Spending on luxury clothing, accessories and other personal items is expected to hold steady at 249 billion euro (£222bn) this year, according to a study by Bain Consultancy for the Altagamma association of Italian high-end luxury producers.
Add in spending on luxury cars, yachts, jets, cruises, hotels, fine art, design and food, and the market tops a stunning one trillion euro (£894bn).
As political events and monetary policy exert greater influence on luxury spending patterns, brands have turned their focus to wooing buyers in their home countries rather than counting on tourist arrivals to buoy sales, said Bain partner Claudia D'Arpizio.
"This is not happening by default," Ms D'Arpizio.
"Brands are refocusing on the local customer base and working to develop products that are more affordable and more inclusive to meet their needs."
For the first time, spending by China's super consumers shrank, albeit slightly from 31% of the total to 30%.
Part of the shift was due to an increase in the number of middle-class Chinese travellers, who collectively spend less than higher rollers, she said.
While US presidential elections always put the freeze on consumer spending, Ms D'Arpizio said this year's squeeze was a little tighter due to a strong dollar, which also hurt tourist spending, and higher oil prices.
In Europe, brands are also working to cultivate local buyers as the threat of terrorism has hurt tourism.
They are seeing local consumption recover in Italy, Germany, Spain and Britain.
But spending remains soft in France, with terror attacks impacting both tourists' and locals' sentiment, Ms D'Arpizio said.
Britain's decision to exit the European Union has so far proven a boon for luxury spending, with the falling pound encouraging both domestic consumption and travellers to spend.
"Currently, London is the cheapest luxury market," Ms D'Arpizio said.