are cited as a constraint by about one-third of LookLook’s panel. Chinese tourist spending in Europe and flight capacity ticked up in November, according to tax-free shopping specialists Global Blue, but both remain well below 2019 levels.

On top of that, spiraling costs of hotels in Europe have made vacations even more of an outlay. The cost for a Chinese couple to take a week’s trip to Milan, including the purchase of one luxury handbag, is around RMB 53,000 ($7,456.18) — almost double the RMB 30,000 it was in 2019, according to analysts at Jefferies.

If the financially cushioned are cooling on international trips, then the emerging wealthy will be suffering even more. This means that Chinese group tours to Europe may not recover anytime soon. Oliver Wyman surveyed more than 7,000 middle-class Chinese in September and found that their willingness to travel internationally had waned. As the post-reopening recovery sputters and economic uncertainty increases, they are opting to save rather than splurge on an overseas vacation.

Plus, why travel abroad when there are appealing options at home?

VIP customers are now benefiting from superior service in China, for instance. Many western companies have introduced WeChat programs that enable them to communicate with and serve top clients. Some brands have narrowed the price differential between China and elsewhere, too, while the weak renminbi means fewer bargains abroad. Fashion houses are also offering a much wider array of goods in the country and showcasing them to VIPs through exclusive events. And over the past few years, shoppers have gotten used to buying luxury goods whenever they want, rather than waiting for an international trip to splash out.

Meanwhile, the big brands have also been investing in their stores in Chinese cities so that the retail experience is second to none. Luxury shopping has exploded not only in Shanghai and Beijing, but also in cities such as Chengdu. Pharrell Williams, creative director of Louis Vuitton menswear, recently toured stores in these three locations. Hainan is also growing fast. DFS Group, LVMH’s travel retail arm, said in October that it would build a major shopping and entertainment complex on the tax-free island in a bid to capture the growing tourism to the region.

Domestic spending will take off even more if Hainan becomes fully duty-free in 2025 as planned. It could double its share of the domestic luxury market, from an estimated 9% today, dominated by beauty, to 18% in 2028, according to Oliver Wyman. The flip side of this is that Chinese luxury spending abroad may not recover to more than 20%-25% of their total outlay over the medium- to long-term, according to the professional services firm.

On top of the expense of long-haul travel, safety fears may also lead Chinese consumers to continue opting for destinations closer to home. Wars in Ukraine and the Middle East, as well as the recent attack on tourists in Paris, may make them think twice about traveling to Europe.

Luxury groups including LVMH and Richemont have noted that tourism to Hong Kong and Macau has picked up. LVMH recently held its first ever fashion show in Hong Kong, in partnership with the billionaire Cheng family. Unveiling Williams’ pre-fall menswear collection underlines efforts to revive Hong Kong as a tourism and shopping hub.

Japan is also proving popular, thanks to the weak yen, its status as an influencer of trends, and the fact that luxury brands have been investing in stores there. It’s a similar picture in South Korea, which alongside Singapore and Thailand could also benefit from more Chinese visitors. Consequently, analysts at HSBC expect luxury sales in Japan and Asia more broadly to expand the most next year.

Given the outlook for Chinese leisure travel to Europe, the big luxury brands must ensure their stores and service in China remain top-notch. At the same time, they must also prepare for the eventual resumption of some Chinese tourism to Europe.

Most of the consumers who do make the journey are likely to be the super-wealthy. Brands must ensure they are treated as well as, or better than, they would be at home. They should make sure VIPs don’t queue and that they receive the most attention from Mandarin-speaking sales associates in private lounges. Special local experiences will be imperative. Communicating with VIPs via WeChat and stocking enough of the most in-demand handbags, watches and jewels, as well as shoes and apparel in appropriate sizes, will also be crucial.

Chinese tastes are evolving quickly, as LookLook found, with high-spending young women moving rapidly away from flashiness and logo-heavy designs to versatility and quiet luxury. Miscalculate, and valuable sales will be lost.

With six months to a year at least until Europe sees any large-scale Chinese tourism, companies have time to perfect their offerings. That should give the luxury houses the best chance of making Dragon-year spending roar.