LONDON – Tourists fell out of love with shopping in Europe – at least for the month of September – according to a report by UBS based on figures from Global Blue.
UBS said in a flash report Wednesday that overall tourist spend in September was down 5 percent, with Europe falling 10 percent. Tourist spending accounts for about 35 percent of all luxury goods sales.
All major European countries saw a deceleration in the months, with France and Italy both down 8 percent year-on-year. The bank said the U.K. fell 11 percent against tough comparisons with the previous year when the weak, post-referendum pound cut into prices of luxury goods.
In September, Asia saw sales growth spike further, rising 39 percent year-on-year. The bank said that Korea continued to suffer from political woes, falling 4 percent, while China and Japan were both up 80 percent, benefitting from the transfer of Chinese tourism spend.
Overall, purchases by the Chinese rose 2 percent year-on-year in the period. That figure compares with August, which was up 14 percent year-on-year, although UBS pointed out the figure did not count the contribution of Chinese tourists in Hong Kong.
“With feedback from our recent trip to Hong Kong encouraging and the price differential to France narrowing to about 10 percent, we believe this market is seeing accelerating Chinese demand currently,” the bank said.
UBS added that narrowing global price differentials have raised the probability of price increases going forward. “We see potential for price increases to support growth if and when volumes slow into 2018,” UBS said.
“We had always seen this as likely following the improved demand backdrop, but it has been made more probable post the recent strength of the euro.”