The United States (U.S.) is the world’s favourite retail tourism destination, according to research previewed at last week’s “Virtuoso Travel Week” in Las Vegas. So-called “retail tourism”, an often under-analysed but extremely lucrative sector, encompasses people’s shopping habits when on holiday or travelling away from home.
1. Retail tourism thriving in U.S.
The latest set of trends and data have been put together by the World Travel and Tourism Council in collaboration with Hong Kong Polytechnic University and The Bicester Collection (a global platform of 11 shopping destinations). They show that the U.S. performed strongly from 2019 and throughout the challenges of Covid-19 in 2020, as “the largest contributor of retail tourism to GDP (US$34.7 billion).” That’s nearly 32 billion euros.
Retail tourism is a thriving market segment of the Travel & Tourism sector in the U.S.
Julia Simpson, WTTC President & CEO
What’s more, the U.S. maintained growth in 2021, contributing US$23.9 billion (22 billion euros) to the country’s economy through retail tourism.
2. Research to be revealed in Barcelona’s La Roca
The WTTC’s joint research findings are due to be published in full on 7September 2023 in Barcelona, at one of the Bicester Collection’s flagship outlet villages, La Roca.
That report will reveal that, in 2019, retail tourism was worth US$178.2 billion, (163.9 billion euros) equivalent to 6% of the Travel & Tourism sector. In some destinations it represented more than 15% of the sector.
Trailing that reveal, Simpson noted: “Our latest findings on the U.S. reinforce its allure as a shopping mecca, highlighting the vital role that retail tourism plays in the country’s Travel & Tourism sector.”
The report will offer a “comprehensive overview” of retail tourism from experts, academics, and practitioners, scrutinising customer and provider habits, emerging trends, and identifying obstacles and potential growth factors.
3. One of life’s great pleasures
“For millions around the world, shopping is one of life’s great pleasures,” Simpson added. “The pandemic impacted both travel and retail industries severely, but as the world reopens, this report shows how the retail experience can become a journey too.”
But who are these people looking for shopping experiences while they’re away? Lorena García Elices, Senior Analyst at ForwardKeys, explains they are: “[b]usiness travellers looking for gifts, frequent tourists or shoppers on a weekend trip: these are all potential consumers for retailers.”
ForwardKeys’ website gives an example of how to ensure shoppers have “a fun and memorable experience,” citing how one client went about “creating places with something for everyone to enjoy [. . .] a wide range of restaurants as well as a variety of activities that can be enjoyed by families and other target groups. It also stocks items from numerous luxury brands, often at a discounted price, to ensure no one leaves its stores unsatisfied.”
4. UK mistakes are Europe’s gain
As well as delighting certain vacationers and tripmakers, well-managed retail tourism can see government revenues soar. High-level strategy decisions can have far-reaching consequences.
One such example is Paris’s three-day VAT rebate window for purchases exceeding €100 in 2019. After this, there was a dramatic spike in Bicester Paris visits, which surpassed London as the UK’s own VAT refund scheme was phased out.
“Governments that incentivise this retail segment with tax-free shopping have seen tourism revenues boom,” the WTTC points out. “Countries like the UK that scrapped tax-free shopping have seen visitors move to other countries like France or Italy, depriving the UK economy of critical export revenues.”
