UK falling behind EU rivals on tourist spending after duty chances

Financial Times

Daniel Thomas

07.03.22

Britain is losing its position as the favoured destination for high spending international tourists to the EU after the government abolished tax-free shopping at the start of last year, according to a new study.

Global Blue, the tax-free shopping refund agency, compared the behaviour of Gulf state tourists in the EU in 2019 with their shopping habits last year. It found that about a fifth of those shopping in the bloc in 2021 had previously only shopped in the UK two years earlier, where they spent an annual average of €24,000 each.

Last year, their spending dropped to zero in the UK but reached €22,000 each in the EU. Close to a third of those shopping in the EU in 2021 had previously shopped in both continental Europe and the UK in 2019, but increased their average annual spending per person in the bloc by 40 per cent to €22,000 last year, the study found.

Paul Barnes, chief executive of the Association of International Retail (AIR), will use an appearance before MPs to reinforce the need to bring big spending tourists back to the UK.

“While domestic shoppers are returning strongly to the high street, we are seeing a noticeable absence of high spending international visitors that goes beyond the consequences of the pandemic,” he said ahead of the hearing by the House of Commons Digital, Culture, Media and Sport committee into promoting Britain abroad. “The Treasury must look again at its decision to abolish tax-free shopping,” he added.

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