- In Europa, Spain and the United Kingdom boosted sales in 2016.
- Despite an increase in the number of visitors, sales to Chinese tourists declined with a reduction in the average amount spent.
- Among Latin American shoppers, Argentines are the fastest growing contingent, ranking third by nationality behind the Chinese and Russians.
- Morocco ranks fifth with continuous growth.
Círculo Fortuny commissioned a study entitled, “Shopping Tourism in Spain: 2016 tax-free sales advanced closing and 2017 forecasts” from its corporate partner, Global Blue, experts in the shopping and spending habits of international travellers.
The report highlights: THE EVOLUTION OF TAX-FREE SALES IN 2016 Among the major European countries, only Spain and the United Kingdom increased sales: 2% and 9%, respectively, albeit for different reasons. In the case of Spain, the uptick was driven by a greater influx of tourists, whereas in the UK it was the result of the pound’s depreciation, and would have otherwise been negative.
In Spain, the average amount spent per transaction declined 4%. By nationality, Chinese tourists continue to lead in purchases with 31%.
However, sales are down 7% due to the effect of the new taxation in their home country, where rates have skyrocketed from 10% to 60%, with the price differential between China and Europe being 40%. As a result, volume dipped 7% relative to last year, adversely affecting the Jewellery and Watches sector.
Argentina grew 62% relative to 2015, ranking third among nationalities, behind China and Russia. By category, Fashion and Accessories increased its share by 27%, while Jewellery and Watches slumped with a near-flat performance.
EFFECT OF MAJOR EVENTS in 2015: New Chinese legislation: A negative trend resulted from changes in taxation on purchases abroad, from average increases of over 40% to average decreases of 15%.
Brexit: The United Kingdom saw an average growth of 33% in tax-free sales between August and October due to the depreciation of the pound.
Exchange rates: In recent months, there has been an uptick in spending by Russian tourists in Spain, with increases of roughly 20%, in light of favourable trends in the Ruble/€ exchange rate.
2017 EVOLUTION FORECAST Higher oil prices and visitors from Russia, the Persian Gulf, and Mexico will contribute positively to sales related to shopping tourism. A weak euro will have a favourable effect on the purchases of all non-EU nationalities, as will improvements in flight connectivity and tourists from Asia and the US.
The Brexit appears to have had an adverse effect on eurozone countries due to the weakness of the pound sterling and, consequently, has boosted the appeal of shopping in the United Kingdom.
DIVA (new electronic VAT refund system for travellers) will help improve the perception of Spain as a shopping destination for tourists.