The World Travel and Tourism Council (WTTC) has researched retail tourism in the current global market, an area it describes as historically overlooked and limited in data.
The joint research collaboration is between the WTTC and the Hospitality and Tourism Research Centre of the Hong Kong Polytechnic University, in association with luxury shopping operator, The Bicester Collection.
According to the report, in 2019 retail tourism was worth US$178.2bn, equivalent to 6% of the travel and tourism sector. It can represent more than 15% of the sector in some destinations.
The latest data names the US as the largest contributor of retail tourism to GDP in 2019, with $34.7bn.
Despite the challenges posed by the pandemic, the US retained this leading position in 2020 with $17.5bn and continued to grow in 2021, contributing $23.9bn to the country’s economy through retail tourism.
GlobalData Travel and Tourism analyst Megan Cross confirms that “there are specific famous locations associated with retail in the US, such as Fifth Avenue in New York City, Rodeo Drive in Beverly Hills, and the Magnificent Mile in Chicago. These destinations attract millions of tourists every year who are looking to enjoy the American retail experience.”
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Governments that incentivise this retail segment with tax-free shopping have seen tourism revenues boom. The WTTC states that countries such as the UK that scrapped tax-free shopping have seen visitors move to countries such as France or Italy, depriving the economy of critical export revenues.
WTTC President and CEO Julia Simpson comments: “Our latest findings on the US reinforce its allure as a shopping mecca, highlighting the vital role that retail tourism plays in the country’s travel and tourism sector.”
GlobalData’s travel and tourism analysis finds that the key source markets in the US destination tourism market are Mexico, Canada, the UK, Germany, France, India, Brazil, Colombia, South Korea and Spain.
Despite the nation’s role in global retail tourism, forecasts for the US hotel industry find that while top-line performance is advancing, growing operating expenses are projected to limit profit growth over the remainder of 2023.