UK terrorist-linked tourist slowdown could hurt fashion and luxury sector

The tourism boost UK fashion and luxury retailers have enjoyed since the pound’s plunge  year ago could be at risk with recent terrorist attacks having dented tourist visits to Britain, especially from long-haul countries. Chinese and US visitors have been key for luxury stores in recent months.

Tourists are crucial for London luxury and fashion stores but will terrorist attacks mean a slowdown?

However, it looks like the decline could be a short-term one with demand picking up as the memory of attacks became less raw.

Terrorist attacks this spring and summer in London and Manchester meant inbound passenger numbers from Europe saw a “material weakening”  and growth in long-haul bookings slowed down noticeably, the British Hospitality Association said.

Before the March attack on Westminster Bridge that saw several tourist deaths, visitor bookings from long-haul country shad been ahead by 16.5% for July and August combined. But the terrorism-linked slowdown means they’re now up only 10% for July and August, although this figure is still a “healthy” year-on-year increase.

The BHA said it’s too early to work out whether the fear of terrorism will hurt later tourist arrivals but that July to October bookings are up 14% at present.

This could mean that luxury goods firms and fashion chains with large London flagships see less-than-expected growth for the summer but recover as the autumn starts.

However, despite the terrorism-driven issues, London stores saw some positive effects this summer as the Muslim Eid festival beginning in June rather than July helped to boost UK luxury store visits.

Interestingly too, while some reports had suggested that business travellers have visited the UK in smaller numbers since the Brexit vote last year, the BHA said that London has seen a “healthier percentage” of corporate guests compared to Paris and Brussels. While business travellers are less likely to spend as much in London’s luxury stores as dedicated shopping tourists do, they still account for a strong percentage of sales.

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