London - The devaluation of the pound following the Brexit vote last year may have shaken many, but it did have one positive effect - an influx in tourists and visitor spend. The latest data from tax free shopping service Global Blue, indicates tourist spend soared 14 percent in 2016 in comparison 2015.
Retailers across the country continue to reap the benefits of increased foreign spend, which is projected to continue into 2017. During the last month of 2016 tourist spend grew 23 percent year on year, as shoppers from Asia and North America in particular flocked to the UK to take advantage of favourable exchange rates and splurge on British luxury goods.
International visitors flock to the UK following the drop in the pound
Chinese consumers, who continue to account for the biggest group of international tourist spend in the UK, spent 46 percent more in December 2016 compared to the same period a year ago, whereas Americans, the second biggest spending nation, increase their spend by 77 percent in the same period. However visitors from Taiwan, who may only account for 1 percent of total international tax free spend in the UK, spent 177 percent more last month than in December 2015.
The stellar demand from overseas tourists during the festive season undoubtedly help luxury retailers such as Burberry achieved better than expected quarterly sales. The luxury fashion house revealed a 40 percent increase in its comparable UK sales in the three months to the end of December, an "exceptional performance" according to the company. "We know that favourable exchange rates are attracting international customers to the UK and Britain’s luxury offering will continue to entice foreign shoppers and influence their travel decisions for 2017," commented Michael Ward, Executive Chairman, Walpole and Managing Director, Harrods.
On average, international shoppers' spend grew 11 percent during 2016, compared to 2015. Middle Eastern nations continued to spend the most per transaction on average, with Qatari shoppers spending 1,695 pounds on average per transaction, reports Global Blue. Visitors from Saudi Arabia recorded the second highest average of 1,049 pounds, followed by Thailand, spending 1,023 pounds per average transaction in 2016.
The weakening of the pound has effectively lowered the barriers for many overseas visitors who are keen to visit London and shop, but were previously unable to due to currency exchanges."The weakened pound has extended the opportunity to a wider group of travelers who have made the most of the favourable exchange rates allowing them to visit the UK and enjoy our abundance of British shopping and leisure activities at the heart of our culture," commented Gordon Clark, Global Blue Managing Director UK and Ireland.
"This exposure and accessibility has been invaluable and the Brexit vote was undoubtedly a key contributor to the industry’s 2016 growth, but whilst we welcome the immediate boost and exposure, we are yet to understand the decision’s long-term implications."In spite of this, Global Blue predicts the boost in tourist spend in the UK to continue booming over the year, as VisitBritain, the UK's official tourist firm predicts international visitor numbers to increase 4 percent to 38.1 million.
"These figures align with our 2017 forecast of further growth for retail tourism; driven by the UK’s increased exposure in 2016 and the continued devaluation of the pound, until the implications of Brexit are made clear," added Clark.
Photo 1: By aurélien. [CC BY-SA 2.0 ( http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
Photo 2: By Diliff (Own work) [CC BY-SA 3.0 ( http://creativecommons.org/licenses/by-sa/3.0) or GFDL ( http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons