What: 2023 should be the year of recovery for international retail, thanks to the reopening of China. However, this will come with shifts in the industry.

Why it is important: Tourists might have changed in nature (what they want) and in numbers (according to the destination). For this reason, department stores will have to carefully analyse the nature of the flows, in order to make the most of the touristic boon. The good news is that after 2 years of efforts on the structure and spending, this boon should come as a cherry on the cake and not a way to fill in a potential gap in sales.

Global travel has been heavily affected by the closure of global borders sparked by the 2020 Covid-19 pandemic. China was the last country to keep its borders closed and this restriction was lifted early 2023. Given its weight in global consumption, especially in the fashion and luxury segments thanks to its tourists, Visa expects that this reopening will set global travel on path of recovery in 2023.

According to the report, Asia Pacific monthly outbound travel could match 2019 as early as July 2023 (for comparison, 2022 reached 27% of 2019 levels). Interestingly, the pace of recovery is faster than in Europe and the US on a comparable basis in time.

Interestingly, the only cities to have fully recovered (or surpassed) their 2019 levels in 2022 were Paris (110%), which still ranked #1 mainly thanks to European and Northern American tourists, London (138%, #2), and Istanbul (103%, #3). But new destinations overperformed: look at Mecca (166%), Riyadh (167%), Medina (192%), Cancun (128%), Punta Cana (138%) or Los Cabos (132%). International operators should expect a change in terms of destinations, as Asia Pacific destinations are also expected to take the lion’s share in 2023.

Another interesting fact noted by Visa is the recovery in touristic spending was faster in restaurants than in pure retail. This is a sign that travelling individuals are increasingly looking for experiences rather than pure shopping.

China’s reopening sets global travel back on track in 2023