THE MONEY TRAIL: Chinese tourists are abandoning Hong Kong in droves — at least when it comes to shopping — according to the latest Global Blue statistics, analyzed by Barclays in London. According to the bank, March’s Global Blue data showed a record increase in Chinese tourist spending, which rocketed 122.4 percent year-on-year, following a 51.9 percent bounce in February.
“This is an exceptional step-up…and continues to reflect the redirection of Chinese spending from Hong Kong towards Europe in particular, given the widening of the price differentials, which is a much-discussed theme during the ongoing reporting season,” the bank said in its report, adding that the March figures could have also benefitted from some refunds related to the later Chinese New Year.
Due to the March bonanza, Chinese tourist spending is up 67 percent year-on-year in the first quarter, compared with 32 percent in the fourth quarter, and 18 percent in 2014.
“In the context of weak Chinese GDP figures and ongoing disruption in Hong Kong and Macau, the strong European reading provides evidence as to why luxury brands may be reticent to narrow price differentials,” as foreign exchange rates continue to fluctuate.
As reported, companies including Chanel, Patek Philippe and Tag Heuer have re-adjusted their pricing to address global currency fluctuations and to minimize the risk of gray market sales. Other companies say they are waiting for currency disparities to settle down before they make a decision about pricing.
Overall global tourism spending increased 47.4 percent year-on-year in March, its highest levels since May 2011, despite the continued decline of Russian spending, which was down 39 percent year-on-year.
Watches and jewelry were the best performing divisions in the month, while leather goods increased 49.7 percent, and the fashion and clothing category increased 21.6 percent. Barclays said the latter category has been underperforming for seven consecutive months given its higher exposure to Russian spending.