25 June 2017 - Asian Tax Free Shopping (TFS) sales performance showed improvement in May, according to Global Blue. Growth was driven by an increase in traffic, with large numbers of Chinese tourists travelling to Japan over Labour Day and the Dragon Boat Festival.
Japan drives regional growth
Japan’s consistently strong 2017 sales performance continued in May (+43% year-on-year) thanks to seasonal travel patterns from China, a weakening Yen and cannibalised tourist traffic from South Korea.
While growth was largely driven by an increase in transactions during May (+28% year-on-year), average spend also rose (+12%) as Chinese consumers took advantage of the continued softening of the yen boosting spending power.
Japan also benefited from Chinese travellers avoiding South Korean travel, which has been a significant factor in the country’s strong performance over the last five months.
Increase in Chinese trips
Most growth across the region was driven by this significant increase in Chinese visits to Japan, as travellers booked trips across Labour Day and the Dragon Boat Festival holidays. May is historically a busy period for inter-Asian travel, with low cost, short break packages popular with Chinese tourists.
The affordability of these packages altered the profile of Chinese TFS customers during May, with an increase in visitors from ‘Tier 2’ Chinese cities reducing the average spend across most markets.
Across the region, sales from Chinese Globe Shoppers grew in May, posting a +18% increase calendar year-to-date.
Korea tensions continue
Chinese curbs on travel to South Korea continues to dramatically reduce traveller numbers, with year-on-year sales declining by -44% during May. Korea has historically been the destination of choice for Chinese holiday travellers during May. With political tension and travel volatility showing no signs of abating, Korean TFS performance will continue to be negatively impacted for the foreseeable future.
Key nationalities remain healthy
Aside from the significant growth driven by Chinese TFS customers, several other leading Globe Shopper nationalities posted strong Asian performance during May.