Premier Vision September 2017 Contents Tax Free Trends Summary 03 Tax Free Shopping Sales Trends 05 Feature: Sales in Greece boosted by Tax Free Shopping threshold reduction 07 Tax Free Sales by Destination and Source 08 Top 5 Visitor Nations per Destination Country 10 Currency Trends 12 Arrivals Forecast Europe Overview 14 France 15 United Kingdom 16 Italy 17 Spain 18 Germany 19 Singapore 20 Premier Vision September 2017 Premier Tax Free | 02 Shopping & Arrivals Growth Summary – September 2017 +4% +2% +2% +10% Total Tax Free Total Vouchers Total Avg. Transaction Total Arrivals Sales Turnover / Transactions Values (ATV) Top 5 Destination Markets Top 5 Source Markets Tax Free Sales Vouchers/ Avg. Transaction Arrivals Tax Free Sales Vouchers/ Avg. Transaction Arrivals Turnover Transaction Values (ATV) Turnover Transaction Values (ATV) FRA +4% -2% +5% +14% CHN +13% +4% +8% +4% GBR -9% -8% -1% +9% USA +9% +3% +5% +14% ITA +20% +17% +2% +8% RUS +11% +20% -7% +17% ESP +19% +16% +2% +18% SAU +14% -2% +16% -4% DEU -8% -14% +6% +4% KWT -7% -12% +6% -19% Premier Vision September 2017 Premier Tax Free | 03 Shopping & Arrivals Growth Summary – Year to Date +15% +12% +3% +11% Total Tax Free Total Vouchers Total Avg. Transaction Total Arrivals Sales Turnover / Transactions Values (ATV) Top 5 Destination Markets Top 5 Source Markets Tax Free Sales Vouchers/ Avg. Transaction Arrivals Tax Free Sales Vouchers/ Avg. Transaction Arrivals Turnover Transaction Values (ATV) Turnover Transaction Values (ATV) FRA +13% +3% +10% +13% CHN +23% +19% +4% +13% GBR +16% +18% -2% +11% USA +20% +9% +10% +17% ITA +24% +22% +1% +9% RUS +12% +31% -14% +20% ESP +22% +14% +7% +18% HKG +32% +18% +12% +7% DEU +3% +0% +3% +6% TWN +36% +36% +0% +9% Premier Vision September 2017 Premier Tax Free | 04 Tax Free Shopping Sales Trends Overview Italy gains continue unabated, with UK sees continued arrival strong finish predicted for the year gains; but sales growth Trends in Tax Free Shopping saw a continuation of the broad trends seen in August, as the rate of gains tempered by headwinds Italy once again led the pack amongst the major slowed to 4% in the month, compared to the 5% gains destination markets, with growth of 20% in the month, seen in August. The 4% increase in sales in the month Despite a 9% increase in arrival numbers, sales in the UK and 24% on Year To Date basis, further consolidating its was supported by a 2% increase in transactions, with declined by 9% in September, driven by an 8% fall in the position as the destination of choice for 2017. continued momentum in sales gains in both Italy and volume of transactions, as a number of headwinds start Spain, offset by declines in both the UK and Germany, to affect sales in the UK. Firstly, the relationship between The top three nationalities in Italy, representing close whilst France saw modest gains of 4%. From a nationality arrivals and sales provided a contrasting picture in 2016, as to half of total sales in the month and represented by perspective, there was a 28% decline in sales to Qatari the number of arrivals declined by 2%, but the Brexit effect Chinese, American and Russian tourists, all saw growth tourists, commensurate with a 27% decline in arrival saw an increase in sales with growth of 21%, therefore of between 26- 28%, whilst Saudi & Kuwaiti tourists numbers, as the impact of the blockade continues to making growth compares inherently more difficult. provided gains of 47% and 25%, respectively. hamper tourism from this nation. Secondly, the importance of Qatari tourists to the UK In terms of destinations within Italy, both Milan and The outlook for October suggests a potential return to market and the embargo on this nation also influenced, Rome saw an increase of 16%, whilst sales in Florence double-digit gains, albeit at a lower pace seen through where in September 2016, these tourists were the increased by 33%. Although these three cities represent the first half of 2017. Early indications suggest Golden fourth most important nationality in the UK, and sales to close to 70% of all sales in Italy, the diversity and variety Week provided gains of nearly 10% in sales to Chinese these tourists saw the largest fall in absolute sales terms of destinations saw the rest of the country increase tourists, whilst sales to South Korean tourists saw close amongst all nationalities, relegating these tourists to sales by 33%, with sales in Capri, Forte dei Marmi and to triple-digit gains. However, indications also suggest sixth position in September 2017. Portofino, all seeing triple-digit gains in the month. that the recent political unrest in Spain, following the terror attack in Barcelona, could curtail the rate of Thirdly, the impact of terror attacks had been seen to be With the final quarter of 2017 predicted to see growth gains in tourism to Spain. fairly muted, however, with