China, Russia, US and Middle East boost UK tourist luxury spend

By

Sandra Halliday

Published
Mar 23, 2017

There may be concerns about UK retail as Brexit talks loom and shoppers are hit by higher inflation, but international tourist spend appears to be going from strength to strength.

While events such as this week’s terrorist attack on a key London tourist destination may dent visitor appetite in the future, for February, international tax-free shopping spend rose 55%, year-on-year.

Tax-free shopping facilitator and researcher Global blue said the stellar start to this year’s tourist spend is in stark contrast to performance a year ago when the spend rose only 3%.

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It believes improved economic and political environments in (traditionally) top shopper markets China and Russia over the past year have been responsible for visitors rediscovering the UK as a destination, helping boost visitor spend for the year-to-date.
 
Chinese New Year also contributed to the increase, and the weakened pound has of course had a huge impact. Global Blue said it has been “a drawcard for visitors from America in particular.”

Meanwhile “the optimism fuelling the growth of the UAE and Middle Eastern markets has continued to influence visitor spend from these shopper markets in the UK.”

The company also expects the upturn to continue for shoppers from China, the UAE and US, although the triggering of Article 50 next week that starts the process of Britain leaving the EU means “the long-term impact of Brexit on the retail tourism industry remains unknown". It is also unclear whether March 23’s terrorist attack would have any long-term impact on tourist decisions to travel to the UK for shopping trips.

But for now, the UK is riding high on that wave of shoppers from key countries. Global Blue said that following the devaluation of the Yuan, China’s economic position strengthened towards the second half of last year and Chinese spend rose 103% February. China maintains its position as holding the biggest share of the UK international tax free spend, and average spend per transaction, at £922, increased 24%.

 
Russia’s improved economic position has seen it re-emerge as a key shopper market in the UK. Following a volatile 2016, visitor spend in February increased 5% year on year seeing Russia re-established itself among the top 10 shopper markets in the UK.
 
Visitor spend from the US has seen consistent monthly increases since February 2016, maintaining its 4% share of the UK international tax free spend market as a top 10 UK shopper market. The US’s economic recovery since 2009, the strong Dollar and subsequent increased consumer spending has seen an influx of American travellers to the UK. US visitors are driven by the country’s leisure and cultural attractions and Global Blue anticipates their presence to grow, saying they are starting to match the Chinese for their growth patterns on luxury shopping.
 
Following China, Qatar, Kuwait, the UAE and Saudi Arabia made up the top five UK shopper markets for February. Global Blue said British luxury is the drawcard for these visitors, evident in their average spend. Qatari visitors spent an average of £1,736 per transaction in February, while visitors from the UAE spent an average of £1,505, those from Kuwait spent £699 and visitors from Saudi Arabia spent an average of £1,411. Global Blue believe the Middle East and UAE’s strengthening economies will see continued UK tourist spend from these markets.