International Shoppers Choose European Cities Over London Due to Tax-Free Shopping Withdrawal

  • Tourist numbers recover in London, but spending lags behind pre-pandemic levels
  • Tax-free shopping withdrawn for non-EU visitors since December 2020
  • US flight bookings up 17% but spending down by 1%
  • GCC travel to London up 7%, but spending decreased by 17%
  • European cities benefit from increased spending
  • 77% of international visitors would spend more with tax-free shopping reinstated
  • Reintroducing tax-free shopping could boost UK economy by £350m

New West End Company research reveals that despite a recovery in tourist numbers visiting London, spending has not followed suit. The withdrawal of tax-free shopping for non-EU visitors since December 2020 is causing a widening gap between visitor numbers and spending. US flight bookings to London increased by 17% in Q2 2023 compared to 2019, but spending fell by 1%. Similarly, travel from GCC countries rose by 7%, yet spending dropped by 17%. European cities are benefiting as visitors spend more there. Dee Corsi, CEO of New West End Company, urges the government to reconsider the tax-free shopping scheme, stating it would boost the UK economy by at least £350m.

Factuality Level: 8
Factuality Justification: The article provides accurate information about the decrease in spending by international tourists in London compared to pre-pandemic levels due to the tourist tax, cites specific data from New West End Company research, and includes quotes from Dee Corsi, the CEO of the company. It also mentions a separate survey showing that visitors would spend more if VAT was reintroduced. However, it does include some opinionated statements about the potential benefits of reinstating tax-free shopping.
Noise Level: 3
Noise Justification: The article provides relevant information about the impact of the tourist tax on spending in London compared to other European cities, but it could benefit from more analysis or context on the broader economic implications and potential solutions beyond just reinstating the tax-free shopping scheme.
Financial Relevance: Yes
Financial Markets Impacted: UK retail, tourism industry
Financial Rating Justification: The article discusses the impact of Britain’s tourist tax on spending by international visitors in the UK, particularly in the retail and leisure sectors. This has implications for businesses in these industries and could potentially affect the overall economy.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: The article discusses the impact of a tourist tax on spending in London, but it does not mention an extreme event. The situation is described as a ‘worsening trend’ and could potentially have minor economic consequences for certain businesses, but it doesn’t meet the criteria for any of the other extreme event categories.

Reported publicly: www.retailsector.co.uk