many tourists having already in arrival numbers of 10.2%, and with the top three booked summer vacations at this time, and with the most nationalities all predicted to see double-digit gains, recent attack on the 15th September, this could now we estimate that sales in Italy will increase by between be a deterrent for the High Net Worth travellers. These 25-27% for the full year of 2017. factors, along with a moderately strengthening Pound, are currently likely to affect the remainder of 2017. Premier Vision September 2017 Premier Tax Free | 05 Tax Free Shopping Sales Trends (continued) Currency fluctuations provide outlook suggests, the insatiable appetite to travel and 20%, respectively, although transactions to Russian remains, but it remains to be seen how this might affect tourists also increased by 20%. The 12% increase in the uncertain outlook, but tourism Average Transaction Values, or for that matter, the number of Brazilian tourists gave rise to a 27% increase outlook remains positive volume of transactions.. in sales to these tourists. At the start of 2017, a number of commentators had Resurgence of BRIC nations The 5% increase in numbers from China saw a broadly predicted that the Euro to USD rate of exchange would commensurate 4% increase in transactions to these reach parity in 2017, which was not a particularly bold endures despite uncertain tourists, whilst sales to these tourists increased claim given the low of 1.04 seen in December 2016. trading conditions by 13%. The outlook for arrival number from China continue to look positive for the remainder of 2017, and Since then, although the Dollar initially rallied and spiked The movement and fluctuations in the rate of exchange, the imminent start of the following the Trump election, the legislative failures, in impact of terror attacks, geo-political events inside and ‘2018 EU-China tourism particular in implementing the proposed tax reforms, has outside of Europe, ‘over-tourism’ concerns, and the year’, the prospects seen this euphoria replaced by a weakness in the value of anniversary of the Brexit referendum, have all served to continue to look the Dollar. This coupled with a strengthening Eurozone create uncertain trading conditions in recent months. economy, and an absence of potential political upheaval positive. following elections in the Netherlands and France, has Despite these challenges, sales to international shoppers seen the renewed confidence in the Euro, with an easing form the BRIC nations have continued to exhibit strong concern about the break-up of the Eurozone. gains, with growth of 13% in September 2017, an 22% on a Year To Date basis, with all four nations In more recent times, the elections in Germany and exhibiting double-digit gains. the political movement in Spain have served to apply some downward pressure on the Euro, whilst Sterling There was a 17% increase in arrival has recently strengthened since the Bank of England numbers from Russia and India in suggested increasing interest rates with economic data September, which resulted bordering on encouraging. in sales growth of 11% There has therefore been considerable fluctuation and uncertainty in recent times, however as the arrivals Premier Vision September 2017 Feature: Sales in Greece boosted by Tax Free Shopping threshold reduction Travel and Tourism to Greece continues to flourish, In 2017 to date, Tax Free shopping sales have increased Top Nationalities despite the difficulties facing the broader Greek by 27%, with Chinese tourist spend increasing by 54%, economy, with reports indicating that arrival numbers closely followed by the Americans at 37%, and many to Greece increased by more than 10% in the first more international shoppers increasing their tax free China 23% 28% 54% half of 2017. Travel and Tourism to Greece has always shopping spend as a result of this increased benefit to represented a significant proportion of the Greek the tourist. Russia 15% 12% 2% economy, with estimates from the World Travel and USA 8% 8% 37% Tourism Council (WTTC) suggesting that all direct The benefits have been felt across the majority of the and indirect contributions of tourism to the country country and where Athens represents 42% of all Tax Free represent as much as 19% of the nation’s GDP, the shopping sales, 2017 has seen a 52% increase in sales in Other 54% 51% 21% fourth highest proportion in the EU. Athens. The growth however, is not limited to the cities; the Island of Santorini, for example, has seen an a 147% In 2016, Premier Tax Free played a major role in increase in transactions compared to 2016. 2016 Mix 2017 Mix Y-Y enhancing the attractiveness of Tax Free shopping in Greece, and by increasing the propensity to claim As expected Average Transaction Values (ATVs) have refunds, consequently increased the proclivity to spend decreased over this period.