Discover the latest trends as Chinese tourists make a comeback to London post-travel restrictions, although their spending habits reveal a significant shift. The New West End Company, representing key establishments in London, notes a resurgence of Chinese visitors, yet their expenditures have drastically decreased due to the absence of tax-free shopping post-Brexit.
Despite a marginal 2% decline in Chinese visitor numbers in September compared to 2019, their spending plummeted by a substantial 58%. The overall gap between international visitor numbers and their expenditures in London, compared to 2019, has widened from 1 percentage point in Q1 to an impactful 31 percentage points in Q3.
Michael Ward, Managing Director of Harrods, highlights the disadvantage posed by the absence of tax-free shopping, extending its impact beyond the retail sector. A survey reveals that three-quarters of international visitors to the West End would spend more if they could reclaim the 20% VAT on their purchases. The previous ability for non-EU visitors to reclaim tax ended in January 2021, prompting increased calls for policy reconsideration.
The repercussions of the ‘tourist tax’ have led to parliamentary debates and a call for an independent review. In September, 350 business leaders, including those from British Airways, Marks & Spencer, Burberry, and Mulberry, penned an open letter, decrying the lack of VAT refunds as a ‘spectacular own goal.’
As part of a comprehensive campaign, the Centre for Economics and Business Research estimates the UK is losing £10.7 billion ($13 billion) in GDP and two million additional visitors annually due to the absence of VAT refunds.
Dee Corsi, CEO of the New West End Company, emphasizes that the lack of tax-free shopping is hindering growth and impacting consumer spending. While the UK faces cutbacks from tourists, continental Europe is reaping the benefits. Stay informed on the evolving landscape as the UK navigates these challenges in the global tourism market.
