Britain missing out on millions from international visitors

Britain is missing out on millions from international visitors due to hated tourist tax, new figures reveal

• Data shows how holidaymakers are spending more on the Continent than Britain
• European shops enjoyed best month for international spending since pandemic
• READ MORE – DAILY MAIL COMMENT: Tourist tax makes us global laughing stock

Figutres today lay bare how British stores are missing out on millions of pounds from international visitors after the removal of tax-free shopping for overseas tourists.

As the campaign to scrap the hated tourist tax widens, data shows how holidaymakers are spending far more on the Continent than Britain.

European shops have enjoyed their best month for international spending since the end of the pandemic thanks to a surge in sales from Asian holidaymakers and high demand from US consumers.

Sales surged by 40 per cent month-on-month in March this year, taking them to just 21 per percent below March 2019 – the highest level in nearly three years, according to research by technology firm Planet.

It said the data highlighted the need for the UK to bring back tax-free shopping to help British retailers who are missing out.

As the campaign to scrap the hated tourist tax widens, data shows how holidaymakers are spending far more on the Continent than Britain

The research also showed that France remains the most popular tax-free shopping market for Chinese shoppers, capturing 54.9 per cent of all their sales across the Continent.

Chinese tourists spent an average of 1,537 euros each on tax-free products last month, the figures showed.

Meanwhile, a separate study found spending by American tourists in the West End has lagged far behind that in rival European cities this year so far, due to the tourist tax.

Over the first three months of 2023, visitors from the US spent only slightly more across Bond Street, Oxford Street and Regent Street than they did in 2019.

READ MORE: The hated tourist tax has left London on life support and Britain lagging behind European rivals, says M&S boss 

But in France and Spain, spending levels were more than three times higher than the pre-Covid comparative, according to data company Global Blue.

And spending was more than double 2019 levels in Italy and Germany.

The data is another sign that Paris, Madrid, Frankfurt and Milan are surging ahead of shopping destinations in the UK.

Spending by US tourists in the West End this year so far has been at only 104 per cent of 2019 levels, meaning it is only just in a better position than it was before the pandemic hit.

But in France spending was at 313 per cent of pre-Covid levels while in Spain it was 312 per cent for January to March.

And Italy was at 243 per cent of its pre-pandemic spend while Germany was at 227 per cent.

Dee Corsi, chief executive of the New West End Company, said there was ‘a danger’ that the shopping heartland could be held back in comparison to Europe on its Covid recovery.

She said: ‘There is no doubt shopping and tourism in London’s West End is climbing back to pre-pandemic levels.

‘But there is a danger if the Government does not level up the playing field, we will not realise our full potential on visitor spend against other European cities.’

Campaigners from across the retail, hospitality and tourism sectors want Britain to restore the VAT refund for overseas holidaymakers to attract their custom.

They fear that the removal of tax-free shopping for international visitors is driving tourists away from London to European cities.

This week The Daily Mail launched its ‘Scrap The Tourist Tax’ campaign in support of business chiefs demanding the Government look again at the policy. Some 110 leading figures have now signed the letter.

Senior cross-party politicians have also added their support to the campaign, including Conservative former prime minister Liz Truss and Labour London mayor Sadiq Khan.

Luca Cassina, president of retail at Planet, said its data ‘highlights the extent to which UK retailers are missing out on international spending – particularly from Asian, Middle Eastern, and US tourists – with the UK being the only major European market to not currently offer tax-free shopping’.

‘Chinese tourists are already returning to Europe, now only second to the US in terms of their Tax-Free spending, and our research shows that almost seven out of ten Chinese consumers would be more likely to visit the UK if a tax-free shopping scheme were available,’ he added.

‘We continue to encourage the UK Government to work in partnership with the industry and act quickly to reinstate a Tax-Free shopping scheme for overseas visitors.

‘This would provide a major boost to the UK’s retail sector ahead of the peak summer travel season, helping to put UK retailers back on a level playing field.’

Yesterday luxury goods business Halcyon Days warned that customers from the US and China are ‘just not shopping because they can get the advantage of going over to Europe and getting the products with the VAT removed’.

Its chief commercial officer Rob McFarland told BBC Radio 4’s Today programme: ‘They are making choices as to where they make their bigger purchases, and they are going over to Europe to make those purchases.’

And Douglas McWilliams, of the Centre for Economics and Business Research, estimated that the UK will lose one million tourists and £3billion of spending this year as a result of the tourist tax.

He told the Telegraph: ‘ Obviously, lots of things have been going on and this is only partial data.

‘But it does corroborate my analysis pre-Covid that there would be a very significant loss of tourism and tourist revenue if the VAT export rebate was abandoned.’

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