U.S. positioned as largest contributor of retail tourism to GDP
According to the World Travel & Tourism Council (WTTC), the U.S. remains the preferred choice for shopping holidaymakers, as revealed at Virtuoso Travel Week, taking place in Las Vegas, from 13 to 18 August.
“Retail tourism is a thriving market segment of the Travel & Tourism sector in the U.S.”, said WTTC President & CEO, Julia Simpson, during her participation at the event today.
The joint research collaboration between WTTC and the Hospitality and Tourism Research Centre of The Hong Kong Polytechnic University, in collaboration with The Bicester Collection, will be published on 7th September during an event taking place at La Roca Village, part of The Bicester Collection, in Barcelona, Spain.
According to the report, in 2019, retail tourism was worth US$178.2 billion, equivalent to 6% of the Travel & Tourism sector, and can represent more than 15% in some destinations.
Historically, retail tourism has been overlooked by researchers; resulting in limited data for travel providers to plan and invest strategically.
The latest report by WTTC seeks to correct that, providing valuable insights into people's shopping habits when traveling, such as out-of-town retail destinations; the latest trends in retail tourism, such as sustainable retail, and the immense potential it holds for destinations and businesses.
The latest data revealed by the international body names the U.S. as the largest contributor of retail tourism to GDP in 2019 (US$34.7 billion).
Despite the challenges posed by the COVID-19 pandemic, the U.S. retained its leading position in 2020 with US$17.5 billion and continued to grow in 2021, contributing US$23.9 billion to the country's economy through retail tourism.
Julia Simpson, WTTC President & CEO, said: "For millions around the world, shopping is one of life's great pleasures. The pandemic impacted both travel and retail industries severely, but as the world reopens, this report shows how the retail experience can become a journey too.
“Our latest findings on the U.S. reinforce its allure as a shopping mecca, highlighting the vital role that retail tourism plays in the country's Travel & Tourism sector.”
Governments that incentivise this retail segment with tax-free shopping have seen tourism revenues boom. Countries like the UK that scrapped tax-free shopping have seen visitors move to other countries like France or Italy, depriving the UK economy of critical export revenues.
In Paris, retailers have thrived since France set a three-day VAT rebate window for purchases exceeding €100 in 2019, with The Bicester Collection witnessing a dramatic spike in Paris visits, surpassing London as the UK phased out its VAT refund scheme.
The upcoming WTTC report seeks to provide a comprehensive overview of retail tourism, covering retail habits, emerging trends, and the challenges and opportunities that the sector faces.
By incorporating insights from sector experts, academics, and practitioners, the report offers a holistic perspective on this vital market segment.
This pioneering research will also include recommendations for both the public and private sectors, aiming to guide destinations in attracting new visitors, incentivizing retail tourism, and fostering sustainable growth in this sector.