LONDON, United Kingdom — After Britain’s vote to leave the EU, the pound plummeted to its lowest level against the dollar in 31 years and more than $2 trillion was wiped off the global stock market.
However, one upside to the weak pound is that more tourists have been inspired to visit the UK. Data from tax-free shopping firm Global Blue showed that spending from tourists in 2016 jumped by 14 percent, up from 2 percent in 2015.
Tourist spend for the month of December alone rose by 23 percent year-on-year, driven in large part by Asian and American shoppers who have continued to seek out luxury bargains. Chinese shoppers, who account for the largest group of international tourists spending in the UK, spent 46 percent more in December than they did a year ago, with spending by Americans —the second largest group — rising by 77 percent in the same period.
In addition, visitors from countries like Taiwan, which is typically a smaller spending market, spent 177 percent more, whilst tourist spend from Hong Kong visitors grew by 115 percent.
Certainly, exceptional demand from tourists over the festive period helped Burberry post a better-than-expected rise in quarterly sales on Wednesday. The company reported that comparable sales in the UK, which make up about 10 percent of its business, rose by 40 percent in the three months to the end of December.
Historically Britain’s strong currency has been a barrier for many with a desire to visit. “The weakened pound has extended the opportunity to a wider group of travellers who have made the most of the favourable exchange rates allowing them to visit the UK,” says Gordon Clark, Global Blue’s managing director for the UK and Ireland.
“This exposure and accessibility has been invaluable and the Brexit vote was undoubtedly a key contributor to the industry’s 2016 growth, but whilst we welcome the immediate boost and exposure, we are yet to understand the decision’s long-term implications.”
With this in mind, Clark expects the upward trend of UK international tourist spend to continue growing in the coming year, which is expected to grow by 4 percent to 38.1 million according to the UK’s official tourist board VisitBritain.
“These figures align with our 2017 forecast of further growth for retail tourism; driven by the UK’s increased exposure in 2016 and the continued devaluation of the pound, until the implications of Brexit are made clear,” says Clark.