Tourists flocking to London after Brexit
Luxury goods receive well-needed boost as Chinese buyers take advantage of slump in pound
- Burberry and Harrods' profits set to improve as good and services become cheaper for foreigners
- UK's referendum decision to leave the EU has sent the pound plunging to historic lows
Britons have delivered a potential windfall to the tourism and luxury goods industries as the fall in value of the pound makes goods and services cheaper for foreigners, according to Bloomberg.
The outcome of Thursday's referendum on European Union membership sent sterling to historic lows as investors rush to sell the currency.
Consumers reacted almost instantly to the drop, with searches by Chinese for U.K. holidays “skyrocketing” on Ctrip.com International Ltd.’s travel booking app, the company said, while Chinese news site Phoenix implored visitors to London to “Buy, Buy, Buy.”
Consumers reacted almost instantly to the drop, with searches by Chinese for U.K. holidays “skyrocketing”
Luxury British companies such as Harrods and Burberry have received a much-needed boost in demand for their products, as the Chinese are the biggest buyers of high-end goods and make most of their purchases overseas.
“I wouldn’t be surprised to see Chinese and Middle Eastern tourists flocking to the U.K. as their purchasing value has increased,” said Edouard Meylan, chief executive officer of Swiss watchmaker H. Moser & Cie. “People are ready to travel to get a 5 to 10 to 20 percent discount.”
The benefits may well take time to come to fruition as holidaymakers book flights and accommodation well in advance however, as well as the real possibility of prices increasing which could affect business.
The benefits may well take time to come to fruition
Switching travel to the U.K. and Europe from Japan could save Chinese shoppers as much as 40 percent with the currencies’ shift against the yuan, according to Bloomberg Intelligence analyst Michelle Ma. She expects to see changes to the travel pattern of mainland Chinese “straightaway” as it is the middle of their summer holiday season.