July is traditionally a busy period for American Globe Shoppers. Global Blue looks at how US spending power has remained high during the first half of 2017.
Europe remains first choice for US Globe Shoppers
Globally, Europe retains the majority of American Tax Free Shopping (TFS) sales, with 81% of total spend in 2017 and strong growth of +22% (calendar year-to-date). This growth was largely driven by a +17% increase in transactions, however average spend per transaction also increased by +5%.
This increase in visits can be attributed to the strong performance of the US dollar against both the Euro and British pound in the first half of the year, which created favourable conditions for American shoppers across the continent. However, recent softening of the US dollar against the Euro creates the possibility of an average spend reduction across the Eurozone, which could manifest itself in coming months.
Seasonality is key
Analysis of TFS spend show that the summer is a key period for American TFS spend in Europe, with June to October representing the busiest months of the year, more than 50% of their yearly spend.
During the summer months, American tourists tend to outspend other nationalities in major TFS destinations, despite making less transactions. For example, the last 12 months US Globe Shoppers in Italy averaged almost 2 transactions per trip, with a total average spend of EUR 1,800.
UK catches up with largest TFS markets
Italy and France remain the two largest European markets for US Globe Shoppers, with 22% and 21% of global spend respectively. Against the previous period in 2016 American spend in Italy between January and July grew by +8%, whereas spend in France increased by +23% over the same period. This difference in growth can be explained in part by the revival of France as a tourist destination after a difficult period for the country following 2016 terrorist attacks.
The UK was the third most popular destination with US Globe Shoppers between January and July 2017, with +16% of global TFS spend. However, growth in this market has outstripped that of Italy or France (+55% calendar year-to-date) largely due to the impact of Brexit on the British pound, which has made the UK one of Europe’s most affordable destinations for US shoppers. With the British pound expected to remain weak for the foreseeable future, it is likely move ahead of France and Italy as the European destination of choice for Americans Tax Free Shoppers.
The Bahamas drives Latin American growth
Another destination catching up with Italy and France is The Bahamas, which opened as a TFS destination back in August 2015, following the introduction of VAT by the Bahamian Government. As one of America’s closest TFS locations, The Bahamas have proven very popular with US Globe Shoppers, with cruise travellers in particular benefiting from the scheme.
Over the last 24 months the destination has grown steadily in popularity and now represents the fourth biggest TFS market for US travellers, with 12% of global spend. Bahamian performance has remained extremely strong in 2017, with calendar year-to-date sales from US Globe Shoppers up +61% against 2016 figures, outstripping even the UK in terms of growth.
This growth has had a hugely positive impact on the Latin American performance as a whole. While the region accounted for just 12% of global TFS spend, January to July growth across the region rocketed by +64% year-on-year.