Quant Easing: Weak £ Draws Tourists (from PRC)

♠ Posted by Emmanuel in at 6/02/2010 12:44:00 AM
While I'm not exactly a happy camper being paid in rather useless pounds, it seems tourists are flocking to London in droves given the exceptionally weak currency that makes for veritable bargains. I myself have make a note of this fact before. Nowhere is this situation more apparent than in the West End of London where there is a high concentration of retail outlets. (Yes, my school is in is area.) The West End was famously immortalized in song by the Pet Shop Boys' "West End Girls" after...I don't really know what. To no one's real surprise, retailers there cite an influx of Chinese power shoppers as those keeping them afloat. What's more, they are lobbying the government to ease visa restrictions so that our Chinese friends can buy more pieces of Britannia. A nation of shopkeepers, indeed. Given the moribund economic outlook for the UK, the West End is expecting a parade of highs leading to the 2012 Olympics. From the Evening Standard:
West End retailers are on course for record sales this year as millions of tourists flock to the capital to take advantage of the favourable exchange rate, it was revealed today. Sales in Oxford Street and Regent Street are expected to exceed £6 billion this year for the first time, with £12 billion forecast for the next two years. Retailers put the increase down to international shoppers attracted to London by the weak pound.

A survey by the New West End Company, which represents 600 retailers in Bond Street, Oxford Street and Regent Street, found nearly half predicted the 2012 Olympics would boost sales by 10 per cent. Chinese shoppers are the fastest growing international market for the West End, with a 35 per cent increase in spending predicted for 2012. A surge of Chinese visitors has already been responsible for boosting sales figures by £50 million in two years. As the pound has grown weaker, the amount spent has risen from an average £344 per Chinese tourist at the start of 2008 to £631 this year.

But retailers claim trade is being hampered by visa restrictions, with the documents being too expensive to purchase and taking too long to process. A UK visa for Chinese shoppers costs £64 and is valid for 30 days. But a visa for the Schengen group of European countries costs £60 and is valid for six months. Only 110,000 Chinese tourists visit Britain each year compared with two million going to the rest of Europe.

The New West End Company and VisitBritain have launched the Visa-ability Campaign, calling for restrictions on visas to be relaxed to capitalise on the Olympics. Nigel Dasler, vice president of tax-free shopping service Global Blu, said: "Our analysts forecast that the lifting of visa restrictions for Chinese shoppers - business executives purchasing large-scale items - could yield increased spend of £165 million over the first two years in the West End economy."