2025 Forecast: Elie Khouri, Founder, Vivium Highlighting the key trends likely to shape industries and society in the coming year.

As we step into 2025, several significant trends are poised to shape various industries and sectors. While I can't predict the future with certainty, I've identified key developments that are likely to gain momentum in the coming year, particularly in the realms of real estate, entrepreneurship, hospitality, design, art, and investing. It's important to note that these observations deliberately exclude any political views or predictions. Additionally, I've chosen to omit discussions about artificial intelligence, as its pervasive influence across industries deserves a separate, more focused analysis. Instead, I'll concentrate on other emerging trends that are reshaping our world in meaningful ways.

Plenty of cash for regional startups
The MENA venture capital market is set to exceed USD$1.6 billion in 2025, creating unprecedented opportunities for startups and propelled by massive government investments, especially in the UAE and Saudi Arabia. Key sectors to watch include proptech, fintech 2.0 (lending, financing, BNPL schemes, digital banks), and deep tech-driven businesses. Founders should be patient, as exits can be slow, and should focus on building a strong team to attract funding. Investors should consider fund investing over single company investments and limit VC or startup investments to 10% of their total portfolio. This is driven by the sector's illiquidity and 7+ year investment horizon.

The rise of young entrepreneurs
The entrepreneurial landscape is experiencing a significant shift as young employees, disillusioned by eroding corporate cultures and reduced investment in talent, are increasingly turning to entrepreneurship. This trend is fueled by increased access to crowdfunding platforms, growing appetite from venture capitalists for early-stage investments, remote work challenges in traditional corporate settings, and cost pressures leading to reduced investment in talent development. As a result, we can expect to see a surge in innovative startups and fresh business ideas driven by this new generation of entrepreneurs.

Winner of the GCC art scene
Many argue that the region lacks cultural depth, but this overlooks the incredible progress made in a relatively short time. The region is still young, yet it is rapidly emerging as a significant player in the global art world, with the UAE, Qatar, and Saudi Arabia leading the charge. Each country is taking a unique approach- Qatar has been a pioneer in building museums and hosting world-class exhibitions but is struggling to create local art engagement and art tourism. Saudi Arabia is organizing interesting biennales, but the long-term vision remains unclear due to multiple stakeholders. In the UAE, Sharjah's Biennale has achieved global recognition, Dubai leads in art trade with thriving gallery scenes but unfortunately is lacking serious art institutions, and Abu Dhabi stands out with its clear vision, commitment to art infrastructure, and support for Emirati artists. Abu Dhabi, in particular, is striking the right balance between actions, values, and intent, positioning itself as a cultural influencer in the region.

Global vs local art market
While the global market will further correct by 5% in 2025, the regional market will grow by +15% but will still represent a modest 0.2% of global. The market is undergoing significant changes, with a shift towards more diverse and inclusive representation. In 2025, we can expect a continued focus on emerging artists from underrepresented backgrounds, increased integration of digital art into traditional art spaces, growing importance of art fairs (especially Abu Dhabi) and online platforms in driving sales, and a stronger emphasis on sustainability and ethical practices in art production and trade. Regionally, the MENA art market is likely to see increased institutional support and private collector engagement.

Investing in global real estate
For those looking to diversify their portfolio with global real estate, consider allocating 10-15% of your total net worth to this sector. Major capitals like Paris, New York, and London offer long-term resilience but primarily for capital preservation. Greece, Spain, and Italy present attractive opportunities due to outpacing GDP growth compared to European peers, unmatched quality of life, and favorable tax policies (e.g., Greece's 0% inheritance and capital gains tax). For those unable to invest in physical assets, consider ETFs with exposure to these countries or proptech platforms offering fractional investing solutions.

The big question on UAE real estate
Strategies for investing in the UAE real estate market vary depending on investor profiles. For end users, my advice has always been to invest on a need basis, as timing the market is almost impossible and long-term gains are highly plausible with consistent growth of 5-7% expected over the next 5+ years. This is validated by the projected inflow of new residents to the emirates. Yield seekers will find existing assets (never buy off-plan) attractive for long-term capital appreciation, even with potential short-term fluctuations. Yields in the UAE offer 5-8% returns, outpacing the 3% global average. Flippers who seek to invest in properties for delivery post 2026 should exercise caution, as a market correction is anticipated within 18 months, and when this happens, panicky investors may rush to sell below initial purchase price! The correction will be much less severe though for luxury properties with price points beyond 5,000 AED per sq. foot.

Hospitality revamp
The hospitality sector is undergoing a transformation, with three major trends driving change. First, hotels are leveraging advanced analytics tools to tailor experiences to individual guest preferences, moving beyond simple greetings to more sophisticated personalization. Second, properties are increasingly offering health-centric amenities such as yoga studios, sleep-enhancing rooms, infrared saunas, and holistic meditation practices. These offerings aim to attract health-conscious travelers and enhance overall guest well-being. Third, hotels are incorporating branded F&B outlets as an intrinsic part of their facilities. This strategy serves to attract non-guest visitors, enhance the brand's lifestyle dimension, and improve overall revenues.

Better living
2025 will usher in a new approach to living spaces that seamlessly blend art, furniture, and collectible design. This trend reflects a desire for more engaging and story-rich living environments, the breaking down of traditional boundaries between art and design, an increased focus on curated, personalized spaces that reflect individual tastes and values, and the rise of multi-functional pieces that serve as both art and practical furnishings. This fusion of art and design will create homes that are not just living spaces, but immersive experiences that inspire and nurture creativity.

Luxury fashion market outlook for 2025
The luxury fashion market faces challenges in 2025 due to economic uncertainty, geopolitical risks, and potential Trump tariff hikes for European brands. Gen Z and millennials are shaping the landscape, demanding sustainable and ethical products. Brands are focusing on digital innovation, sustainability, and localized strategies to meet these preferences. The rise of the second-hand luxury market, projected to reach over $30 billion in sales by 2025, is influencing sector dynamics. Brands blending tradition with innovation and sustainability are likely to lead. On the corporate side, Kering is expected to continue facing challenges, while LVMH may pursue growth through more acquisitions and increase its stake in Richemont. Hermès, the "scarcity luxury" leader, is anticipated to thrive despite market fluctuations.

Hyper-personalization is the new luxury
The luxury market in 2025 will see hyper-personalization become a defining feature of premium experiences. Brands are leveraging advanced data analytics to create tailored interactions that go beyond simple product recommendations. This trend is driven by the growing expectation among consumers for personalized experiences, with over 75% of customers preferring companies that offer such customization. Luxury brands are adopting an advisory role, offering personalized recommendations based on individual preferences and behaviors. For example, Tiffany & Co. provides engraving services to add a personal touch to physical products. Similarly, Ferrari has successfully implemented a personalization program called "Tailor Made," which allows customers to customize nearly every aspect of their vehicle, from exterior colors to interior materials. This approach has significantly boosted Ferrari's profitability, with personalization contributing substantially to their revenue growth. This hyper-personalized approach is expected to enhance customer loyalty and drive sales growth in the luxury sector.