MILAN — The loss of tourists caused by the pandemic is dramatically impacting the Italian retail sector.
During a digital webinar organized on Thursday by Global Blue, the tax-free leader presented research conducted by Oxford Economics, a company providing global forecasts and analysis to prevent and manage risk. The study highlighted that in 2020, Milan welcomed almost half the number of international visitors compared to every year in the period of 2001 to 2019. When normally around 4.5 million people visit the European city every year, in 2020 there were only 2.5 million.
“We expect that they will return to pre-COVID-19 rates in 2023,” said Nicola Nobile, lead economist at Oxford Economics. “However, we believe that international tourists will slowly return to travel to Italy and to Milan in the third quarter of this year.”
The lack of international visitors is causing a drop in the business of Italian brick-and-mortar fashion and accessories stores, which closed 2020 down 30 percent.
According to Massimo Torti, secretary general of Federazione Moda Italia, the Italian association that represents wholesalers and retailers in the fashion, textile and leather goods industry, more dramatic losses were seen at stores focusing on specific products, including travel accessories. “Some of them lost almost 85 percent of their business,” he said.
If in 2019 the average spend by international tourists in Italy was 861 euros, in 2020 the average receipt of Italian consumers in luxury shops was 400 euros, which falls to 115 euros when it comes to large consumer goods.
According to Nobile, although the country will see a return of international visitors in the third quarter of 2021, Oxford Economics doesn’t expect their average purchase rate will return to pre-COVID-19 standards. “The biggest spenders in our country tend to come from the Far East and it will take a while for them to return to shop in Italy as they used to do before the pandemic,” he noted.
Nobile added that even if in general in Italy saving rates increased in 2020, since people faced strong restrictions limiting their lifestyles, the propensity to consume is not expected to spike in 2021. “We forecast that the richest families will definitely return to spend, but they will focus on the purchase of durable goods and high-value service,” he said.