What: The post-pandemic surge in tourism has significantly benefited fashion and beauty retailers, though changes in traveller spending patterns have posed challenges for some brands.

Why It Is Important: The shift in how and where travellers spend their money impacts retail strategies and highlights the need for brands to adapt to new consumer behaviours to capitalize on the tourism boom effectively.

The ongoing post-pandemic travel boom has brought a substantial increase in tourism, benefiting fashion and beauty retailers. The US Department of Transportation reported record numbers of travellers, while Chinese tourists are nearing pre-Covid levels of international travel. However, shifts in spending patterns have emerged; Western tourists are focusing more on experiences, while Chinese tourists prefer shopping domestically or in Asian destinations rather than in Europe. Japan, with its weak yen, has become a significant beneficiary, seeing a doubling in fashion spending from tourists. Brands like LVMH and Estée Lauder face challenges adapting to these changes, while others capitalize on the trend through strategic initiatives such as resort pop-ups and airport boutiques. As summer progresses, it remains to be seen if increased travel will lead to a rebound in luxury spending or if budget constraints will limit fashion splurges.

Fashion’s travel retail bet pays off